The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Bahamian Contractors Association's (BCA) president yesterday estimated that local contractors were losing $100 million annually due to the absence of lien laws that would enable them to claim outstanding payments.

"I would say that, conservatively speaking, it's fair to say that $100 million yearly is not collected by good faith contractors," Leonard Sands said. "That is because there is nothing in place to force clients, developers or vendors to negotiate settlement on outstanding balances, and so many times contractors simply can't get what is owed to them."

Mr Sands added that with 8,000 licensed contractors in the Bahamas, outstanding payments to the industry could easily hit half a billion dollars ($500 million) over a five-year period given his $100 million annual estimate, Desmond Bannister, minister of works, while addressing a BCA luncheon, confirmed the Government was working to develop a Contractors Lien Bill.

"Over the next fiscal period, my Ministry will continue work on the Construction Contractors Lien Bill, which will, among other things, protect professionals from the risk of not being paid for services rendered. Too often, particularly sub-contractors, are left with no avenue to claim against a property after supplying labour or materials for work on that property. This legislative proposal provides a remedy," said Mr Bannister.

Mr Sands told Tribune Business in response: "We see this legislation as a way to bring an end to what has been happening, and allow us to be able to close out our books, get our outstanding payments and ultimately be more profitable."

He added that the BCA has already been provided with a draft of the Bill, which it is assessing and will provide feedback on to ensure it moves through Parliament.

Stephen Wrinkle, a former BCA president, previously told Tribune Business that a Contractors Lien Bill will 'level the playing field' and ensure all parties to a construction contract enjoy equal protection.

He added that the legislation would 'complete the circle' by safeguarding contractors, sub-contractors and building materials suppliers against non-payment.

While the recently-passed, but not enacted, Construction Contractors Bill is intended to protect consumers from 'cowboy contractors' and shoddy workmanship, the Lien Bill will do the reverse.

"If a customer fails to pay a bill that's due and payable, for the contractor there's currently no protection," Mr Wrinkle told Tribune Business. "If the Lien Bill was in effect, then the contractor would have the right to place a lien on the customer's assets or the project at hand to collect the money due to them. No everyone has the protection they're supposed to have in hand."

Mr Wrinkle said problems had often occurred when banks and other Bahamian lending institutions released financing for new-builds to their client, the mortgage borrower, who then failed to fully compensate the contractor.

"It's just as liable to happen as the contractor not finishing the job," he told Tribune Business. "There's no protection on either side of the fence. It's an equal problem.

"Many, many times the contractor gets to 90 per cent completion, and the homeowner gets the occupancy certificate and does not pay the contractor the balance.

"The industry is fraught with crevices, holes and ambiguities. Both the customer and the contractor currently have no reasonable protection other than the courts and judicial system, which is absolutely horrible and a long, arduous process," Mr Wrinkle continued.

"This will clean that up, level the playing field, and ensure all interested parties have an equal footing.

"The Lien Act needs to be passed. We have discussed and pushed for this for many years. It will mean additional security, paperwork and protocols, but it is nothing that the construction industry is not using around the world. It needs to be addressed right now while all this is on the table."