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Builders' past raises questions

Project: Anne Arundel Medical Center says when it picked Madison Homes to redevelop its site, it was largely unaware of the key players' track record.

January 25, 2001|By Amanda J. Crawford and Andrea F. Siegel | By Amanda J. Crawford and Andrea F. Siegel,SUN STAFF

Jane Hynok, who still lives at Bentley Place, remembers the day 10 years ago when she put her black Labrador in the shower. When the dog got in, one wall of the shower collapsed, she says. She still battles a leak over the sliding glass doors in the living room, a common complaint.

Architect Robert Davidson of Davidson & Associates Construction Analysts, did a survey of Bentley Place in 1993 for residents. He says that problems there were more extensive than at any other project he has seen in 21 years of business.

"The [original] work was done by unqualified people who did not know or perhaps did not care about the workmanship of their trades," he says. "They were going against building codes left and right. The project also seemed to lack proper supervision."

FOR THE RECORD - The spelling of C. William Struever has been corrected for the archive database. See microfilm for original story.

Rosenberger says lawsuits against developers are common.

"During any project there are going to be concerns or complaints -- that's the nature of homebuilding," he says.

The Milton Co. could not reach an acceptable settlement with the Bentley Place condominium association, he said. Instead, the case went to trial.

In 1994, a Montgomery County Circuit Court jury awarded Bentley Place owners $6.7 million. It found Schneiderman personally responsible for about $1.1 million for promises in sales brochures and the company accountable for the rest.

Upheld on appeal in 1999, the verdict empowered condominium associations statewide, bolstering their right to bring claims based on warranties and defects in individual units. For the first time, a jury awarded condominium owners compensation under the state's Consumer Protection Act, allowing an award for attorneys' fees and litigation costs as well as for damages.

"It is one of the landmark cases against a developer," says Barry L. Steelman of Baltimore, the homeowners' lawyer. "I consider the Bentley Place case to be a major step in protecting not only homeowner rights but consumer rights in Maryland."

In Bentley's wake, land-use lawyers changed the way they advised their clients. Among other things, they recommended being more responsive to customer complaints, says Roger D. Winston, a partner in Linowes & Blocher, the law firm that weighed in on the case on behalf of an industry association.

Bentley Place owners got nearly $4 million of the judgment, including about $1.3 million from subcontractors pursued by the Milton Co.

To date, they have spent about $3 million for repairs, still incomplete after a decade.

`The man with no title'

Schneiderman blames a souring economy for many of his company's problems. Amid a recession, banks called in loans and refused to extend more. Many properties were worth less than the loans financing them. As a high-volume builder -- often without partners -- the Milton Co. was hit hard, he says.

"It really ran out of money," he explains, noting that every segment of the industry was squeezed. He also blames a lack of supervision and the workmanship of subcontractors, whom the Milton Co. sued in the condominium cases.

Once the Washington area's eighth-largest homebuilder, the Milton Co. was effectively out of business by mid-1992. But Schneiderman and Rosenberger were not.

The two had already founded Madison Homes and Madison Residential Development Co. They salvaged a few Milton projects, mostly with what Schneiderman says was his wife's money.

But the Virginia State Board of Contractors didn't buy the separation of Milton and Madison, and refused to license the new company with Schneiderman at its helm. "They wanted to ensure that it was not just the Milton Co. in another form," Rosenberger says.

Schneiderman vanished from Madison's executive roster in 1993, becoming, in his words, "the man with no title." Rosenberger became the sole director, allowing Madison to win its Virginia license. But Schneiderman remains a key player, supervising projects, designing new ones, and meeting with local officials and lenders. In the Annapolis development, for example, he says he is project director.

Schneiderman's wife, Karen, a lawyer, owns 50 percent of Madison. His son, Doug, is vice president. Rosenberger owns 10 percent, and his wife, Ellen, owns 40 percent.

Among the projects that straddled Milton and Madison was the 48-unit Cedar Lakes complex in Fairfax County, Va. As Rosenberger and Schneiderman battled lawsuits against the Milton Co. in Maryland, across the Potomac they marketed Cedar Lakes under the Madison Homes name.

But the water problems followed them, and soon the new condos sprouted mold.

Mold within the walls

Shirley O'Dell called it the "Great Sleeping Sickness."

Shortly after moving into a new two-bedroom Cedar Lakes unit in January 1993, she and her husband, Robert, complained of exhaustion, nausea, numbness, breathing problems, skin rashes, vision problems, memory loss and flu-like ailments, according to news reports at the time.

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