April 15, 1999 - Shadow
Ridge, a condominium and townhouse complex in Oak Park, reached
terms last week on a construction defect lawsuit that will pay
homeowners $8.4 million.
The
case went against Orange County homebuilder, Regis Homes, and its
financing partner, Aetna Life Insurance, for problems that Shadow
Ridge spokespersons said were due to "architectural deficiencies
and code violations."
The
440-unit complex has been plagued by leaky roofs, windows, sliding
doors and breezeways, sometimes leading to dry rot and other
complications, according to the complaint.
Shadow
Ridge attorney Thomas Miller called the agreement the largest per
unit settlement in Ventura County history.
"There
are a number of buildings inside this project and not any one of
them was immune from these problems.
They all had various signs of water intrusion," Miller
said.
The
problems stemmed from inadequate supervision on the job, use of
unskilled labor and construction plans not being made clear,
according to Miller. The
homes were built in 1992.
Regis
attorney Richard Glucksman said the project's subcontractors would
bear the "vast majority" of the settlement costs, but he added,
"There is no admission of any liability and no admission of any
wrongdoing or defects out there.
The settlement really is driven by the excessive cost to
litigate the case.
"Regis
takes their building very seriously," Glucksman said.
Shadow
Ridge initially sought $5 million, according to Miller, but raised
the ante considerably after investigators found further problems.
The $8.4 million figure was reached during negotiations
before Los Angeles County mediator Ross Hart.
Payment is expected to be in the hands of the homeowners
association within 30 to 60 days.
Shadow
Ridge Board President Gerald Kline called the settlement
"adequate" enough to finish the repairs that were left undone
while the litigation was underway.
The full work won't be finished for at least a year,
according to Kline.
"In
life safety instances we did do the repairs, but in most cases we left
the situation in place because we didn't want to compromise the
evidence," Kline said, explaining that "life safety" refers to
the rain water that would pool in common areas and create dangerous
footing for residents and visitors.
"When
it rained I'd go out and sweep it off with the broom," said Bill
Peterson, a Shadow Ridge owner for the past six years.
"We have a nice crack in the wall, too."
Other
problems include faulty water heaters and electrical outlets, Peterson
said. None of the tenants
were ever forced to move out of their units, however.
Peterson
said that with the settlement resolved, he and his wife can think
about selling their two-bedroom townhouse.
He said mortgage lenders will be more inclined to ask for a
smaller down payment now that the lawsuit is over.
"Any
time you have a pending litigation it is a cloud on title and it
affects people's ability to finance or refinance," said Kline.
Regis also faces litigation over alleged construction
defects at the 80-unit Shadow Oaks complex on Kanan Road, less than a
mile away from Shadow ridge, and at a project in Dana Point, according
to Miller
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