The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The proposed Contractors Lien Bill will “level the playing field” and ensure all parties to a construction contract enjoy equal protection, Tribune Business was told yesterday.

Stephen Wrinkle, the former Bahamian Contractors Association’s (BCA) president, told Tribune Business that such 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 - discussed by the Minister of Works earlier this week - will do the reverse.

Desmond Bannister said: “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.”

Mr Wrinkle said the proposed protection was badly needed, given that the non-payment of contractors and sub-contractors happened as frequently as contractors failing to finish the job.

“It is an essential component of the legislation for the industry,” the ex-BCA president told Tribune Business. “The Construction Contractors Act makes substantial provisions for clients, customers and homeowners, but on its own it does not provide adequate protection for the contractor or sub-contractor or supplies.

“Lien laws are standard in the construction industry around the world. No job takes place in the US without it. Every time a payment is made by the customer to the contractor, the contractor must provide a release of lien, certifying that payment has been made to sub-contractors.

“The burden is on the contractor to provide this information to the client and the lending institution so they have comfort the funds are going where they are supposed to.”

Sub-contractor complaints about not being paid, or being compensated either late or partially, frequently surface in the Bahamian construction sector.

Apart from providing protection against the main contractor’s failure to pay his hired subs, Mr Wrinkle said the Lien Bill would also give contractors immediate recourse against clients who default.

“If a customer fails to pay a bill that’s due and payable, for the contractor there’s currently no protection,” he 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.”

The legislation closer to being enacted, the Construction Contractors Act, promises to yield significant benefits for the industry, consumers and the wider Bahamian economy if it functions as intended.

For the Act, when implemented, will introduce a system of licensing and self-regulation, where Bahamian contractors are certified according to their qualifications and scale/scope of work they are capable of undertaking.

This would place them on a ‘level playing field’ with foreign contractors, enabling them to better compete for multi-million dollar contracts on foreign direct investment (FDI) projects that come to the Bahamas because their capabilities are certified.

The Act also includes provisions giving Bahamian consumers means of redress, and protection, against shoddy workmanship by so-called ‘cowboy contractors’ - something that has been a frequent complaint among residents.

The construction industry is the last professional trade in the Bahamas to be regulated by statute law, and efforts to finally achieve this are now into their fourth administration. The Act is similar to those regulating the engineering and architect professions, in that it will self-regulate contractors via a Board comprised of members from both the private and public sectors.