Cracked Houses: What the Boom Built
Hundreds of thousands of people from California to Georgia say their almost-new homes need costly repairs because of construction defects

Robert and Kay Lynn lay in bed shortly after closing on their new home in the Blue Oaks subdivision in Rancho Murieta, Calif., abutting an 18-hole golf course. They were listening to the “pop, pop, pop” of what they thought were acorns falling onto the roof.

The Lynns soon realized those were not acorns dropping on the roof.

“Little did we know it was the house cracking,” says Mrs. Lynn, 67 years old. Mr. Lynn, 68, says they bought the property in 2002 for $357,000 as a weekend home and an investment. The stucco house was moving and shifting, with part of it subtly pitching toward the golf course, resulting in cracks and fissures in the walls, ceiling and floors, the couple says. [see WSJ for more]

 By M.P. MCQUEEN (MP.McQueen@wsj.com), Wall Street Journal, 07/01/2009
Source: http://online.wsj.com/article/SB10001424052970203872404574258531574049434.html

[H-O-T: We responded to say construction defects are symptoms of a much bigger problem that includes the erosion of regulatory oversight of many industries, including banking. The American public is fed up with corruption and corporate greed and is demanding change, so we’re optimistic about the opportunity to bring meaningful reforms of the homebuilding industry.

Builders who own their own finance companies and offer mortgage, title and insurance services have a profit incentive to cut corners, use substandard materials and labor, inflate appraisals, make subprime loans to unqualified borrowers, offload risks to others, and hide behind laws passed in their favor. Warranties that they provide for “free” force buyers into arbitration. And their practice of selling mortgage-backed securities, in our opinion, sparked the global economic collapse. WSJ has previously reported on the evils of vertical integration and interlocking directorates among corporate boards of directors. These ills apply equally to homebuilding, and we’re looking for an inquisitive partner to help with the investigative journalism to expose bad practices.]

READER COMMENTS

Christopher Kuhn wrote:

It’s a shame that these builders created such garbage; people used to take pride in their craftsmanship.

Craig Bradley replied:

The same problem of code violations in residential construction was evident during the oil shale energy boom in Rifle, Colorado from 1979-1982, and throughout the region, as well. The recent oil and gas boom from 2002-2008 probably caused the same situation in the Rocky Mtn. West.

When you have a "boom town" atmosphere, city building departments are simply not able to do all the code inspections on new construction, as they should. There is never enough staff or $$ for government to do its job adequately. Same thing with investment fraud at the Federal level ( Bernard Madoff, SEC). In the end, you have to protect yourself.

No government-paid bureaucrat is going to look out for the individual consumer or retail investor.

Shawna Gretzinger wrote:

My boyfriend does remodeling, construction, etc, in the KC area for individual homeowners (not builders). Much of his work during this recession is repairing damage to nearly new homes, mostly due to cutting corners. Many of the repairs he's done lately could have been completely avoided with basic caulking and other simple steps. A 2 year old house should not have wood rot around all the windows!

I'm wondering if a standard paid home inspection (not appraisal) would catch most of these issues during the initial purchase. And if so, why wouldn't they be required by banks as part of the appraisal, financing process?

Chris Hutter replied:

Like many others in the great housing bubble (realtors, investors, appraisers, etc) many inspectors were busy cashing checks and moving along to the next appointment and only taking note of the most obvious faults - in new construction I would only imagine this was not only a bit more difficult to detect (paint hides a lot) but also easier to assume things were fine without thorough inspection.

B JK wrote:

Caveat emptor

Craig Bradley replied:

Chinese Drywall (Another Consumer Protection Failure)

Contaminated Chinese Drywall (540 Million Pounds) was imported into the United States during the housing boom from 2004-2008. It has been estimated that this is enough drywall to construct about 100,000 new homes. This drywall (synthetic gypsum) was contaminated with sulfur and emits a smelly vapor (rotten egg smell) into the surrounding house. It is highly corrosive to copper tubing found in home air conditioner units and may pose a health risk to occupants, as well. Problems have initially been encountered in South Florida where warm humid air mixes with the sulfur gas released, forming an acidic sulfur compound in the air.

Affected Chinese drywall reportedly looks like ordinary domestic drywall, but has the smell and initials KNAUF printed on the back of the drywall.

gordon arnold wrote:

The quality of new construction appears to have taken a real hit in the last building cycle. Far too many homebuilders have knowingly used substandard materials, misrepresented the quality of workmanship and material, and tolerated slipshod workmanship in order to make a buck. How do I know this--I have had several homeowners of new or nearly new homes contacting me asking for a referral to trial lawyers who might take their case! Leaky roofs and windows, cracked foundations and settling, bogus drywall from god knows where, mold issues, they're all out there.

Chad Greenway replied:

Quality of construction has declined so much. My house (in Texas) was built in 1935 and is solid as a rock. Sure there are some headaches that come with older homes, mainly insulation of walls and non-insulated windows, but those are relatively easy fixes.

Daniel Heinzen replied:

Ditto. My 1921 house in Austin, Texas has zero problems. Carpenters who've looked at it tell me it is far superior to most of the new construction around here.

Michael Eachus wrote:

In Texas, builders have made large political contributions and slanted the legal playing field in their favor. I'm looking at you, Perry Homes. http://blogs.chron.com/texaspolitics/archives/2008/05/houston_homebui.html

Henry Grimmelsman wrote:

I think when the dust settles, the homes built in the decade ending in 2008 will have a reputation as the worst houses ever built. The houses built during the energy crisis and malaise of the 1970s weren't the best, as features were shrunk and materials skimped on. Some of those just seem like the Big Bad Wolf could blow them down. But they were built with competent labor, so at least all the corners are square.

What's left unsaid in this article is that most of the houses of the past ten years were built with immigrant labor, largely of the illegal variety. This is not to say the illegals don't work hard, but when all the plans are in English, and the foreman is an English speaker, work instructions don't get through to laborers who speak nothing but Spanish. Also, these laborers aren't going to stand up to bosses who cut corners. What can they do but shrug their shoulders? I'll never buy anything from this era. My house was built in the 50s and sits there as solid as an old brick you-know-what-house.

michael chapko replied:

Hard working illegals do not equal well trained skilled trades people. I am always amazed at how many of us are willing to automatically assign the virtue of "hard working" to unskilled illegals, when in reality they spend most of the time doing/re-doing work over and over because they lack the essential skills and knowledge. I prefer to pay someone to do a project once, confident it has been done properly than pay a lesser amount repeatedly until eventually that person gets halfway up the learning curve and I am left with at best a half-way acceptable result.

Gary Zehrbach replied:

There are many who profess the same standard as you Michael, but to be honest I see very few willing to pay a nickel more for it and this is where the damage is done. If we continue to see the trades as second class jobs, and I believe that is how we view most of them, and we put no importance or respect (which indirectly equals dollars) on "skilled" labor, we will continue to see the type of work you get using the "low bid" mentality.

Craig Bradley replied:

You get what you pay for. Most labor today is Mexican, some of it illegal.

James Marshall replied:

You're right Henry. My house was built in 1976: when the housing industry was going through a crisis. It didn't help that it took 3 builders to complete my development: the first 2 having gone bankrupt. I think the best homes were built prior to 1941.

Dan Herkes replied:

Look for a house that is at least ten years old. If it hasn't settled, cracked, or burned down it is probably OK. After you buy it: do your own work. Lay your own floors, install the wiring, and repair the windows and doors yourself. Do your own painting and decorating. You'll never be sorry.

JERRY MORIARTY replied:

Wrong, I build houses now and they're top quality. You just have to pay for quality like anything else. Why do people think a house would be any different?

michael chapko wrote:

Home builders in California decades ago decided to maximize their profits by replacing skilled trades people with illegal aliens willing to work for $10-$12 per hour. This is in large part was responsible for the focus on "curb appeal" by builders and realtors, since that is all homes in California have to offer.

They are substandard structurally and typically deficient in every mechanical system. Basic building standards such as squaring the corners of granite counter tops, proper laying of stone tile, aligning walls, and proper installation of outlets with GFIs is outside of the realm of the labor force employed by 90% of home builders in California.

And yet the willingly ignorant in California continue to buy these stucco coated jokes, swept up in the aura of curb appeal.

SAM WACHT wrote:

When I lived in Atlanta, it was painfully obvious who was building the houses and the quality of their work. You could drive down Buford Hwy in the morning and see the work crews standing on the corner waiting to be picked up for the day. No skill tests, no prior work history, if they looked healthy and had a few tools, they were hired, for the day. When a house was built by one of these crews across the street from me, about 1 out of every three windows would have one corner where the drywall/sheetrock would not line up, it blew me away. The same builder built about 15 houses around the neighborhood, 75% sat empty for a few years, the builder declared bankruptcy, the houses were auctioned off, most turned into rental property, I know at least one, probably two ended up turning into drug houses.

The entire neighborhood went downhill very quickly, I was lucky to get out at the right time, left the city and the state and have been very happy in my new location. The builder started a new construction business and went back to building within a year of declaring bankruptcy.

Chris Georgandellis wrote:

Another argument against real estate and for the equity markets. When I hear a "pop, pop, popping" sound in my stocks, I fire up the computer and I hit "sell". Case closed. No litigation, no sleepless nights.

Marcio Cardoso replied:

Ha! Good one. I agree. Nothing beats being able to cash in or out of an investment at will.

Jeffrey Batchelor replied:

You still have to fill out a disclosure form if you are aware of any problems with a house. You can't just sell it. You could be held liable if it is shown you knew something and didn't disclose it.

Henry Grimmelsman replied:

Yes, but to come back on a person due to lack of disclosure requires you to prove that the former owner knew about it. Unless you can dig up documents, this is basically impossible and also not worth the trouble except for the very worst problems.

I bought my house from an estate and all the disclosure sections were Xed out. That didn't bother me, as those sections were near worthless in my opinion.

Tim Hu replied:

A disclosure form means almost nothing. Sure, the seller has to give you one, but if something is wrong with the house, good luck trying to get it corrected. You'll have to spend time and money to get satisfaction. Frustrating! People sell houses with known, undisclosed defects all the time.

The 'just hit sell' idea. is MUCH better. There are no defects I have to disclose when I sell stocks.

JOHN SMITH wrote:

Even in a stable real estate market, a "new" house in a housing development is the only bit of real estate that can actually decline in value, especially when the same builder is building ever more housing developments just down the street. Why would someone buy your 5-10 year old house when they can buy a brand new one for practically the same amount? Combine this fact with the current real estate downturn (which has also hit newer, larger homes harder) and anyone who bought a McMansion in the past couple years is getting screwed...

Frank Jones replied:

People who bought more house than they need (McMansions) at the top of the market made a very poor investment decision - they screwed themselves. As people are forced to become frugal and with utility and taxes bound to go up, I would say that the long term outlook for McMansions as an investment is poor.

GEOFF JOHNSON wrote:

Unless you are building an expensive custom home where you can inspect and specify materials, most of the houses built in the last 15 years or so are complete junk. They are literally half-made of glue. Most of the "wood" used to build the house is either particle board or an MDF composite, primarily composed of glue. Even studs today are made of smaller pieces of wood glued together instead of one long 8 ft piece at a cost savings of less than $1.00 per stud. There is no way that most of the houses built since the 1990's will be standing in 50 years.

D Lawrence replied:

That's a pretty scary thought. I wonder what the longer term economic implications of that would be, given that housing is still struggling to find a bottom.

Timothy Gruver replied:

Understood Geoff, but your argument is misplaced. Particleboard and MDF are not structural materials...OSB and plywood are. It is not the 'glue' or the use of wood composite materials that make a home shoddy, it’s the improper construction. To the defense of everything you blame, the newer wood composite materials (OSB and finger-jointed studs) are actually much stronger than their counterparts (Plywood and studs, respectively). These materials also conserve forest resources by utilizing higher percentages of the logs they consume. The recent boom also fueled great innovations in residential construction...and this, in turn, unfortunately fueled the mentality that lesser skilled craftsmen could take the place of knowledgeable and experienced craftsmen.

Don't get me wrong, I agree that the recent construction boom built some of the worst homes ever to be constructed. BUT that's because they were CONSTUCTED improperly, not necessarily because of lesser quality materials...or glue.

Andrew Cosentino wrote:

I appreciate my old house even more after reading this.

Tim Hu replied:

So do I! My house is made from cinder block (with an awesome red brick veneer) on the perimeter walls and the inside is 100% lath and plaster. I can punch the walls and not do any damage.

Wayne Caswell (HOT) wrote:

The recent success of Homeowners of Texas, as the underdog that helped take down the Texas Residential Construction Commission, has earned the respect of many who didn't think this 1-year old non-profit had a chance against the powerful builders' lobby. With increased support from homeowners and other stakeholders, HOT is excited about the potential for even more meaningful reforms that further improve homebuilding, the market for new homes, and economic development in Texas, all while protecting consumers from shoddy construction and business practices.

Roger Brown wrote:

The article doesn't state if the houses were built to code. CA communities have rigorous building codes.

Little to do with ideas of craftsmanship or unskilled workers. Were the houses built to code and inspected? Here's a link to the community article: http://www.ranchomurieta.com/node/10798

michael chapko replied:

Since much of the California home building has occurred in massive tracts, it is impossible for inspectors to check the code compliance of each and every home under construction. Typically, statistical sampling occurs, with the inspector usually being directed to specific homes. I live in a Title 24 code compliant home I would not take if it was given to me for free because of the glaring deficiencies throughout it.

Russ Clark replied:

Quality code inspectors and appraisers have declined over most of the country. Some Colorado cities have terrible code inspectors and appraisers are often closely aligned with Realtor agencies. Until the crash, it was nearly impossible to get a fair assessment for a home. I would recommend using a residential structure engineer or experienced construction foreman for an independent inspection.

George Stoya wrote:

I'm surprised that McQueen failed to reference some of the leading movers in construction defect litigation, attorneys like Thomas E. Miller of Newport Beach, CA. Miller wrote the book on consumer protection in this field.

Thomas Leckrone wrote:

I guess all those thousands of dollars in permit fees and city/county inspections really was worth nothing - another great job by the government.

Frank Seldin wrote:

We recently bought a roughly 20 year old house in NY state. At the same time we were house shopping, we were talking to everyone we know (particularly home contractors and craftsmen) to identify the best inspector we could find. We had the inspector there within a couple of days after our preliminary agreement with the seller.

The inspector produced about a 50 page report segregating the issues, along with pictures and supporting code references where appropriate. He also was very clear about what he could not inspect and why.

Based on that report, we specified in the contract what the seller must fix prior to closing. We also used it to require the seller to fund an escrow account in case there were issues with the things he said he couldn't inspect (which it turns out we've had to get money from).

I'm no lawyer or real estate genius, but it seems only common sense to know that $500 - 1000 for an inspection is the best money you'll ever spend; and that you should never use an inspector referred to you by a real estate agent.

Darin Hurst wrote:

The house is in an active seismic area. All the damage shown is consistent with earthquake activity. Are these people from out of the area? While I would never argue that the homes out here are well built, and the damage should be repaired, I am not sure that 'faulty construction' is necessarily the only issue. Most likely, the pad formed where the house was built was insufficiently compacted, but given the large number of microquakes and other seismic activity, it probably isn't simply that the builder did a poor job with the house.

James Phlegar replied:

The article noted that a number of houses in the subdivision had similar problems and that the cause was a phenomenon known as "shrink/swell" or clay soils that alternately dry (shrink) and absorb moisture (swell). There are specific engineering techniques that must be used in building foundations in these environments. Both the developer and the local governmental jurisdiction are at fault in this instance. The local government apparently did not require a soil engineering report prior to approving the development plan.

Frank Jones wrote:

We can just imagine what a major earthquake will do to this shoddy construction in California. The greed and irresponsibility at so many levels is staggering.

Scott Roberts wrote:

Now that the Texas Residential Construction Commission is being dismantled the only solution that a home buyer has is the expensive legal system and now the construct standards go back to the old "Good and Workman Like Manner" which makes every trial attorney very happy. Yes, there is a small portion of builders who knowingly build garbage and they should be gotten rid of. The TRCC was not aggressive enough in that area. What the TRCC tried to do was give the builder and buyer an opportunity to talk, provide independent inspections and opinions and if defects were not addressed provide the owner with a very strong position in the courtroom. It also tried to balance expectations and reality.

Now without the TRCC:

--There is NO registration of builders.

--There are NO warranty and construction standards. See the standards we are losing at http://www.texasrcc.org/Forms_Library/Warranties_Performance_Standards_Manual.pdf

--There is NO central repository of complaints against builders.

So, If you are building a house in Texas I would suggest the following:

--Use a builder that is a member of the Home Builders Association. They usually keep up on all of the regulations and take continuing education courses.

--Use a builder that will incorporate the TRCC warranty and construction standards into the contract. The warranty is one of the best things the TRCC did along with the construction standards.

--Hire a 3rd party inspector. Don't rely on the city inspectors.

--Communicate with your builder and ask questions.

--Hire a 3rd party inspector (I know I said that already but it is important.)

--Check out your builder and get a comfort level. Building is a long and sometimes emotional process.

Wayne Caswell (HOT) replied:

Scott, I can tell you’re a builder, but you got much of it wrong with the TRCC, and I’m happy to engage in a public debate in this forum.

It’s well known that the agency was setup by Houston homebuilder Bob Perry as part of Tort Reform to establish additional roadblocks to civil suits against builders who built shoddy homes. Reports from two state agencies recommended abolishing this abusive agency since it did more public harm than good and protected builders more than homeowners. Read the reports. Every homeowner who testified wanted it abolished, and so did some of the builders. Over 94% of testimony was to abolish it.

Even without the TRCC, most homeowners are still forced into binding arbitration because of clauses in their non-negotiable sales contracts and warranty agreements. Arbitration is MUCH more expensive than a lawsuit and almost always favors industry over consumers, because arbiters rely on their repeat business.

The TRCC warranties were illusory and worthless – filled with exclusions like “soil conditions” and work done by or materials provided by “a third party” (i.e. a subcontractor). Reverting back to the implied warranty of habitability is far better.

Builder registration did nothing to ensure the availability of qualified builders, because anyone could register, including Cheetum Homes. A better way to regulate the industry is with builder licensing as done in 28 other high-growth states and as recommended in legislation that never got out of committee this session.

Some of your suggestions for homeowners are good, including hiring their own home inspector instead of relying on city inspectors. We include more recommendations for both buyers and builders at www.homeownersoftexas.org. And to all of the reputable builders out there who are frustrated competing with shoddy builders who cut corners and undercut your bid, we want to work with you to improve your industry and restore consumer confidence in buying a new home or remodeling an older one.

Mark Patel wrote:

America does not make anything good anymore. Start with cars. Everything good is an import it seems.

Russ Moerland replied:

Except when those imports are built here...

Mark Patel replied:

Well not too long ago, consumers were leery about buying Japanese American made cars.

Ray Lowe wrote:

Who is anyone trying to kid? The outlandish (appear to me as obviously criminal since they are/were premeditated and on a grand scale) practices of the likes of DR Horton and similar builders of refusing to use legal US labor and doing whatever - sub-sub-sub - charade to knowingly use non English speaking illegal workers of largely unknown background as part of their very business plan to maximize profit based upon exploitation (no benefits, and sub market wages) are the 6001b gorilla in this room. I offered to find qualified US workers for DR Horton when they said delays and lousy work finishing our house (after they pretended it was finished several times when it obviously wasn't) were due to a shortage of qualified labor. They repeatedly refused my help. In place I witnessed illegals again and again and they knew it.

Chris Barriteau replied:

Great point, after all many of the illegals didn't come here because we had better Burritos... they obviously came to work in the Construction and Agriculture business.

Now it would be a shame if the government prevented them from working in the demolition business - these structures have gotta go!

Angela Allen replied:

They might as well be working in finance now. What the hell.

Farrell Mcgoohan wrote:

I'm not surprised. During the last boom the builders hired anyone with a pulse in order to quickly slap together the soulless monstrosities that dot the landscape like the worst case of acne on a teenager's face.

Franklin Zounds wrote:

Where is that spirit of caveat emptor that you guys normally expound when it has something to do with healthcare, job loss, medical malpractice, product liability, etc.? Don't know how to inspect your house prior to purchase? Learn. Don't like shoddy construction done by illegals? Hire union and certified tradesmen or do the work yourself. Don't like shoddy materials? Buy locally produced products that cost more. Don't like Chinese manufactured drywall? Don't use drywall.

But especially don't buy a cookie cutter house in a subdivision. Pay a few bucks more to get something done by certified craftsmen.

No, I'm not union.

I do feel bad for those people stuck in these awful houses but no more than those going broke because they have no healthcare, have had healthcare that has destroyed their lives or have been hurt by shoddy consumer products.

Amazing how you tough capitalists whine when it affects you though.

Michael Eachus replied:

I must have missed where you suggested an alternative to the capitalist system.

Henry Grimmelsman replied:

There are plenty of "let the buyer beware" comments on here, so I'm not sure what you are talking about. Of course if it happens to an individual, they will themselves become fans of regulation all the sudden, like when a person gets condemned to death and all the sudden his family opposes the death penalty. But I think most of the posters who don't have a dog in the fight, myself included, while feeling somewhat sorry for them, think it's their problem to deal with.

Regulation and government by lawsuit would hardly help a lot of them anyway, since the worst builders are probably bankrupt by now and the shoddy carpenters are back in Mexico.

Anthony Guiterman wrote:

My present house is a one story wood/stucco /tile roof Del Webb built house bought in 2002 in Scottsdale AZ built in 1998. Absolutely no issues. Previous house was a one off builder house built in 1978 in So Central CT which I bought in 1983. This house had several construction issues, nothing huge but a few thousand to cleanup which was partially covered at closing. The Del Webb house costs much less a year to maintain than the salt box type colonial in CT did. Lesson learned buy from a reputable builder.

Douglas Blackburn wrote:

Two Anecdotes:

1) When looking at homes this past year in Northern VA, my wife and I talked to our insurance agent about whether or not we should bother looking at stucco homes because of the many issues we had read about. Our insurance agent laughed and said something along the lines of "Forget about stucco; I wouldn't bother looking at any homes built within the last 7-8 years. They've been put up too quickly, the builders have used unskilled labor, and you're going to have multiple structural problems with any of these newer developments"

2) My car broke down in Texas in 1999; I had to get a taxi ride home. I had a nice conversation with the taxi driver, and I asked him about how long he'd been a driver and what he'd done before. He said he had worked in home construction. I asked if he was a carpenter or a bricklayer. He laughed, and said "neither". The foreman would give him a hammer, he'd walk over to the framing, and he'd randomly pound nails until it was quitting time. He said he stopped working home construction since the work was too boring.

Chris Barriteau wrote:

New York City and Washington DC Brownstones or Limestones are some of the best built homes you can find. It's no coincidence that most of these home-building horror stories are almost exclusively in the Suburbs. Reason # 1001 to be a city-slicker...

Mike Lagoy wrote:

Most "builders" have never swung a hammer, laid block or wired a receptacle and therefore don't have the skill set or desire to identify and hire skilled tradesman. Most "builders" are "developers". In my mind there is a big distinction between the two. A "builder" is someone who has pride in his work and understands the trades. A "developer" has no knowledge of building trades and is simply interested in cashing checks as quickly as possible with no consideration for the outcome two months or two years down the road.

Unfortunately, it is difficult for consumers to identify shoddy residential construction work because it can be hid with drywall, insulation and paint. Also, unfortunately many home buyers are simply unwilling to pay for quality work and so the track builders live to build yet another awful community that will begin to fall apart in 10 years.

For those willing to pay for quality the key is to be patient and hire an independent building inspection engineer (not to be confused with the fly by night home inspectors with the ASHI "credential"). My wife and I bought a home 15 months ago that was built by what we thought was a reputable builder. We hired Safe-Gard Consolidated Home Inspectors by a referral from our real estate agent - not a smart decision. There were a few items I pointed out to the home inspector that he said were "fine". Shortly after moving in we realized the items I brought up weren't "fine" and took $35,000 to repair. I wish I had taken the time to find an independent building inspection engineer - I'll know next time.

William Isenberg wrote:

I have worked gathering evidence for construction defect litigation circa 1995. Amazing what is inside those non-insulated walls, with back-to-back phone, cable TV and electric outlets. Noisy?! --- Next try supply and waste pipe plumbing touching everything, also air conditioning units that make the whole roof vibrate, etc. --- Did anyone do a proper soils analysis and specify adequate drainage, don't be kidding ! Cracked slabs are standard, lawsuits sure to follow, be sure to file soon enough before a statute of limitations might expire.

Jason Seven wrote:

I guess it really depends on your builder. I was in constant communication with my agent and the builder as it was being put up. My house was completed in '07. No leaks, no cracks, no problems. But I've got good earthquake insurance should that day ever come. I live near Memphis.

STEVEN CROWLEY wrote:

I looked at the photos. Does anyone see "millions of dollars" to fix these cracks in 250 houses?

clifton jones wrote:

You can easily sue the builder of that home and get your investment returned.

Gregg Larson replied:

What an amazing Polly Anna attitude! Suing takes years and costs much time and money. 20k worth of defects is not worth a lawsuit since the experts and lawyers needed will cost so much. (easily 5k on experts) Then at the end of the day will you be able to collect your judgment? Probably not. Many builders will have gone under by that point.

Wayne Caswell (HOT) replied:

You can only sue if your sales contract or “free” warranty agreement doesn’t force you into binding arbitration, which is far more expensive than a lawsuit and is heavily stacked against the homeowner. Texas limits the kinds of damages that are allowed, excluding any compensatory or punitive damages that might deter future bad behavior, the recovery of attorney fees, and the ability to share costs and risks with others in a class action suit. And as Gregg said, even if you have your day in court and win a judgment against the contractor, collecting is another matter, making suits risky propositions. Builders have learned to hide personal assets behinds multiple limited liability corporations, personal homesteads, and bankruptcy protection. With builder licensing and a performance bond on each home, the homeowner would have assets to collect from. It’s the fair way of doing things, unlike the mechanics lien attached to your home by subcontractors and suppliers who don’t get paid by the builder. The message here is DON’T CLOSE on the home without an affidavit saying all debts are paid.