Homeowners, builders must work together

RESOLVING DISPUTES

September 06, 1992|By Adrian B. Miller | Adrian B. Miller,Contributing Writer

Sam Catalana is hopping mad. He paid cash for his $82,000 condo just two years ago, hoping to spend his retirement there. Instead, he is spending more money and effort than he bargained for in a legal battle with the condo builder.

Mr. Catalana and other homeowners at The Pointe in Abingdon say the 2- and 4-year-old homes in their development were poorly constructed by the builder, Henderson-Webb and The Pointe Inc.

The owners say water pours through some of their windows during rainstorms, floors and bearing walls vibrate, and roof trusses are unstable and could collapse under a heavy snow.

Henderson-Webb, which did not return repeated calls from a reporter, began making repairs on some of the 19 buildings in the Harford County development soon after problems were reported in 1990. And the owners could have ensured other repairs by filing claims on the warranties that came with their homes.

But angry at what they said was shoddy construction throughout the development and Band-Aid fixes that didn't solve the real problems, several homeowners and the condo association chose sue the builder. Their problems are now left to the courts to untangle.

Across the country, people like Mr. Catalana have reported structural problems with their new homes. John Weidlein, executive director of the National Homeowners Association in Chantilly, Va., says complaints seem to center on homes built during the late 1970s and '80s.

"There was such a tremendous amount of homebuilding going on then, and such a tremendous demand, they couldn't build them fast enough," Mr. Weidlein said.

According to the Baltimore Metropolitan Council, the number of residential building permits in the Baltimore area almost doubled from 1982 to 1983, and went up practically every year after that until they fell dramatically in 1990.

With some homebuilders, Mr. Weidlein said, getting the homes built quickly took priority over quality craftsmanship. "A lot of flaws surfaced, demand was so hot. The worst was from start-up companies. There were an awful lot of crummy homes built.

"I don't think that's prevalent now," he added.

Unfortunately for buyers who inadvertently purchase a "crummy" home, there is no such thing as a lemon law for real estate. And if they know nothing about the buying process, homebuyers may set themselves up for financial disaster.

"Most people do not check things out prior to purchasing," said Elizabeth Beggs, executive director of the Maryland Real Estate Commission. "It is usually after the fact, and then it's a little bit late. Most consumers do not understand their rights, they do not have general knowledge in purchasing a new vs. an older home, or in dealing with a broker or Realtor." Her Baltimore office invites and responds to any questions from the public about real estate.

Homeowners can take action to prevent problems before they occur or get out of control and into a courtroom. They should investigate a builder's track record and reputation, experts say, calling the attorney general's office, the real estate commission, the Better Business Bureau and other homeowners in the area.

Mr. Weidlein also advises prospective buyers to investigate the house itself, whether it is a single-family residence or a condo in a multistory development.

"If I were buying a home built in the late '70s and '80s, I would pay somebody $300 to $500 to have an engineering and structural evaluation performed. I'd split that cost with the seller," he said.

"For a condo, I would also look at the condo documents and find out the financial condition of the condo association. I would make sure they had plenty of reserves and get some sort of disclaimer as to the condition of the building." He said periodic repairs, such as the need to fix a pool, the need for new air-conditioning units or a new roof, can send monthly condo association fees into orbit.

"I think people go into condos and see a beautiful high-rise and pretty grounds, but they don't realize there are major maintenance-oriented improvements that have to be made," he said.

Would-be buyers should also insist on a detailed home warranty. Bob Ward, a homebuilder in Harford County, said most builders now issue warranties on new homes. "You have to disclose to the buyer that warranties are available, and whether you have a third-party warranty or you as the builder offer one."

Builders may offer third-party warranties from either Home Warranty Corp. in Arlington, Va., or Quality Builders Warranty Corp. in Camp Hill, Pa. Some builders develop their own warranty.

If a home has a defect under the warranty, the builder is bound to fix it. But some homeowners mistakenly believe that every glitch, down to a burned-out light bulb, is covered by the document. And, says Mr. Weidlein, some builder-issued warranties may not cover much at all.

"The important thing is to make sure the people issuing the warranty are trustworthy," he said. "And you've got to read the fine print."

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