Summer’s just around the corner, the time of year when homeowners start thinking about the benefits of a swimming pool. Recent industry data has shown that pool construction has grown steadily in the past few years, with over 16,000 pool contractors operating in the country.
“Every year this far, our business has doubled, and I think industry-wide, we’ve seen numbers that have never been seen before,” said Michael Armstrong, owner of A&J Pools in Pennsylvania.
But those pool contractors may want homeowners to temper their expectations: “…when you come in here, it’s going to be mid-summer next year before you are swimming. That could be a hard pill to swallow,” said Phil Woody of American Pools and Spas in Florida.
Just like every other corner of the construction industry, pool construction is taking a hit from major supply chain problems. With pools, this sometimes means that only certain small elements of the construction are hard to find — but when it comes to building a pool, those small elements can also be the most crucial.
“Tile that is sitting in barges off the coast — so, tile that you should be able to have — it’s shipped, it’s here, but not here. It becomes an issue,” Woody noted.
These supply chain problems aren’t just holding back current work, but they’re keeping contractors from accepting work, too.
“You know, in our case, we had to scale back our pool installations,” Armstrong noted. “You know, I could sell 100 pools, but I can’t necessarily do that in a year, so we kind of scaled back to keep the customers happy.”
Complications like these put even more pressure on contractors when it comes to payment and profitability, especially when 48% of contractors reported seeing supply chain issues as a threat to growth and success.
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Construction lien rights on pools are variable
Generally, payment protection works the same for pool contractors as it does for other contractors, as in-ground pools are permanent improvements that can be the subject of a mechanics lien. However, at the same time, payment and payment protection for pool contractors can be tricky, and some states have complicated contract and payment requirements for these companies.
For example, in Arizona, pool contractors are required to be paid in four separate payments consisting of a down payment and three additional progress payments — leaving plenty of opportunities for a dispute to arise before final payment has been made.
The state’s requirements show how damaging failing to properly follow contract rules can be for these types of contractors, as well: Failure to follow the contract requirements of ARS §32-1158.01 can result in the suspension or revocation of a company’s contractor license.
Given the fact that pool contractors sometimes operate in the divide between permanent and impermanent improvements to a property, it can complicate their mechanics lien claims as well.
“Generally, mechanics lien rights are available to those who provide labor or materials that permanently improve real property. Work that doesn’t provide a substantial, lasting improvement to property —such as regular maintenance — will typically not give rise to lien rights,” notes construction attorney Matt Viator. “When a claimant files a mechanics lien that doesn’t have a valid basis, such a lien could typically be challenged and removed from the property.”
All of these complications can really add up for a pool contractor — a small margin of error can mean bankruptcy, which the industry has seen more and more in recent months.
In December 2021 a Connecticut pool contractor filed for bankruptcy, causing a bit of controversy with several customers who were reportedly left with unfinished pools on their properties. Additionally, at the end of April 2022, two Florida pool contractors filed for Chapter 7 bankruptcy over less than $50,000 in liabilities — one with only $18,665 — while Texas pool contractor Fluid Commercial Pools followed with a Chapter 7 filing in May.
“It’s important to understand, to be compassionate with retailers, the builders. A lot of the time, their hands are tied,” noted customer Robert Arago.
“Given the realities facing the industry, customers don’t have much of a choice — if you want a pool in 2022, it’s likely going to be bogged down in the supply chain morass. There’s not much to think about. That is reality,” added potential customer Timothy Beveridge.
“Everybody’s doing the best they can, but there are so many things that are back-ordered…we’re trying to do what we can or at least get you by with what we have,” Armstrong said.