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ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
New Jersey recommends Home Lemon Law
Saturday, 02 April 2005
Home building remedies urged
SCI: Industry rife with problems
In its final, 51-page report on its investigation into systemic problems in the building industry, the SCI outlines a battery of suggested changes. Key among the recommendations are an overhaul of the state's Consumer Fraud Act, the creation of a "lemon law" for new home buyers, and a requirement that all construction crew supervisors earn licenses and certification before they can work on New Jersey developments... In its report, the SCI outlines how a "lemon law" could protect buyers of new homes that are still seriously flawed after several repairs are made. The law could force the builder of such a home to buy it back.
 State of New Jersey Commission of Investigation Report
State of New Jersey commission of Investigation 51 page Report
TITLED: The Good, the Bad and the Ugly - New-Home Construction in New Jersey
SCI Latest Reports and Hearings

Asbury Park Press
Home building remedies urged
SCI: Industry rife with problems

TRENTON — After listening to two years of testimony from new homeowners frustrated that builders haven't fixed obvious defects, the State Commission of Investigation Thursday placed the task of reforming the home construction industry on the shoulders of the Legislature.

In its final, 51-page report on its investigation into systemic problems in the building industry, the SCI outlines a battery of suggested changes. Key among the recommendations are an overhaul of the state's Consumer Fraud Act, the creation of a "lemon law" for new home buyers, and a requirement that all construction crew supervisors earn licenses and certification before they can work on New Jersey developments.

"Rigorous investigation and analysis confirmed an astonishing statewide panorama of waste, fraud and abuse," the SCI states in its report. "Casting a broad net that reached into every corner of New Jersey, the commission found a system in which the public trust has been thoroughly shaken by graft, by greed and incompetence and by the failure of government to fulfill its fundamental duty to protect the safety and welfare of citizens."


"This report is not something that should be placed on a shelf to collect dust," said Francis E. Schiller, the former SCI chairman who presided over the public hearings. "I hope and trust this will lead to genuine reform."

But homeowners such as Lisa Rabig of Marlboro aren't holding their breath. Because of drainage problems on her property, which Rabig believes should have been caught by inspections years ago, her driveway often becomes a moat after moderate rainfall.

"Marlboro is almost built out, so nothing they can put together now would help much," Rabig said. "Manalapan is almost built out too. So what is this really going to do for anybody? It's the future they're looking to, where it's the past we're trying to rectify."

So far, four construction officials have been indicted stemming from referrals given by the SCI to various law enforcement agencies. And in an interview Thursday, Monmouth County Prosecutor John Kaye said more arrests are coming.

"I have been going through a list of cases with the supervisors, saying, "When are these cases going to be completed?' " Kaye said. "Several of these involve shoddy construction issues, several in Wall Township — Four Seasons is one. And there's still issues in Manalapan."

The Four Seasons and Allaire Country Club Estates developments in Wall, and Manalapan Chase in Manalapan, were cited at the SCI hearings as examples of what can go wrong with the home construction process.

Homeowners from the 460-unit Allaire Country Club Estates and the 400-unit Four Seasons at Wall have alleged building deficiencies, including sinkholes and other drainage issues. Manalapan Chase is a 52-unit development with a history of failed inspections and serious code violations, including frame and window problems.

"What we're talking about in the majority of these cases is where the construction was obviously inappropriate, or there were no inspections done, or there was no way an inspector should have approved the! home," Kaye said.

Some of the cases his office is now reviewing "are definitely going to end up in arrests," most likely of construction officials and "people who have duties to act in a certain way and failed to do so, either by recklessness or by intention," Kaye added.

The SCI estimates that thousands of New Jersey homeowners are victims of shoddy construction practices.

"We get complaints almost every day of the week, still," commission Deputy Director Charlotte K. Gaal said.

In its report, the SCI outlines how a "lemon law" could protect buyers of new homes that are still seriously flawed after several repairs are made. The law could force the builder of such a home to buy it back.

The SCI also wants basic coverage within the new-home warranty program to extend from one year to two; to extend water damage coverage to three years; and to create a 10-year eligibility period for "major construction and fire safety defects."

Much of what the SCI has recommended in its report stems from suggestions made by the state Department of Community Affairs in late 2004, that agency's Commissioner Susan Bass Levin said. The department has already drafted several bills aimed at reforming the construction industry, including extensive changes to the home warranty program.

"I would encourage that to be the initial focus," Bass Levin said. "Those are changes that could be done easily and could have a significant impact."

In a statement released Thursday, Patrick O'Keefe, chief executive officer of the New Jersey Builders Association, said that while "there may be debate on specific aspects of the report," the association stands behind efforts to reform the building industry.

The association is "determined to rectify the shortcomings that the commissioner has identified," O'Keefe stated.
 
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