Thinking of buying a newly constructed home? Be
prepared to do some research
October 3, 2004 - For Tammy and Ben Cowart, buying a new home seemed like a dream come
true. The couple spent almost every weekend for six months in 1987 at
a Moreno Valley building site, watching plans take shape and snapping
photographs for a scrapbook.
Everything seemed fine until they noticed a large crack in the slab
foundation. The home was just settling in, the builder explained.
The Cowarts pushed for a better answer. They called the developer and
sent certified letters and photographs to document their concerns but
received no response. Without an adequate explanation for an obvious
flaw, the couple withdrew from the deal, and the developer returned
their $15,000 deposit.
Today, Tammy Cowart, a real estate agent with First Team Real Estate
in Long Beach, is glad she asked tough questions. "Several years
later," she said, "we learned that the very site we [would have]
purchased was perched on a fault line that was never disclosed to us
as buyers."
From leaky roofs to sinking subdivisions, construction defects happen.
And builders are working to reduce them with construction reviews and
stricter standards. But consumer advocates contend that the rush to
cash in on the housing boom is contributing to mistakes.
Some evidence suggests the concern is justified. Maine-based Criterium
Engineers, an investigative engineering firm that inspects more than
25,000 buildings annually, found 15% of the new residential
construction it surveyed nationwide last year had at least two
significant defects. Among the problems were improper window and door
installation, inadequate roof installation and framing and foundation
issues. In the Southwest United States, the incidence was slightly
higher at 17%.
The most frequent sources of problems? A lack of skilled workers and
poor workmanship, followed by substandard material selection and
ineffective design, according to Criterium President H. Alan Mooney.
For buyers looking to claim one of the 200,000 new homes California
builders expect to complete this year, however, the news is better.
Amid a backdrop of rising defect litigation and soaring insurance
costs, major builders and their insurers are requiring third-party
construction reviews throughout the building process. These new
standards are being coupled with stricter regulations for
energy-efficient, earthquake-safe residences.
"Every product contains some defect, and new homes are no different.
But unlike a manufactured product assembled in a factory under close
tolerances, new homes are still constructed by hand," said Stan Luhr,
chief executive and founder of Poway-based Quality Built, which
conducts in-depth structural reviews for major insurance carriers,
developers and home buyers. "But homes built in California have more
amenities, are more complex and of a greater quality than homes we see
in other parts of the country."
Tougher quality standards have bumped production home-building costs
to between $110 and $130 per square foot, up 28% since last year and
75% more than a decade ago, said Stephen P. Doyle, treasurer of the
California Building Industry Assn. and president of Brookfield San
Diego Builders Inc. in Del Mar.
On top of the extra expense, construction time has increased, he said.
New homes, which accounted for about 19% of the estimated 741,000
single-family homes sold in California in 2003, take about six to
seven months to complete, or about one month longer than a decade ago.
Despite the changes, consumer advocates remain unconvinced that there
are fewer problems in new homes. During the last 30 years, Thomas E.
Miller of Miller Law Firm in Newport Beach has recovered more than
$450 million on behalf of homeowners who filed construction-defect
claims.
Miller said he has seen no reduction in defect cases or in the volume
of daily calls and e-mails from homeowners who need a solution to a
defect problem.
About 20% of the 2,500 home-defect complaints received annually by
Homeowners Against Deficient Dwellings come from California. The state
trails Texas, Missouri and Florida, according to Sandy Skipper- Lopez,
the consumer protection group's national director.
Unlike the inquisitive Cowarts, Eric and Kelli Meyer didn't ask a lot
of questions during the construction and purchase of their three-
bedroom Saugus home in 2001. Like many buyers, they just assumed the
house came with standard features. But shortly after moving into their
home, the Meyers discovered that, with the exception of the bathroom
and kitchen, the house had no lighting fixtures.
"When we did the walk-through, it was daytime," Eric Meyer said, "so
we didn't even think to ask if they were going to put in the rest of
the lights."
The couple purchased and installed their own lighting fixtures, but
inadequate insulation proved more problematic. "My neighbor would talk
to his wife in the backyard, and it was as if they were standing next
to my bed," said Eric Meyer, who worked nights at the time and slept
during the day. The Meyers sold the home in March 2003.
"There was nothing we could do about the insulation problem," Kelli
Meyer said. "The house was already built."
While the building industry and consumer advocates have yet to find
common ground on some issues, they stand united on one point: Buyers
eager to enter the new production home marketplace should do their
homework.
Contact the California Contractors State License Board, the Better
Business Bureau, the local building inspector, homeowner advocacy
groups, the county district attorney's office and the state attorney
general's office to see if any complaints have been filed against a
builder. Inquire about past defect litigation claims and liability
insurance coverage.
However, problems in the past don't always indicate a rocky future.
When Les Weinberg bought his West Hills home in 1997, he hired an
independent inspector. The inspector found some minor defects. But
Weinberg said the developer addressed and corrected each one without
delay. No major problems have surfaced since then.
"We knew in advance that [the developer] had experienced some problems
in the past," Weinberg said, "but it was almost as if they had learned
from that and gone through their own process of using the experience
to develop a good product."
Beyond an inspection, buyers who visit the building site on a regular
basis, talk to the builder and the work crew about the project, make
notes and take photographs usually end up with a better-built home.
In researching the builder and weighing the decision to purchase a new
home, find out what's included in the purchase price. Other
considerations should be quality and service. For instance, how long
is the average customer service response time? How has the developer
handled problems in the past?
When spending several hundred thousand dollars on a new home, there
really are no dumb questions, Mooney said.
"Building a house is a complicated process that involves a lot of
people. And there are going to be problems from time to time. Good
builders have very aggressive policies for their own people about how
they deal with problems," Mooney said. "If a builder responds by
saying they don't have any problems, I would move on to another
builder."
Wiser now, the Meyers bought a new home in Saugus in June 2003 from
Greystone Homes, a division of the Lennar Corp.
This time, the couple researched the developer through the Web and
visited owners who had purchased homes from Greystone several years
earlier.
And the couple took nothing for granted. "One of the first questions
Eric asked was whether the house came with lights," Kelli Meyer said.
Common trouble spots
A national inspection firm found these defects in new residential
construction, ranked from most frequent to least, and their common
warning signs:
* Window/door installation: loose windows, missing flashing, openings not square
* Roof installation: lack of roof paper, improperly placed shingles,
premature roof deterioration
* Site selection/soil preparation: poor drainage, slab cracking
* Framing: lack of bracing, inadequate frame connections, visible
stopgap repairs, structural sagging, roofline distortion, unusually
springy floors
* Heating, ventilating and air-conditioning mechanical equipment
installation: poorly installed ductwork and wiring, inadequate
performance
* Siding installation: thin stucco, improper siding attachment, rot and mold
* Foundation construction: significant cracking, premature deterioration
* Window performance: rot and mold, leaks, broken seals
* Use of unproven materials: short service life
* Improper use of power tools: nailing missed the framing, too few or
too many nails
Source: Criterium Engineers' Construction Quality Survey, 2003.
**
Researching a home builder
How does a builder rate? To find out, go to J.D. Power & Associates'
2003 national home builder ratings at www.jdpower.com/
cc/homes/index.jsp.
For consumer information, home builder ratings and builder complaint forums:
* Homeowners Against Deficient Dwellings, www .hadd.com
* Homeowners for Better Building, www.hobb.org
For information about builders:
* The Better Business Bureau, bbb.org/search.html
* The California Department of Consumer Affairs, (800) 952-5210, www.dca.ca.gov
* County of Los Angeles Department of Consumer Affairs, (800) 593-
8222 or (213) 974-1452
* Quick link to individual building departments in Los Angeles County,
www.icbolabc.org/quicklink.htm
To view citations against a licensed builder or contactor, check
license status, report unlicensed activity or lodge a complaint:
* California Contractors State License Board, (800) 321-2752, www.cslb.ca.gov
To locate a home inspector:
* The American Society of Home Inspectors, (800) 743-2744, www.ashi.org
* The California Real Estate Inspection Assn., (800) 848-7342,
www.creia.org. Select CREIA Inspector Finder
For information on time limits for defect claims and related legislation:
* The Miller Law Firm, (800) 403-3332, www.constructiondefects.com
Additional resources:
* For a free new-home checklist, visit the National Assn. of Builders'
website, www.nahb.org. Enter "pre-settlement walk through check list"
in the site's search area.
* "Home and Condo Defects: A Consumer Guide to Faulty Construction" by
Thomas E. Miller and Rachel M. Miller (Seven Locks Press, 2001)
* "Your New House: The Alert Consumer's Guide to Buying and Building a
New Home" by Alan and Denise Fields (Windsor Peak Press, 2002)
© Copyright 2008 The Miller Law Firm. All rights Reserved.
If you experience problems or have questions, contact us at Info@ConstructionDefects.com.
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