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HOBB Weekly Update Message
Monday, 26 February 2007

A message from Janet Ahmad - This week’s volume of news is incredible

A message from Janet Ahmad
This week’s volume of news is incredible.
 
As predicted this year is shaping up to be one of the best in many years, for the restoration of consumer protection rights.  The filing of a bill (HB1686) by Representative Ruth Jones McClendon of Texas last week has to rank as one of the most exciting news events thus far.  

The 
McClendon bill would effectively ban the use of binding mandatory arbitration (BMA) agreements in contracts for new homes as well as home repairs.

For the first time in history home improvement contractors would be regulated; which is an important issue that AARP has been promoting for sometime.  Additionally, for the first time a salesperson that negotiates a sales contract on behalf of a builder would be regulated.
  

Builders could be disciplined for misrepresentation, abandoning or willfully failing to perform on a contract, disregarding plans or specifications or engaging in fraud.  A recovery fund for homeowners would be created and all builders would be required to carry insurance and be bonded.  Finally, the McClendon bill would create a private cause of action against any builder who violates the Texas Residential Construction Commission (TRCC) rules, and most important buyers would not be subjected to binding arbitration.

Please take a few minutes to write a note to thank Representative McClendon at,  This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .  It’s up to us to support the bill and ultimately the wisdom of our elected officials.

In other national news:
America exports poor construction practices abroad.  In a government reports investigators charge that an American construction company managed to turn a flagship project to help train Iraqi police into a hall of horrors using taxpayer money.  It was reported as a disaster from the start: incomplete and substandard designs, shoddy construction and no real quality control.  Sound familiar?

Bloomberg News reports: KB Home, the fifth-largest U.S. homebuilder is under criminal investigation. The East Valley Tribune reports on defectes in Palm Harbor Homes. Columnist Glenn Haege reports on the 2007 International Builders Show and questions whether most builders care.  Paul Bland writes: American Arbitration Association Breaks Its Promise Not to Hear Pre-Dispute Arbitration.  A Texas Supreme Court Justice says private litigation BMA may harm public good. Then read the mess in Florida . And,  Madison County gets tough on codes.

Don’t miss a Homeowner's Website - Bad House, Mold & Leukemia.

Together we have and will continue to make a difference!  Help us to help you.
Please take a few minutes to post your comments on the
 
H O B B   F o r u m   and write you elected officials.  Your participation is vital.
Thank you,
Janet Ahmad, President 
Home Owners for Better Building
 **********************************************************************
NEWS UPDATES:
 

Houston HOBB Spokesperson Cohn says TRCC has little power
ABC 13 Houston Reports - One bill would remove binding arbitration clauses from new home contracts
When Cohn learned about the problems she says she called her builder, but the builder would not fix the house. Cohn then learned she could take her case before the Texas Residential Construction Commission, but discovered the TRCC had little power to force the builder to make repairs. "TRCC from what I experienced and have heard so far is their hands are really tied," Cohn lamented. But that may change soon. The state legislature is considering several bills that would strengthen the TRCC. One bill would remove binding arbitration clauses from new home contracts and create a fund to pay homeowners for claims when builders can't. The TRCC would recoup the money from a builder's insurer. Read more...

Austin KVUE- TRCC Under Fire
Special Assignment - Agency Under Fire
Homeownership has long been considered the ultimate American dream. But building a new home can easily turn into a nightmare. The state agency created to resolve differences between homeowners and homebuilders is under fire. Some homeowners say it's not working and they have nowhere left to turn...Homeowner Connie Hudson: So far I think it seems to me to be a wasted state agency. If they can’t help a person in my situation then I don’t know why they exist...  Homeowner Betsy Martinez: It was absolutely a waste of time a waste of money and it was irritating that we had to go through whole thing for nothing... TexPIRG’s Jeff Brooks :  As things stand now the TRCC instructs a builder to make repairs to somebody’s house the builder just ignores them.  So if 92% of people  they find flaw and only 14% are getting repairs made there’s obviously a very big problem. See video report

Bill address Binding Arbitration Clauses in Builder Contracts
A service to homebuyers
The lead article in the Denver & the West section of last week's Sunday Denver Post took on a very important topic: the rights of homeowners to sue homebuilders over defective construction. Unfortunately, the article was missing some important information. The article, by Karen Crummy, looked at the current debate in the state legislature about a bill to prohibit new home sales contracts in which the buyer waives some of his rights to sue the homebuilder. The article performed a very important public service by informing readers that some of these waivers may be unenforceable in court, according to a University of Denver professor. Related article: Homebuyers cede rights          Read more...

America takes shoddy construction practices to Iraq
Did Iraq contractor fleece American taxpayers?
New revelations have emerged about how tens of millions of taxpayer dollars have been wasted in Iraq .  A new report by government watchdogs singles out a big American contractor — Parsons — for shoddy work. Investigators charge that Parsons managed to turn a flagship project to help train Iraqi police into a hall of horrors using taxpayer money...the American construction company turned it into a disaster from the start: incomplete and substandard designs, shoddy construction and no real quality control. "This is the worst project that my inspectors have visited," says Stuart Bowen, inspector general for Iraq . Read more...

Answers Available But Do Most Builders Care
Builders show was chock-full of new 'green' products
A "green" product is one that is significantly more environmentally benign than its competitors... It can have lower contaminating ingredients, such as low or no-VOC paint. It can be more energy efficient...It can reduce risk, such as a mold-killer or mold-resistant product..."Mold is gold" is a term from the legal industry. While good for lawyers. It was bad for the members of the building industry being sued. "There is an answer to every building problem right here on this floor. The problem is that most of the builders and tradespeople don't know about it." Many builders and tradespeople don't go to trade shows because they are too busy and figure they can get by with what they already know.  That's unfortunate because the products they didn't see and the classes they didn't attend could solve many building and home improvement problems. Read more...

Two Year Old Streets left with dips, patches and cracks
Fort Worth is suing over broken streets
The city is suing a subdivision developer and a paving contractor, saying they're responsible for broken streets that have cost taxpayers tens of thousands of dollars. The suit accuses Arcadia Park Limited Partners and Site Concrete of shoddy street construction in the Arcadia Park subdivision in far north Fort Worth . Less than two years after the streets were finished, two blocks of Rainy Lake Drive "were discovered to have been so badly constructed that they must be completely rebuilt," the suit says. Today, Rainy Lake Drive is webbed with cracks and pocked with breaks, dips and patches of asphalt. City officials say it will have to be rebuilt. Read more...

KB Home, the fifth-largest U.S. homebuilder under criminal investigation
KB Home options spur criminal probe
KB Home, which is also being investigated by securities regulators, joins more than 50 other companies, including Apple Inc., that face federal criminal probes in the widening options scandal, according to data compiled by Bloomberg. "The U.S. attorney doesn't get involved unless it's a very egregious situation," said Jason Lee, a San Francisco attorney who worked for the Securities and Exchange Commission's enforcement division. "They are looking at whether there's evidence that individual executives went out to accrue benefits for themselves at the expense of shareholders." Read more...

KB Home US Justice Dept. Probe
US Justice Dept. looking into past KB Home options
NEW YORK , Feb 23 (Reuters) - Federal investigators are looking into past stock-options backdating at KB Home, but the the No. 5 U.S. home builder is not a target of the investigation, the company said on Friday. "The Department of Justice is also looking into these practices, but has informed KB Home that it is not a target of this investigation," KB said. The U.S. Securities and Exchange Commission already has an ongoing investigation into the matter. "KB Home has and intends to fully cooperate with any government agency looking into this matter," the company said.

Defective Palm Harbor Homes
McGavin Ranch proof buying home is hard
Monday’s Tribune, the 179-lot, 55-plus modular house community near Southern and Ellsworth roads is home to a lot of unhappy campers. Along with the putting green, heated pool and other standard amenities of a retirement community, dozens of homeowners have had to contend with cracked bathtubs, demonic doorbells and dented vents. ... Palm Harbor also bears some responsibility for allowing its factories and contractors to put out so many defective homes, and for the delays in repairs ... Read more...

Watchdog Group Public Citizen Files Friends of the Court Brief on Lennar Homes Free Speech Issue
Is 'gripe site' protected free speech?
A consumer watchdog group founded by Ralph Nader has come to the defense of a Stuart real estate broker who is being sued by Lennar Corp. The suit stems from the use of the home builder's name in a Web site that criticizes the quality of several of Lennar's houses. Public Citizen, based in Washington , is filing a friend of the court brief asking Judge Larry Shack to throw out Lennar's trademark infringement claims against Mike Morgan because his "gripe site" is protected by the Constitutional right to free speech. Read more...

Promise not important to American Arbitration Association - Business More Important
American Arbitration Association Breaks Its Promise Not to Hear Pre-Dispute Arbitration
In a number of public statements over the last four years, the AAA has solemnly promised the public, the media and legislators that notwithstanding any contract agreements to the contrary, it would not handle pre-dispute binding arbitrations in cases brought by medical patients against health care institutions.  But, I have just learned of a serious instance where the AAA has quietly broken that widely trumpeted promise.  Apparently, the AAA IS administering arbitrations in medical cases when it feels like doing so. Read more...

Major Overhaul of the TRCC
Texas State Representative Ruth Jones McClendon files outstanding bill – HB1686
The bill would effectively ban the use of mandatory arbitration agreements in contracts for homes or home repairs, require all builders to be registered with TRCC and to carry insurance.  The bill would also regulate home improvement contractors for any repairs costing more than $2,500 and much more...  Read responses to bill and add your comments         Read more...

New Homeowner's Website - Bad House, Mold & Leukemia
Levitt and Sons Home 
Try to imagine the horror and disappointment I felt just after successfully completing my first round of Chemotherapy, when a nurse stepped into my room at MD Anderson Cancer Center and asked, "I bet you are glad to be going home"! Yet, just one month after being diagnosed with Acute Myelogenous Leukemia, I was not able to return home due to an ongoing problem with mold growth in our newly constructed home  See homeowner's website

Texas Supreme Court Justice says private litigation may harm public good
Texas ' chief justice calls for overhaul of state courts
It should also examine the growing use of private dispute resolution to settle legal disputes outside the public courts, Jefferson insisted.  "The outcomes in a private system need not be consistent," he said, warning that injustice can result because "appellate review is virtually nonexistent." In addition, he cautioned, "a privately litigated matter may well affect public rights. Its resolution may ultimately harm the public good or, because those decisions are secret, impede an innovation to a recurring problem, much to the detriment of Texas citizens." Read more...

Mess in Florida
St Pete Times - Pine Ridge residents up in arms over builder
In the evocatively named community of Pine Ridge at Sugar Creek, recent events have not been so sweet for residents. Built at the height of Pasco 's residential market boom nearly two years ago, homes at the development on State Road 52 used to sell for $300,000. But when residents found out the developer sold some neighboring houses for $199,000 last month, they saw a telling signal - and it wasn't about sagging markets or buyer's remorse. Read more...

Madison County gets tough on codes
Madison mayor, builder end dispute
Ten homes in upscale Woods Crossing subdivision are on the market again after repairs were made to bring them up to city code. Madison code enforcement issued stop-work notices to father-and-son builders John and Gregory Gussio on Oct. 6 for the homes in the subdivision on Rice Road.  A judge granted an injunction in December allowing Gussio Realty to fix what the city cited as deficiencies. Read more...

 
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