When Phoenix-based Riviera Pools declared bankruptcy in fall 2008, president and CEO Ron Ostlund vowed to complete the 50 or so projects his company had not yet finished.
It didn’t happen.
Left to pick up the pieces were an assortment of angry
homeowners, unpaid subcontractors, and an industry already reeling
from a toxic mix of hard-to-secure credit coupled with a
devastating slowdown in new construction.
“It’s important for the industry to help these
[homeowners],” says Mike Geremia, president/CEO of Geremia Pools in
Sacramento, Calif., a Pool & Spa News Top Builder.
“And I worry right now because a lot of builders are just
hanging on by their fingertips.”
Some industry insiders wonder if the current economy could
incite a rash of abandoned pools, irate homeowners and more black
eyes for the industry.
But experts aren’t yet ready to label abandoned pools a
problem, since so few projects are being started in the first
place. Still, in this economy certainties are fleeting, and
abandonment issues could arise at any time. That is why it’s
important for builders taking over these sites to know how to
handle such projects — from common trouble spots to limiting
their legal liability.
In California, the Contractors State License Board has received an
increase in complaints from subcontractors claiming they
weren’t paid for their work, according to agency spokeswoman
However, the CSLB reports no significant spike in the number of
abandoned pool projects over the last six months.
“Honestly, I would have expected to see more abandoned
pools at this point,” says Cecil Fraser, CEO of Swan Pools in Lake
Forest, Calif., a Pool & Spa News Top Builder.
“I just don’t think we’ve gotten there
In Florida, where new building has slowed to a near standstill,
the problem is virtually nonexistent.
By late April, the Florida Department of Business and Professional
Regulation had yet to receive a single complaint of abandonment
by a licensed pool contractor since the fiscal year began the
“There’s nothing there to abandon,” says one
Florida builder. “I don’t think there’s anyone
out here with 40 holes in the ground anymore. It’s just not
possible, unless it’s from a year and a half ago.”
The state of affairs in Arizona, by contrast, is less clear.
More than half-a-dozen Phoenix-area builders went out of business
in and around 2005, when more than 23,700 pool permits were issued,
according to Ryder Permit Service in Carefree, Ariz. Traditionally,
Phoenix is a revolving door in good times and bad.
“We had sort of an industry cleansing before [the current
recession] hit,” says Mark Ragel, president of Patio Pools &
Spas in Tucson, Ariz., a Pool & Spa News Top Builder.
Ragel, whose firm has been called upon to finish some 20-25
projects since then, says a number of builders are surviving on the
backs of their subcontractors, many of whom are owed tens of
thousands of dollars.
Problem is, with each new job, the builder is able to knock off
a percentage of his debt to the sub.
“So the subs don’t really have a choice,” he
says. “They have to keep taking the jobs. And they’re
enabling the hemorrhaging to continue.
“I’m just wondering who is on the edge right
now,” he adds, “because I see what’s going on out
Picking up where another builder left off can be tricky, which is
why it’s a good idea to know what to look for before stepping
onto an abandoned site.
In fall 2007, at the behest of the CSLB, Bruce Dunn inspected
each and every job site vacated by Hallmark Pools, a large
California building firm that had gone belly-up. Some were just a
few stages short of completion, while others needed almost total
So Dunn, CEO of Mission Pools, a Pool & Spa News Top
Builder based in Escondido, Calif., developed a list documenting
each project and describing what exactly would be required to
complete the job.
This type of I-dotting and T-crossing is crucial, experts
First, many builders make the mistake of using a standard pool
contract for a takeover job, says attorney Guy Bluff, managing
Bluff & Associates in Phoenix. This assumes the
nature of all work that’s been completed is known.
“You’ve got to make clear who bears what
risk,” he explains. “Basically, you want to absolve
yourself of responsibility for any unknown conditions.”
On takeover jobs at California Pools and Spas, officials first
advise the homeowner to seek a release from the prior
builder’s contract. This assumes, of course, that the builder
is still in business, or at least can be located.
In fact, the firm will not start work without an assurance from
the customer that there is no prior obligation to the previous
builder, says Gary Minor, vice president of business development at
the West Covina, Calif.-based Pool & Spa News Top
“At minimum, that letter keeps us clear of
liability,” he says. “But without the letter, as a
builder you can take over and you’re not indemnified in the
contract. It’s insurance more than anything else.”
In more extreme cases it can be difficult to tell whether even a
single phase was completed properly. What to do, then, if the
homeowner requests a warranty?
“We tell the homeowner that the only way we can guarantee
the work is to start from scratch,” Minor says.
“Depending on the size of the pool, this could add anywhere
from $5,000 to $20,000 to the overall bill. It’s not
something they usually go for.”
In any case, documentation is key. Before work can begin,
builders are advised to photograph or otherwise record the
condition of the site. Take pictures of the shell, the plumbing,
the electrical grid, and any other construction areas related to
For its part, California Pools and Spas offers free consultation
to homeowners whose projects have been abandoned, Minor says. And
the first move usually entails an attempt to settle with the
After all, “it’s the industry that takes a hit anytime
guys leave a project unfinished,” he says.
Expert advice for taking on an abandoned pool.
See how Phoenix-based Shasta Pools and Spas helped out an Arizona family left with a hole in the ground.