Couple's home, built on former pond, plagued with water problems
Home also lacks an occupancy certificate after Centex failed to get required paperwork

By  Ricardo Gándara (rgandara@statesman.com; 445-3632), Austin American-Statesman, 6/29/2010
http://mo.statesman.com/news/statesmanwatch/couples-home-built-on-former-pond-plagued-with-777255.html?plckItemsPerPage=25&plckFindCommentKey=CommentKey:9b015f9e-ce18-4edc-a2bd-83d4a71875bd#pluck_comments_list

Girija Shanmugam and Shanmugam Sambasivam moved to Austin from Houston three years ago to follow their sons, who enrolled at the University of Texas to study computer and electrical engineering. The couple from India picked out their dream home in Woodland Hills, a Centex Homes subdivision east of U.S. 183 near FM 969.

"That dream has turned into a nightmare," Shanmugam Sambasivam said.

Their home has flooded three times, the result of faulty plumbing, the couple said. Each time, Centex fixed the problem and even extended their warranty.

But that wasn't the end of their problems. Water sometimes collected in their front yard and driveway after rains or when neighbors on higher ground on Sun Shower Bend watered their lawns. And an in-ground utility box in the front yard often held water.

Trying to find answers, the couple went to the city's Watershed Protection Department. They got a series of surprises, and now the builder is in trouble with the city over a missing occupancy permit for the home.

"Watershed Protection told us, 'Did you know your house was built on a pond?' " Girija Shanmugam said. On the department's website, she found an aerial photograph from 2003 of their home site and realized that the house is smack in the middle of what was a human-made stock pond.

"That didn't seem right that they would allow homes on top of a pond," she said. She wonders whether their water problems are caused by faulty plumbing or their home's location.

It's a rare but acceptable practice as long as certain procedures are followed, said Leon Barba, the city's building official, and George Adams, assistant director for the Neighborhood Planning and Zoning Department. Centex obtained a permit to drain the pond in February 2006, excavated it and brought in fill dirt. After the city inspected and accepted Centex's site plan for the subdivision, the builder began constructing homes.

After learning about the pond, the couple then were told by Watershed Protection that their house had failed final inspection and did not have a certificate of occupancy - a document from the city saying the house is ready to occupy.

Barba, the city building official, said Centex failed the final inspection for the couple's house before it was sold. "They didn't have their plans and specifications (house drawings), and there were weatherization issues involving caulking," he said.

Centex, which was responsible for correcting the weatherization problem and calling city inspectors back for the final inspection, did not follow through, Barba said.

"That's a serious issue," he said. "They violated the residential building code \u2026 the International Residential Code that the city follows. But as long as they make a good-faith effort, we'll work with them."

"We dropped the ball," Centex spokeswoman Valerie Dolenga said. "But that doesn't mean that the house is unlivable and unsafe. We are working with the city now to get the certificate of occupancy."

It's up to the Code Compliance Department, Barba said, to determine whether it will take action against Centex. Melissa Martinez, spokeswoman for Code Compliance, said there is no active case on Centex.

"And we haven't received a complaint on (the couple's) address. I talked with (Barba), and they are working directly with the builder to resolve this. And since they're moving forward toward resolution, it makes sense to let that take place," she said.

If they don't obtain the certificate of occupancy, the homeowners could be fined up to $2,400. However, in this case, it's Centex's responsibility, Martinez said. "This is an unusual situation," she said.

[There seems to be a pattern of Texas builders bribing city officials, but it's unclear if that happened in this case. Maybe the FBI should investigate like they are doing in San Antonio.]

Shanmugam and Sambasivam say Centex has more problems in the neighborhood. In researching the city's Planning and Development Review Department website, they found two more homes on their street that also failed final inspection. Barba said he found a total of five homes on Sun Shower Bend that failed final inspection.

"We've provided the information to the builder," he said. "They know what to provide and the fees involved."

Dolenga, the Centex spokeswoman, said she was unaware of permitting problems with other homes. "That's not our practice, but we'll look into it," she said.

There are more than 200 homes planned at Woodland Hills, with the first of two phases nearly completed.

Shanmugam said she is still perplexed that at closing, the builder and the mortgage company - Centex Mortgage - were unaware that the home had failed inspection and lacked a certificate of occupancy.

Ultimately, Barba said, it's the homeowners' responsibility to be educated in the buying process. "It's buyer beware," he said.

[HOT: The buyer is at an extreme disadvantage, especially when important information is hidden from them. The home-buying transaction is complex -- technically, legally, and financially -- and this is why government must provide consumer protections. A home is the largest and most expensive investment a person will ever make, and it's also the most complex and risky. As we've seen, builders and lenders have pushed the American Dream and shielded themselves from acccountability. That behavior, combined with the lack of consumer protections, led to the housing bubble and global financial collapse.]

Shanmugam and Sambasivam said they've asked Centex, which merged with Pulte Homes, for their money back or a new home.

"Of the three years we've been here, nine months have been spent dealing with the plumbing issues," Sambasivam said. "We've moved from one room to the next while they fixed things."

"I haven't slept much, and I think about it every day," his wife added. "It's been a stressful three years. My husband is a heart patient. It's been hard."

On Tuesday, a Centex manager and engineer were at the couple's home, giving them a 10-page report that said their research and testing did not show structural problems or mold concerns.

[RCLA (The Residential Construction Liability Act) gave builders the "opportunity to repair" defects and allows them to inspect their own work. It also limits their liability in defect claims.]

"We're not going to buy their home back since our engineers deem it safe. We'll address their issues accordingly," Dolenga said. "There is just no evidence that the home is not structurally sound."

Ed Hill, who lives on Quick Stream Drive, behind Sun Shower Bend, said the side of his house and a portion of his backyard are always wet and sometimes muddy.

"Water from other homes drains my way. It's like a river through my yard, so I want to know what's going on," he said.

Shanmugam said she thinks something's not right. "I think it's going to be a problem for other people, too," she said.

SELECTED READER COMMENTS:

Wayne Caswell (HOT) wrote:

Urban sprawl onto rich farmland -- land with expansive clay soil that’s often contaminated with decades of pesticide use - has contributed to the serious construction defects across the state and the nation. Expansive soil and resulting foundation failures have made homes unlivable and led to loan defaults, just as predatory loans with artificially inflated appraisals did.

Disregarding the pond issue, my quick analysis of USDA Web Soil Survey data (http://websoilsurvey.nrcs.usda.gov/app/WebSoilSurvey.aspx) shows that over 2/3 of the area where the Shanmugam home was built is classified as expansive clay and considered “very limited” for building without extensive remediation. What fill dirt did Centex use? Was it expansive clay too? City Planning officials too often ignore readily available USDA data that would help with zoning and permitting and suggest where building homes is a good idea and where it isn’t. It seems in this case that both Centex and the City may share responsibility. Read more at http://www.homeownersoftexas.org/Soil_Issues.pdf.

Froggy wrote:

Why is the certificate of occupancy not a required document at closing? And why are production building companies allowed also to own their own mortgage companies? That's a conflict of interest. Thanks for publishing this. It's good information for the public to be aware of. People who want to "do their homework" will have another clue about what to ask and what to look for.

Marko wrote:

A certificate of occupancy won't fix their drainage problems. Getting the city involved will only make things more complicated. Three years is way too patient. They won't be able to sell the house without disclosing the existing drainage problems. Their only choice is to hire a lawyer. [Good luck. Their contract probably forces them into the Kangaroo court of binding arbitration, and the U.S. Supreme Court just ruled that arbitrators, not judges, get to decide if that's fair.]

Monkshine wrote:

The city had no business allowing the builder to build in this property!!! Where is the record of inspections.. Sue the city!!! Enough of this.. !!!

P8riot wrote:

@Txlakeside: The city code inspectors know that they will get their $ from the builders in the form of payola for falsifying the paperwork on a regular basis.

searcher5 wrote:

You can't just fill in the pond. The clay liner that retains the water has to be dug out and removed. If that is not done, then it will always fill as the connecting dirt can't siphon the water away fast enough. The waterway input, as mention by one other gentleman, also may have to be modified/diverted to keep it from supplying water to the now defunct pond. Just trucking in dirt, now allows the pond to provide water up to 3 feet higher than before, based on siphon/capillary effect with the new dirt. This can be done, but it sounds like they took the short cut instead of the right way. Txlakeside is probably correct, the city either gave them a temporary order, or just looked the other way. Wonder who got the money in the bribe.

Skepizzle wrote:

The very sad fact is that when a contractor or a builder really screws up, it is the homeowner who pays. Litigation would probably cost as much as the house, and take years. Then there is the problem of actually collecting from a builder. You can't build on old lakebeds...over old pools...etc. It is madness.

jocjuke  wrote:

Centex owes this couple a new home, right away. They need to make this right. All the agencies that failed to do their jobs need to work with them for a just settlement. I hope they have a good lawyer, in case Centex and these agencies fail them again. [We need a Lemon Law for homes like the one we have for cars.]

Txlakeside wrote:

Someone needs to ask why a water meter and electric meter were set without the CO? My guess is the builder requested a temporary CO. The City has a very real track record of "overlooking" their own rules. All a builder has to do is thump their chest and the chicken-S city code enforcement will back down!

longhorns1 wrote:

Was the pond on a tributary? What happened to the tributary? Did they relocate it? or just fill it in? If they just filled it in, sounds illegal to try and cut off water from flowing downstream ...and maybe there is still underflow water going through there because they didn't alter the elevations that created the watercourse in the first place...if the pond was on a creek that is.

snell wrote:

Interesting that a bank would lend money on a home without a certificate of occupancy. When I bought AND sold my previous home a certificate of occupancy had to be presented at closing. Someone somewhere dropped the ball BIG TIME. Just goes to show that with Centex you get what you pay for.

jerkie wrote:

Centex is the builder, Centex is the mortgage company too....what do you expect?