CASE STUDIES
RESIDENTIAL CONSTRUCTION PROBLEMS IN TEXAS

This page is always under construction. You can help by sharing your own horror stories
               (with pics & video if possible). Post on our blog or send to .

Girija Shanmugam and Shanmugam Sambasivam (Austin)

The couple moved to Austin from Houston three years ago to follow their sons, who enrolled at the University of Texas. The new Centex home they bought was built on old farmland with expansive soil -- over a former stock pond no less. Needless to say, they've have many problems with moisture, plumbing leaks, and foundation cracks. Centex refuses to buy the home back because its own engineers say it's structurally sound. Their story, which was published in the Austin American-Statesman, includes a video interview, maps, and many reader comments.

Bob & Jane Cull (Dallas-area)

$58 Million Jury Award -- This is a text book example of a powerful builder abusing the legal system and using dominant resources to wear down an opponent. Bob and Jane Cull sued Perry Homes after Bob Perry refused to repair serious defects. They won a rare victory in arbitration (an $800,000 award), but rather than pay it Perry appealed again and again until the Texas Supreme Court vacated the award, sending it back to a lower court. On March 1, 2010, after over 10 years, a jury awarded the couple $58 million, but that judge said the amount was too high and sent both parties into mediation, again, to find a compromise. To date, the Culls have yet to get a dime. The case is notable because of Bob Perry's political influence and the fact that he gave large campaign contributions to all nine Supreme Court justices.

Bob Perry - the Godfather of Texas Homebuilding & Politics

We shine light on Houston homebuilder Bob Perry with a profile and collection of relevant articles. Perry is known for his deep pockets, political influence, creation of the TRCC, support of tort reform, and an aversion to the limelight.

Newlyweds sue Bad Builder (Houston, TX), posted 3/28/10, updated 4/1/10.

Because the newlyweds' case is still pending, they refer to the contractor as "Bad Builder," but that wasn't enough for their attorney, so we removed ALL identifying information and hold this out as an example of why details from such lawsuits are often never disclosed. More than a year after xxxxxx and xxxxxxxxxxxxx[the newlyweds] got married, bought their first home, closed on the sale, and moved in, the City of Houston "red tagged" it, saying the home never got a clean final inspection or Certificate of Occupancy. The City even threatened to fine the couple for moving in. Although they are new to the home buying process, they're standing up for their rights. We wish them well.

Ron & Carol Hemphill (Austin, TX), posted Jan'10

Attached to a “For Sale by Owner” flyer, Ron and Carol Hemphill document their story and their experience with Capital Pacific Homes, the TRCC, and binding arbitration. The $7,170 arbitration award that they “won” doesn’t even pay for their expert witnesses, much less their attorney fees, the $125,000 in documented damages to their Austin home, or the $4,000+ they paid for the arbitration proceedings, and it doesn't come close to covering consequential damages or punitive damages to deter future builder abuse. Their home now sits on the tax rolls valued at less than half of what they paid, and they may never sell the home. They don’t have the money needed to fix it, have aging parents in a nursing home that need attention and a son in college who may not finish, because they can't tap home equity for tuition. The experience has been financially, emotionally, and physically devastating, and only their religious faith keeps them going.

Texas does not require builders to disclose known defects and problems in new homes, but full disclosure is required to sell an existing homes. The Hemphills take full disclosure to a new level by warning others of laws that protect builders, hurt homeowners, and make Texas a magnet for unscrupulous builders doing shoddy work - the Homebuilding Wild West.

• The sales flyer and story details 
• The award details and engineering reports 
• Binding Arbitration: Unfair & Everywhere (HOT webpage with many other links) 

Texas gives builders the Opportunity to Repair. (Should they?), posted Jan'10

RCLA is a law that gives Texas home builders the opportunity to repair construction defects and inspect their own work to verify that it was good. These images question the quality of the FIX.

David Barnard (Grand Prairie, TX), posted Dec'09

Construction Fraud -- Marcus Buckley, an NFL football player – turned homebuilder, defrauds buyer of millions and then hides his assets to avoid paying court judgments. David Bernard, the buyer, was lucky in one respect. He was able to take Buckley to court and won, but he didn’t get a dime because Texas laws let builders hide their assets. Buckley never faced criminal charges because cases like this are treated as civil contract disputes rather than felony crimes. Meanwhile, David Bernard lost over $1 million due to builder fraud. We need to give officials the legal tools they need by changing the laws to make construction fraud a felony.

Scott Montgomerie (San Angelo, TX), updated 7/16/10

Expansive Soil -- The retirement home of Scott and Diane was built on expansive soil in Southland Hills without a properly engineered foundation. It is now un-inhabitable and un-insurable and has left the homeowners with over $600,000 in unrecoverable losses. Texas laws and public officials provided no help or protection, so the couple has made it their life's mission to share their story, help protect others, and change the Texas laws that protect unscrupulous builders rather than the public.  

Sandee Bradshaw (Hutto, TX)

Expansive Soil -- "As a result of our home being built on expansive soil, we have shifting of the foundation resulting in cracks in the walls and ceilings, sticking doors, a falling down fence, electrical problems, a wavy roof and mold...  It is time that homeowners are protected from shoddy built homes and builders are penalized if they don't build it right the first time!"

Wayne Caswell (Cedar Park, TX)

HOT Communications Director describes the Rapid-fire Closing Process. "NEVER sign ANYTHING without first reading and understanding it, or at least having your own attorney review it. That’s what we were taught, but it’s not always possible, as I personally learned while refinancing my home. I can only imagine the plight of first-time home buyers or others who naively trust what they’re told."

Eliza & Bob Bushn (Dripping Springs, Texas)

Defects Appear Too Late -- Eliza and Bob bought a beautiful home to retire in but had to tear it down. The TRCC could not force the careless builder to repair their shoddy work, so the Bushns lost over $750,000.

Connie & Bobby Covington (Pleasanton, Texas)

A Natural Habitat? -- The home that Connie and Bobby built as a retirement home was defective from the start, but the couple felt pressure to close. The TRCC inspectors determined that it had defective design, framing and foundation, but they lacked the authority to force the builder to fix it. Now the house is so dangerous that scorpions and snakes live in the walls, and the Covingtons had to move out of their own home.

Alice & Bob Phipps (Brookeland, Texas)

Retirement Delayed -- Alice and Bob planned to building a modest home to retire and grow old in. But instead, they were deceived by their builder and lenders, and ended up almost half-million dollars in debt. They now live in a sub-par home, with so many serious defects that there's no way to correct them. The TRCC was powerless to help, and the litigation is still pending.

Cheryl Sparks Rea (Hutto, Texas)

Fraudulent HUD forms -- The builder got government loans based on fraudulent HUD forms and failed to disclose the expansive clay soils that have since caused problems with the foundation and other structural elements. To compound her problem, the City of Hutto destroyed inspection records, and the TRCC process only added frustration and time while being unable to force a resolution. No attorney will take a case like this, where the regulatory cards are stacked in favor of the builder.

  HuttoParke problems continue. Values suffer.

From Austin's Keller Williams Realty blog -- It is with great fascination that I first saw last year HuttoParke home owners made sure that everyone knew how poorly their homes were built. Realtors have essentially blackballed the subdivision and refuse to list or show homes, making it hard for anyone living there to sell their homes.

Neighbors blame builder Lennar Homes for defective homes 

NEWS 8 launches story about HuttoParke and residents complaints regarding nail pops, cracked foundations, and shoddy repairs. Residents continue to protest and picket against the builder Lennar corporation... 

Hutto clay leave some homes needing repair 

From http://www.searchhutto.com/huttoparke/Hutto_clay.html -- Defective homes are now a national problem. Builders like Lennar Homes are selling defective homes with little regard for building codes. Lennar Homes can get around building codes and obtain certificates of occupancy on defective homes by simply filing an affidavit that the home meets the building code after an inspection by inspectors Lennar Homes hires. It is now impossible for local inspectors to inspect all homes being built. The result is a flood of defective homes, with little recourse for the buyers. We cannot address all of the issues, so we have decided to start with Lennar Homes in regard to defects, code violations and misleading self inspections.

Our soil is the source of our quandary (and Lennar Homes the cause of our frustration) 

HuttoParke neighbors, upset with Lennar Homes and the TRCC, produced this website rich with information, photos, videos, and testimonials.

Lou McCreary (Austin, Texas board certified attorney)

Lou specializes in civil trial law and has extensive experience representing homeowners. He submitted the following six case studies.

CASE 1 -- Contractor defaults in construction of single family residence; despite building code and contract  requirement of furnishing liability insurance, Contractor files false certificate of insurance; Contractor judgment-proof; no recovery from Contractor. Roof trusses furnished defective; entire structure so defective must be torn down.

CASE 2 -- Foundation cracks existing at time ownership of new home transferred but hidden by construction debris; foundation not built to withstand forces of expansive clay soils throughout subdivision; homeowners forced to sue Contractor.

CASE 3 -- Foundation cracks and drainage problems; homeowner follows SIRP process at great expense; no enforceable order to require Contractor to repurchase home or recover loss of value.

CASE 4 -- Remodeler performs structural work without engineering expertise; “estimates” size of needed beam supports; beam supports incorrect size; owners incur over $100,000.00 in cost of repairs to remove and rebuild; remodeler has no insurance and owners forced to accept insufficient settlement.

CASE 5 -- Unqualified remodeler performs shoddy work, adds upper room with[out] any engineering approval; upper room must be torn down; same salesman who “sold” the job responsible for adding the room and inspecting; remodeler tells owners no building permit required; no inspection until after work found defective.

CASE 6 -- Homeowner follows SIRP; inspector does cursory inspection; finds against homeowner; homeowner appeals inspection report in March, 2008; appeal still pending in August, 2008; owner cannot move case forward without final ruling from TRCC.

Your Example Here

Do you have a home building horror story to share? Please send us a description of your experience with the builder, TRCC or others that show problems with the current homebuilding industry. Include photos if possible. Email: