Do You Think New Pool Construction Today Is Scary and Fraught with Risk?

[setsailsoon]

@setsailsoon - when you built your home, did you use surety/performance bonds? What about the pool?

Sorry for the delay Matt. Been slammed with a number of time-consuming diversions. Great question though. I did indeed look into a performance bond. I found it to be a waste of money for the construction contracts I was entering into. Most of the ones I found were basically guaranteeing the work was performed in a manner that ensured compliance with the building code. I was doing that through my own management of the job and the county did a lot of this as well through their inspection process. Construction contractors that also do public works construction over a certain limit ($100,000 I believe) are required to provide a bond. Very few construction contractors I dealt with for the house and currently for the pool have ever been bonded. Not saying they can't get it just that they are not usually required to do so. Typically performance bond limits are set at about half the contract value. Then I looked into the claims process. Wow! If there's a real serious issue I could spend years filing a claim with the convoluted process I could find. Maybe this is different in other states but I found doing my own due diligence on contractors and negotiating terms that were fair was my best protection. Very few of my subcontractors started with fair contracts to the owner but it was very easy to make them fair. My shell contract was the largest one for the house. Their scope included slab, block, roof framing and sheathing. My excavation, electrical, plumbing, roofing, and hvac subs all had to interface with them. So it just seemed to me that I could spend a LOT of $ on bonds for each of them and nobody would take consequential damages which meant I'd probably be left with a complicated claim to prosecute that would very likely yield nothing but an added insurance cost. So my best protection was to perform due diligence on financials of the contractors as well as verify their capability to perform, and verify they were doing so at critical steps. I required each one to show me work in progress to be able to submit a bid. I can tell a good contractor because I've been in this business for 40 years. Anybody can do the same thing by hiring an experienced constructor to do this for them. Retirees are a great source for this. Also, my construction commercial terms were built to ensure I never got much ahead of work in place. For some reason a lot of owners expect they will have to give builders a boatload of cash at signing with no control of how it's spent. Neither are true for quality contractors and they certainly shouldn't apply to builders.

I'm very much aware of the horror stories in Florida around pool builders over last couple years. When a market gets like it is for pools in Florida especially post covid margins go so high you attract a lot of scum. They prey on the people that don't have a clue how to hire a pool builder. Most of these cases started with an owner paying the "pool builder" $50,000 or more before the job even started or after the contractor "mobilized". Then then never saw him again. You can find a lot of threads even on this site where owners had absurd contracts they should never have signed that end up with almost as bad results. When potential pool owners come here to get advice I often suggest they look at their contracts and commercial aspects and Allen sends them to the Wiki notes we have on this. Sadly, many (most) don't pay much attention to this part. You hit the nail on the head "caveat emptor". Problem is very few know how to deal with this. And most also don't seem to want to.

Sorry for the rambling response but my simple answer to your question is that a performance bond just wasn't worth the cost for me and I concluded I was way better off with paying the cost of best practices for project management from start to finish.

I hope this helps.

Chris

 

[JoyfulNoise]

Sorry for the delay Matt. Been slammed with a number of time-consuming diversions. Great question though. I did indeed look into a performance bond. I found it to be a waste of money for the construction contracts I was entering into. Most of the ones I found were basically guaranteeing the work was performed in a manner that ensured compliance with the building code. I was doing that through my own management of the job and the county did a lot of this as well through their inspection process. Construction contractors that also do public works construction over a certain limit ($100,000 I believe) are required to provide a bond. Very few construction contractors I dealt with for the house and currently for the pool have ever been bonded. Not saying they can't get it just that they are not usually required to do so. Typically performance bond limits are set at about half the contract value. Then I looked into the claims process. Wow! If there's a real serious issue I could spend years filing a claim with the convoluted process I could find. Maybe this is different in other states but I found doing my own due diligence on contractors and negotiating terms that were fair was my best protection. Very few of my subcontractors started with fair contracts to the owner but it was very easy to make them fair. My shell contract was the largest one for the house. Their scope included slab, block, roof framing and sheathing. My excavation, electrical, plumbing, roofing, and hvac subs all had to interface with them. So it just seemed to me that I could spend a LOT of $ on bonds for each of them and nobody would take consequential damages which meant I'd probably be left with a complicated claim to prosecute that would very likely yield nothing but an added insurance cost. So my best protection was to perform due diligence on financials of the contractors as well as verify their capability to perform, and verify they were doing so at critical steps. I required each one to show me work in progress to be able to submit a bid. I can tell a good contractor because I've been in this business for 40 years. Anybody can do the same thing by hiring an experienced constructor to do this for them. Retirees are a great source for this. Also, my construction commercial terms were built to ensure I never got much ahead of work in place. For some reason a lot of owners expect they will have to give builders a boatload of cash at signing with no control of how it's spent. Neither are true for quality contractors and they certainly shouldn't apply to builders.

I'm very much aware of the horror stories in Florida around pool builders over last couple years. When a market gets like it is for pools in Florida especially post covid margins go so high you attract a lot of scum. They prey on the people that don't have a clue how to hire a pool builder. Most of these cases started with an owner paying the "pool builder" $50,000 or more before the job even started or after the contractor "mobilized". Then then never saw him again. You can find a lot of threads even on this site where owners had absurd contracts they should never have signed that end up with almost as bad results. When potential pool owners come here to get advice I often suggest they look at their contracts and commercial aspects and Allen sends them to the Wiki notes we have on this. Sadly, many (most) don't pay much attention to this part. You hit the nail on the head "caveat emptor". Problem is very few know how to deal with this. And most also don't seem to want to.

Sorry for the rambling response but my simple answer to your question is that a performance bond just wasn't worth the cost for me and I concluded I was way better off with paying the cost of best practices for project management from start to finish.

I hope this helps.

Chris

Fabulous perspective, Chris. Thank you for posting that.

 

[JamesW]

They prey on the people that don't have a clue how to hire a pool builder.

Which is exactly why you should have a bond, especially if you don't have the skill, experience or ability to pick a good contractor.

The bond company can help assess the quality of a contractor for those who can't.

They can probably also review the contract to make sure that it is complete because they are liable for damages in the event of a failure.

 

[JamesW]

I can tell a good contractor because I've been in this business for 40 years.

So, maybe a bond would be less important for you, but most people do not have this skill or experience.

 

[setsailsoon]

I have a final thought about this subject. In my former life I dealt with a lot of very large projects that had a large focus on risk management. Years ago we required performance bonds for the contractors but as the projects got larger and we all got smarter about what was enforceable the cost of bonds rose dramatically. Essentially both parties were paying a lot of the "worst case" risk costs. This forced owners and contractors to transition to use of a irrecoverable letter of credit. They did this because bonds that actually were enforceable became very expensive and the LOC was rarely used because we had a very well-defined scope of work plus technical requirements. They were confident they could perform so they would rather "put up $" at risk knowing there was little risk they'd ever use much of it. This was way lower cost than the bond that was almost never used.

In the OB Pool and House builder world I don't think bonds have progressed to the point they can really cover large risks. I found quite a few in the $5000 range but they didn't seem to cover beyond minimal errors by the contractor. Be very careful to make sure your bond really provides the protection you need, never assume anything about the bond. Bond coverage may be further developed in some states than others. If you can't find a reasonably priced performance bond that really is enforceable then you really have to either "go at risk" (which I would never recommend) or use a hybrid approach with an experienced consultant. A semi-retired, qualified and experienced consultant can add 5-10% of your cost but will be much cheaper than learning all the lessons yourself.

I hope this is helpful

Chris

 

[Falcons Fan]

I am wrapping up a project, and the construction process is brutal. The quality of work has been decent - not a 10 out of 10, but probably an 8/10. However, the reliability of people showing up when told was non-existent, and the reliability of getting the quality expected the first time was like 50/50.

The contracts are vague on details - get a copy of your plans, keep all price quotes handy, and YOU have to make sure they are building it to spec. If I relied upon the construction supervisor for that, several things would have to be re-done after they were complete. He was never there when a sub arrived to tell them things that aren’t on the plans - the “how” it needs to be done, given other considerations, not just what is on the plans. As it was, concrete had to be modified and sawed, rock had to be pulled off walls after applied, functional items didn’t get installed per plans and are on a punch list, gutter drain pipes to be buried didn’t get buried, etc. On top of all of that, materials dropped off on pallets were in my front yard outside the specified area for weeks, killing the grass; cars/trucks parked on my neighbors grass, and my driveway is caked with bobcat track mud a week after they left. Nothing gets cleaned up ever, until the very end. This includes the trash and boxes associated with the equipment. Shotcrete hoses were emptied in the yard, despite being asked not to - which means chunks of concrete hardened where I need to lay sod and plant. They rinsed the pumper truck off in the front yard, where chunks of hardened concrete were left in the grass. They ruined our garden hoses and sprayers, etc.

We like the finished product, but the process is just plain brutal. People in the industry can make all kinds of excuses for everything I mentioned, but it doesn’t have to be that way. No pride in the industry when they have more projects than they can handle. To give you some contrast here, our landscaper cleans the entire job every day, takes all trash off site daily, washes the driveway, puts materials in designated areas, etc. In other words, they do it right. If the pool company had charged $5,000 more to do the same, I would have paid it. They set expectations low on the front end, as far as the process is concerned. Even with low expectations, it was worse than we imagined. I had no idea I would have to repair the yard outside of designated areas, re-seed my neighbor’s grass by the street, need to have the driveway pressure washed, and move left over hardscape materials out of the yard on my own - all stuff worth considering to put in a contract. I hope the enjoyment of using the pool takes over at some point, and we leave the memories of the process behind us.

 

[kbuhagiar]

I am wrapping up a project, and the construction process is brutal. The quality of work has been decent - not a 10 out of 10, but probably an 8/10. However, the reliability of people showing up when told was non-existent, and the reliability of getting the quality expected the first time was like 50/50.

The contracts are vague on details - get a copy of your plans, keep all price quotes handy, and YOU have to make sure they are building it to spec. If I relied upon the construction supervisor for that, several things would have to be re-done after they were complete. He was never there when a sub arrived to tell them things that aren’t on the plans - the “how” it needs to be done, given other considerations, not just what is on the plans. As it was, concrete had to be modified and sawed, rock had to be pulled off walls after applied, functional items didn’t get installed per plans and are on a punch list, gutter drain pipes to be buried didn’t get buried, etc. On top of all of that, materials dropped off on pallets were in my front yard outside the specified area for weeks, killing the grass; cars/trucks parked on my neighbors grass, and my driveway is caked with bobcat track mud a week after they left. Nothing gets cleaned up ever, until the very end. This includes the trash and boxes associated with the equipment. Shotcrete hoses were emptied in the yard, despite being asked not to - which means chunks of concrete hardened where I need to lay sod and plant. They rinsed the pumper truck off in the front yard, where chunks of hardened concrete were left in the grass. They ruined our garden hoses and sprayers, etc.

We like the finished product, but the process is just plain brutal. People in the industry can make all kinds of excuses for everything I mentioned, but it doesn’t have to be that way. No pride in the industry when they have more projects than they can handle. To give you some contrast here, our landscaper cleans the entire job every day, takes all trash off site daily, washes the driveway, puts materials in designated areas, etc. In other words, they do it right. If the pool company had charged $5,000 more to do the same, I would have paid it. They set expectations low on the front end, as far as the process is concerned. Even with low expectations, it was worse than we imagined. I had no idea I would have to repair the yard outside of designated areas, re-seed my neighbor’s grass by the street, need to have the driveway pressure washed, and move left over hardscape materials out of the yard on my own - all stuff worth considering to put in a contract. I hope the enjoyment of using the pool takes over at some point, and we leave the memories of the process behind us.

Hate to say it, but this has been my experience on EVERY project involving any home or property construction.
Because of my career on the outskirts of the construction industry (low voltage wiring installation) I was fortunate to have enough knowledge to prevent these sorts of problems, but every - EVERY - project was a struggle. I feel for those folks who have zero knowledge or background, and have to rely on the contractors' word. I can't imagine how badly some of them get screwed.

 

[Mdragger88]

Hate to say it, but this has been my experience on EVERY project involving any home or property construction.
Because of my career on the outskirts of the construction industry (low voltage wiring installation) I was fortunate to have enough knowledge to prevent these sorts of problems, but every - EVERY - project was a struggle. I feel for those folks who have zero knowledge or background, and have to rely on the contractors' word. I can't imagine how badly some of them get screwed.

I feel this way about paying anyone to do anything- house, car, pool or whatever. I have been burned too many times. It’s going to be hard on me when I’m too old to do all the things myself or my husband is, I really have trust issues.
Even if I had the money I don’t think I’d ever have a plaster pool built as there’s just so much craftsmanship involved not to mention that it takes so long even if you don’t have delays. I’d probably stick to a liner pool & know that if they ran off or messed up I could fix it or complete it myself.

 

[JoyfulNoise]

I feel this way about paying anyone to do anything- house, car, pool or whatever. I have been burned too many times. It’s going to be hard on me when I’m too old to do all the things myself or my husband is, I really have trust issues.
Even if I had the money I don’t think I’d ever have a plaster pool built as there’s just so much craftsmanship involved not to mention that it takes so long even if you don’t have delays. I’d probably stick to a liner pool & know that if they ran off or messed up I could fix it or complete it myself.

10+ years ago when my plaster pool was built, we were just starting to come out of the Great Recession and the pool building industry around these parts was in the toilet. New pool starts we’re at an all-time low. All (most of) the scammers were all gone because no one was building pools. Only outfits that had their financial houses in order and with good reputations were able to weather the storm (and a lot of those guy took on service work to stay afloat). It was a buyers market and the good guys were all hungry for a job. Back in those days, contracts were written with start dates and duration estimates and most plaster pools could be built in 60 days or less.

My pool was built in 65 days. He was decent guy that did good work and all his subs were clean, courteous, and showed up on time when they were supposed to. Did everything go perfectly … nope … especially when the excavator tore up a buried electrical line and shorted out half the breakers in my electrical panel. But communication was excellent and the builder called me almost daily to make sure we were both on the same page in terms of what was coming down the line.

It’s possible to have a good build, but you absolutely have to work hard on the front end to vet everyone and communication is key to working relationship.