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ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration

Property Rights Denied!
Protecting HOA Members' Rights is NOT The #1 Priority
of Managed Communities
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Editorial Feature: Part One - Are Homeowners' Rights a Myth? 

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Pulte-Centex Big Slick Business Moves Offer No Help To Homeowners
Wednesday, 01 February 2012

Centex sues two local companies - Blames them for retaining wall collapse
Millions of dollars were spent by the subdivision's builder, Centex, repairing the wall and buying back 22 homes. Now, in the lawsuit, they are claiming they weren't responsible for the collapse. Centex says two local companies are to blame... But when Centex bought back those 22 homes, they bought their way into the HOA; giving them every right to sue the companies who designed and constructed the wall. If they win, homeowners probably won't see a dime of that money.

Centex sues two local companies - Blames them for retaining wall collapse

         Reported by: Mireya Villerreal

SAN ANTONIO - Tuesday marks the two-year anniversary of the Hills at Rivermist retaining wall collapse. And now a new lawsuit has been filed.

Millions of dollars were spent by the subdivision's builder, Centex, repairing the wall and buying back 22 homes. Now, in the lawsuit, they are claiming they weren't responsible for the collapse. Centex says two local companies are to blame.

The retaining wall at the Hills at Rivermist is owned by the homeowners association in that subdivision. But when Centex bought back those 22 homes, they bought their way into the HOA; giving them every right to sue the companies who designed and constructed the wall. If they win, homeowners probably won't see a dime of that money.

A shift in heavy soil combined with a poorly constructed wall caused the collapse back in January 2010.

In this newly-filed federal lawsuit, Centex claims Arias and Associates, the wall's designer, along with Gravity Walls, the builder, are responsible for the issues. They're suing for at least $2.5 million.

"I think if they recoup any of that money they should give it to some of us homeowners that have lost money also,” Chuck Cervantes, Hills at Rivermist homeowner, said.

The suit says Centex is just as innocent as the affected homeowners. But nowhere in the lawsuit does Centex talk about giving any of that $2.5 million to those residents.

"With the binding arbitration they forced us to go into, we have no recourse as to try and remedy our shortfalls as far as finance is concerned,” Cervantes explained.

Here's the deal - When these homeowners bought their new place inside the Hills at Rivermist subdivision they signed a binding arbitration clause. It keeps residents from suing their home builder, like Centex, if anything goes wrong and it forces them to mediate their problems outside a courtroom. This has become a general practice used by a majority of home builders.

"You lose your right to sue in case there's a problem,” Cervantes added. “That's how come we're stuck here, because we signed a binding arbitration agreement."

So, while Centex can try to recoup all the money it spent on buy-outs and building a new retaining wall, these homeowners are left with very few options.

Centex sent us a statement saying, while the homeowners can't sue them, the binding arbitration clause does not prevent them from suing arias and associates or gravity walls.

Neither one of those companies returned our calls today for comment.

Centex Statement - Valerie Dolenga
Two years ago on January 24, 2010, the Rivermist community experienced a significant soil shift at the hillside of the community. A lot of positive things have occurred since that time, including the construction of a new retaining wall that was completed this past summer. Additionally, we have just begun the process of marketing and listing several of the homes that were repurchased by the company. In fact, we recently sold one of the homes at a higher price per square foot previous to the incident. This is proof positive that residents who chose to live in Rivermist did so because of its great location, excellent school district, as well its accessibility to key highways and near the necessary conveniences. We look forward to the continued success of the Rivermist community.

In regards to the retaining wall:

This point needs some clarification. There was no "requirement" that the HOA take ownership of the retaining wall. In fact, the Rivermist retaining wall and common area property were already owned by the HOA prior to the failure of the wall. Centex Homes' repairs to the common area and construction of the new retaining wall did not change that.

As normal part of subdivision development across the United States, and as required by many cities, developers convey subdivision common areas and improvements (e.g., pools, amenity centers, subdivision walls and fences, etc.) to homeowners' associations upon the completion of development. The homeowners' associations are then in position to control the use and maintenance of those areas for the benefit of residents of the neighborhood.

In regards to the residents’ statement:

Centex spent millions of dollars covering the expenses for constructing a new retaining wall at the Rivermist community. However, should a resident want to pursue additional legal action, the binding arbitration language contained within our agreements does not prevent the homeowner from pursuing a lawsuit in a San Antonio court against another party, including a contractor.

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