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ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
Letters to the Editors
Friday, 03 June 2005

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Day in Court with DR Horton
Jury Awards Compensatory Damages to 4 Bridlewood Homeowners - Another Settles!
September 16, 2006
Kurt Gutting

The Bridlewood group in Louisville , KY   finally got their day in court, which ended yesterday with compensatory damages ranging from $4,000 to $6,000 each.  Also, one party in the suit settled with DR Horton before the trial began.

There were some disappointments, however:  One case was thrown out and the jury found for Horton in the case of two other plaintiffs.  Also, the (very conservative) judge agreed not to allow the jury to consider punitive damages because of a change in Kentucky law that essentially removes sales fraud liability from an employer if the employer did not direct the employees to commit fraud.

 The fact that Horton was conveniently unable to produce personnel records and therefore unable to place anybody on the witness stand who could have testified where the misrepresentations could have come from only helped the judge in ruling on the motion. 

Regardless of how the judge ruled, however, the jury found 10 to 2 in favor of us, and in later conversations with the jury, it sounds like there would have been a decent chance that punitive damages would have been awarded.  As the leader of the group, it was very cathartic to get in the face of DR Horton VP and in-house counsel, David Maurice, yesterday and give him my expectations of DR Horton.

We are now waiting on the judges decision whether to allow interest on the money since we all took out mortgages, however based on the fact that he ruled overwhelmingly against the plaintiffs during the trial, I am pretty sure he will deny it.  We also have 30 days to decide on whether to appeal, that would keep Horton tied up in Kentucky courts for another 3-5 years. 

Thank you all for your support and suggestions as we've battled an $11 billion per year monster.

Responces to articles written by the Homebuilding Industry in defence of TRCC

February 20,2006
Dear Editor: 
The recent articles written by Mr. Rick Montelongo regarding the Texas Residential Construction Commission (TRCC) have prompted me to offer a few comments. 

He stated that the TRCC is available to solve disputes between builders and consumers, and listed the ten (yes, ten) steps that consumers must follow to get disputes resolved.  The TRCC claims to resolve disputes, but rest assured, the resolution will be solidly in favor of the builder, not the consumer.  The reason is that the TRCC membership consists entirely of builders.  Consumers are not represented on the commission.  What’s that old saw about the foxes being placed in charge of the henhouse?  No wonder Mr. Montelongo is smiling broadly in his by-line photograph.  In fact, I’m surprised that he doesn’t have loose feathers on his face. 

One of the most telling features of Mr. Montelongo’s articles (e.g. Real Estate Section, February 19, 2006 ) is the disclaimer that appears at the bottom.  It states that he is the president of the Greater San Antonio Builder’s Association (GSABA), a local trade association that offers opportunities to its members to display their products and services.  The disclaimer further states that GSABA makes no representation, express or implied, regarding the qualifications of its members or the quality of their products and services.  I couldn’t have said it better myself.  Too many people who engage in the construction of homes are gentlemen with impoverished ethical standards.  Obviously, he knows his members better than I do --- hence, the necessity of a disclaimer.  The TRCC and the GSABA clearly exist to protect builders at the expense of consumers.
Don Smith

February 10, 2006
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Recent editorial commentary, “Let new home agency build momentum”

Austin-American Statesman
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Recent editorial commentary, “Unfair criticism of agency”
It is without doubt that Mr. George Lewis, president, Texas Association of Builders, would totally disagree with any report criticizing the homebuilders’ pet agency, the Texas Residential Construction Commission (TRCC).

As a Texas homeowner who is still - more than 7 years since purchase - living the nightmare of owning a shoddily built, mold contaminated home, I applaud the heroic stand of State Representative Todd Smith (R) and State Comptroller Carole Keeton Strayhorn (R) and the accurate investigative report about the TRCC. It is encouraging to see that there are still a few elected officials that have the political integrity to represent the best interests of the citizens of this great state rather than corporate greed and influence.

In a Houston Chronicle news article, May 28, 2005, by Clay Robison, he reports, “Consider how the Residential Construction Commission came to be created and how it was appointed. According to a report released earlier this year by public advocacy groups, Texas homebuilders donated $5 million to executive and legislative candidates, political parties and political action committees during the 2002 election cycle……….” “ Houston homebuilder Bob Perry, a major contributor to Gov. Rick Perry and Republican causes, gave $3.7 million of the total.” “The new law established some construction and warranty standards for the new agency to regulate, but its primary purpose was to offer homebuilders protection against lawsuits brought by unhappy customers.”

The comptroller’s report released late January disclosed what consumer advocates have said for many years since the Commission/TRCC was proposed, including:
· The Commission was created by the builders for the builders.
· Provides protection for builders not homeowners.
· The inspection process is hard to use, expensive, and ineffective.
· The Commission has failed in its original purpose which was to curb the need (by dissatisfied homebuyers) for legal action.
· The Commission is dominated by the homebuilding industry.
· The Commission should be abolished.
The entire detailed report can be viewed at
http://www.cpa.state.tx.us/trcc which validates all the issues that have been brought to the attention of our elected leaders. Dissatisfied homebuyers are better served by contacting their state elected officials to voice their home construction concerns than this hapless homebuilders’ agency. Until the legislature makes significant changes to the law, the Commission will continue to be nothing more than a homebuilders’ protection agency.
Dr. David Becka and Family
Frisco, Texas

Austin-American Statesman
Unfair criticism of agency
Editorial by George Lewis President, Texas Association of Builders

2/8/2006 Response to letters in regards to homebuilding in the state of Texas
The Texas Residential Construction Commission (TRCC) looks like a good thing on paper. At the very least, and possibly at very most, it gives some credibility to a perspective shared by many victims of bad construction. There is a serious problem in new home construction that is not being adequately met with consumer protection. I, like many of my fellow victims, complained to my government representatives about lack of consumer protection. I don’t think any of us would have asked for the installment of a new bureaucracy to address our problems. Bureaucracies of this type, by their very nature, tend address one problem by creating five more in the process.The articles are just a great representation of how big business and bad politics can affect the good people of Texas. I'm just fumed at the statistics that are reported by the BUILDER.

Does the TRCC explain to its educated consumers that the board is run by home builders and that the resolutions TRCC may agree upon are not enforceable since the agency has no real clout? I think this is not the case.

I'm an unhappy homeowner in the state of Texas and I have learned a lot over the past year. The main thing is that the average Good Samaritan expects the builder to do the right thing, but really never realizes the potential problems that exist until its to late. Since the law HB730 came into affect we can not use our judicial system to resolve disputes with the home builder -- that's funny I don't remember getting a tax brake for not having the court system as an option. Yet from the representatives who support the TRCC all I heard was you need to get a lawyer. I would if I could find one who will overlook all political roadblocks put in place to detour them. Not to mention the cost if one decided to take the case on with no intention to win.

All in all we require plumbers, hairstylist, nail professionals, electricians, drivers, to be licensed but do not require builders to be licensed (Gotta love it). The other question is why is there a fee to complain to the very people who you are complaining about. What if I can't afford the fee? I guess I'm not included in that statistic? It's called lying with statistics.

I have attached a statistic that you may find interesting (all data was used from the Williamson county appraisal district) in regards to foreclosure rates. Does the TRCC take into consideration homeowners that foreclose because of erroneous promises or not mention homeowners who lured in to the "we will waive the title fee" if you set your loan up through the home builder than they turn around and sell the loan to another bank and the foreclosure does not affect the home builder but the very community that home builders are promised.

These are also legitimate concerns that should be addressed. If the builder promises a community and its ravaged with foreclosures and renters, does the TRCC take that into consideration. After all it's not your problem until it's your problem.

The quality of homes are less and less stable as the years pass and that's because the builders know they can get away with it? I know lets blame the unstable economy for faulty work and unethical business practices.

I'm not saying all builders are bad, but we are lowering the bar by supporting the current law in place and hiding behind a facade of an agency (TRCC). Hey builders you want to regulate yourself, help to change the law from binding arbitration to, if you think you we are in the wrong do it the old fashion way and use your judicial system (oops can't do that, I wonder why?). Maybe it's because of all the lobbyist representing the home builders. If an issue can be resolved out of court with good intent the homeowner will jump at the opportunity to try and resolve the problems with as little headache as possible. Homeowners just want to feel as though the product is not faulty and can address the concerns with the builder at fault.

Another suggestion is how bout the TRCC consists of unbiased board members and inspectors that has everyone's best interest at hand. That would be to easy! You don't have to do away with the TRCC to fix the problem just do away with the filing fee, the board members that have conflict of interest, change the binding arbitration clause and how about license the builder to be held accountable for the quality of workmanship. As I can go on and on, here is one last tidbit, I can't sue the builder if they sell me a bad product but I can be sued and held liable by another homeowner if I sell the very same home to them. I also made phone calls to homeowners that used the TRCC and an overwhelming majority were unhappy with the response and some never received resolution. Make it FAIR!

Another note the statesman has also fallen victim to the big business takeover. It's funny how a group of homeowners, inspector and non profit organization rally to give you this information in an two hour interview and all we get back is "we will look in to it". That very next weekend we see a full blown ad from one of the very builders we complained about (and now this article). Yet I have not seen one article from the statesman since that interview from the homeowner’s perspective. That's fair journalism! We have gone to city council meetings, hearing committees, the Statesmen, television, exhausted every avenue and get the same response. It seems as though everyone is concerned but hands are tied. I wonder with what? I just have one thank you to the many men and women who gave their life to give us freedom of speech! That is my families only saving grace. I hope that never changes! See our website and the foreclosure report:
Thanks for the time, Mike Zawaideh

2/8/2006 A perspective from a victim of construction defects
Evident in the recent report on TRCC shortcomings, the new bureaucracy primarily rerouted complaints about bad construction. It could not force or enforce any rules or rulings. The fact it was created virtually toothless, is a fair measure of its actual intent by its creators. There was little structural integrity in its original construction to support consumers. The first issue we had as victims of builder defects was the inability to reach quick and fair resolutions to disputes. The TRCC did not in fact replace a suggested prior alternative of settling disputes in court, where I personally still believe they belong. We didn’t really have that recourse readily available. Binding arbitration created by and for the builder, was the industry’s first response at so called “self regulation” of a serious consumer problem. Years of self regulation in handling defects has in actuality multiplied the consumer’s problems.

What we need are enforceable laws that are constitutional in basis, not more bureaucracy that side steps fundamental rights of consumers, and tends to shield an industry from fairness and liabilities. Really listen to victims. We are somewhat like people with rare but curable diseases. Until you or someone you’re close too who has been directly affected by this relatively rare disease, it’s likely you don’t feel the deep impact this disease causes to victims. Even if you can load us up in some statistical analysis to make us look insignificant as victims, we can’t fairly be made insignificant. While the home building industry may hold the clout from the economic growth tied to their industry, it’s really the buyers who created the economic powerhouses seeking to evade complete accountability.

I’m writing this from an apartment. My home is a few miles down the road, abandoned when it became uninhabitable due to builder defects. We attempted every recourse available, spending hundreds of hours mired in bureaucracy we felt certain was stacked against us. In time the builder flat out told us, nobody could make them do anything, and they would not do anything regardless of their responsibility for damages, because they didn’t have to. So in the end, we have been left to manage on our own, with losses exceeding six figures. As is common for victims, more than just money has been lost, though to the builder, that seemed to be the only issue.

Our builder’s CEO (owner) just bought an additional $71,000,000 home in Florida for himself. He can fly between homes in a private jet. He personally donates six figures in campaign contributions, adding to an industry that donates millions to political parties, and he had our current president at his home for a fundraiser. To say this issue isn’t political seems misleading. We now hope to move back into our self renovated and repaired home, stacked with debt and nearly crippled with losses. When we bought the home, we wanted to live IN our home, not FOR it. Criminal defects cost the builder $0. The company profited without regard to negligence, and no one even debates that anymore, including the builder. Is there really any debate why that’s wrong, or why that should never happen?

If there were consumer protection laws that covered us, we would have found them and applied them justly. Even if we could have gone to the TRCC when our crisis went beyond our means, we still would have fallen through the cracks, as so many victims still do. We need sound applicable laws and/or enforcement of existing laws, not more bureaucracies like this. Self regulation on this issue has been given more than a decade to develop, and if anything, things have gone backwards for the consumer.
Ronald Reed Jackson

2/7/2006 Response to your TRCC Editorial
Your comments regarding the recent TRCC Investigation are both arrogant and ignorant. The TRCC has been worthless to me and here's why: I purchased a new condo in Houston where I immediately discovered mold and got sick after moving in. Today, my condo remains uninhabitable, I have since moved out, and remain homeless. The Governor and I both thought TRCC could help me in my condo troubles, but we were both wrong. It took six months for me to find out - and the Governor should have known better than waste my time.

Governor Perry suggested in a letter that I seek TRCCs help on getting my condo fixed. He provided me with the contact info for TRCC, the address to write them as if all my condo troubles would be solved. So I did. Months later, TRCC responded: Sorry, but our agency can't help you, TRCC doesn't include condos only 'free standing homes'. A condo is not a home. Our own politicians do not know this, they don't even understand TRCC.

Being misguided and deceived by our Governor is flat out wrong. Perry seems no sympathy to understand the lack of home owner's protection within a state agency he created nor which types of homes it even includes. And for very good reason -why should he? It's you - the builders who paid him to build this agency, who cares about the homeowners needs anyway?
I am disgusted with your response. You obviously have not walked in the shoes of a defective home owner nor do you have an ounce of sympathy for the victims of shoddy construction.
Heather Mickelson, Houston, TX
"Homeless in Houston" - Tremont Tower Condo Owner

Herald Tribune
December 25, 2005
Why home construction may not be completed
You recently ran an article about customers of Laurel Lakes-Lennar Corp. homes having problems with the completion of half-a-million-dollar-plus homes. As a tradesman and superintendent locally for 25 years, I'd like to offer suggestions and opinions.

Large corporations may try to sell quality control as a factor for superior construction, but in reality they usually offer little if any hands-on oversight. Construction is doled out to sub-contractors who in large part have chased away American tradesman with illegal immigrants.

Illegals are not just in the tomato fields anymore. Contractors with no scruples hire them for anything from carpentry drywall to tile and landscaping. If we pay someone a half or even a third of what a skilled American tradesman makes, we get a lot less than we pay for. That's the true reason for delays and lack of quality control.

I applied with a national home builder several years ago to be a superintendent and was told bluntly by its local president of operations that my hands-on approach to quality control was inconsistent with company policy, but rather I would be expected to keep a shirt and tie in my truck to be accessible at all times to home buyers of up to 20 homes under construction. I would not prostitute my morals for the bottom line and was denied the position.

A couple of years later, the company I applied to had several lawsuits because of rot, mold and mildew in one of its large Sarasota subdivisions.

I suggest home buyers contact the Florida attorney general or other legal authorities for audits and immigration violations.
Robert V. White

December 8, 2005
Contractors board: Ineffective, many say

I was encouraged to see Jeff Manning's article in The Sunday Oregonian ("Licensed, bonded and unaccountable").

I have been a construction attorney for more than 21 years. I represented the Haynes family in its case against Adair Homes [see "Sandy family wins mold lawsuit," March 8].

The Construction Contractors Board is worthless. Oregon consumers deserve to have their concerns taken seriously. There are many things wrong with the current system.

For example, in many cases, incompetent builders (usually small-timers) construct homes with the long-term goal of selling them to consumers. They move into the house for a few months to circumvent the home-warranty law applicable to new construction. Then they sell the house to a consumer and move into the next one they just completed. This loophole must be plugged.

In many more cases, these builders construct homes in the winter rains and do not dry them sufficiently before installing sheetrock, insulation and finish materials. These buildings become self-composting houses that make their occupants ill from mold exposure.
See more Oregonian Letters to the Editor: Contractors board: Ineffective, many say
August 26, 2005

Contemplating a Tremont Tower Condo
I went to look at this place a while ago before I read posts and articles. First off, the service sucked ....
I visited four times before someone was actually there, in the office, to show the place. The first time I waited two hours after lunch. The security guy called all the people's cellphones and left messages on every one, not one returned his call and not one showed up. I wish I could take 3 hour lunch breaks. Each visit was at a different time on a different day (1pm, 10am, 6pm, 4pm), and each time the only person there was the security guard. He finally felt sorry for me and showed the units himself. While I was undeterred by the lack of attention (and callbacks), the actual building ended any interest in buying a Tremont condo.
One word: BIZZARE! The lack of furniture and people was a little unnerving. It seemed very... unfinished, like they'd just opened. The 3rd floor, 3 story atrium caught my eye as being unique, but then the feeling changed to a little creepy. It had odd angles and protrusions that made it look a little bit like the outside edge of a beehive. The first condo I was shown was down a narrow hallway that opened onto the atrium on one side (kinda like a motel), but instead of nice metal railing or glass, it was a solid half-wall. The other side was condos, but there were no windows, artwork, plants, anything. Just a wall.
The condo was at the very end of the walkway, and again, bizzare. The front door opened onto a two story foyer with a media room (which was, for some reason, almost completely round) and stairway on the right, the dining room (it had dining room furniture in it) straight ahead, and a bathroom on the left. The odd thing was that the kitchen was on the second floor, almost as an afterthought, immediately on the right after going up the stairs. There was a short hallway, still open on the left side to the downstairs area, and then the living room with a bedroom off each side. The living room was also open to the foyer below, and you could see the kitchen on the opposite side of the hole, but to talk to anyone in there, you'd have had to walk back down the hall. Even though the security guard assured us no one had lived in the unit yet, strangely, the carpets throughout the condo were filthy, there were indentions where heavy furniture had sat for a decent period of time, and the looks of repair work in progress.
The second was a two bedroom, loft style condo. Upon walking through the front door you went up a stairway to the right. At the top was a room. There were no closets, no shelves, and no plugins or jacks of any kind. This was the "2nd bedroom". Where does the "loft style" come in? At the end opposite the stairs was a 14" tall by 4' long hole (about 5' from the floor) in the wall that looked down into the living area... assuming you could squeeze your head through the opening. Back downstairs the master suite was below the loft area with a private bathroom. Private? Oh, wait, no. It was the ONLY bathroom in the entire condo. So your guests would have to walk through your bedroom every time they needed to use the restroom. The only redeeming quality was that the unit was on the same level as the pool, and thus the patio doors opened out to the pool area... DAMMIT. Wrong again there. For some strange reason, instead of having direct access, there was a 4' tall fence (i can't remember but I think it was chain link) around your "patio" area. Because on the 3rd floor of a secure, private condo development, you need a 4' tall fence to deter would-be criminals from breaking out your giant wall of glass and stealing your tv.
Flat out, Tremont Tower is a joke. From the strange shape and coloring outside and the strange shape and coloring of the 3rd story atrium inside to the nutjob floorplans, that place looks like Krusty the Klown built it.
Did I mention the guest lobby feels like its got 8' ceilings?

July 2, 2005 Response to Contemplating a Tremont Tower Condo AFFORDABLE HOUSING FOR WHOM?
On 8-23-05 there was an article in the Hobbs News-Sun about a planned subdivision for 36 new homes in Hobbs ranging in price from $125-175,000.00 which former Hobbsan Ken Autry plans to build in partnership with Hobbs Developer Bill Pevey.
It is more than just of passing interest that Bill Pevey said that there is a need for "affordable" homes in Hobbs Hobbs According to information obtained from the City Data web site the median income in Hobbs Hobbs earn more than $28,100.00 per year and 50% of the people earn less than $28,100.00 per year. is only $28,100.00 per year which means that 50% of the people in but I dare say that houses costing $125-$175K stretches the meaning of the word "affordable" beyond imagination.
. Indeed, there is a desperate need for AFFORDABLE homes in People with a steady 40 hour per week job at $6.00 per hour make $12,480.00 per year. $8.00 per hour equals $16,600.00 per year. $10.00 per hour equals $20,800.00 per year and it takes $13.51 per hour to earn the median income of $28,100.00 per year.
A person with the median income of $28,100.00 can only qualify for a $24,204.00 mortgage at 6% interest with $2,000.00 down and it requires $9,813.00 down for a person making $60,000.00 per year ($30.00 per hour which is over 2 times the median income) to buy a $125K house so I ask you, Mr. Pevey, "affordable housing" for whom?
A person with only an $8.00 per hour job and $16,656.00 per year income (about 1/2 the median income) could qualify to buy a $125K house with an interest free home mortgage with $0.00 down and monthly payments of only $347.22 per month.
If these numbers are hard for you to understand read them over and over until you do understand them. I have spent my whole life fighting for interest free home mortgages. There is a heated battle going on in City Hall right now between "them" and "us" and it's all over money. It is interesting, don't you think, that Abraham Lincoln was assassinated because he wanted to print interest free, debt free, and tax free money.
Why won't President Bush use interest free, debt free, and tax free money to fund the United States Interest Free Home Mortgage Corporation at
Lee Cheney
Hobbs, NM

July 2, 2005
Just last week an entire construction crew was in the common hallways repairing 1" cracks in the ceiling. Looks like their patching some type of structural damage... every week it appears an earthquake struck with fault lines in the building - then send they send the construction crew to patch it up until the next time it cracks.

The unit you visited was going for $895,000 last time I checked...expensive 1 bathroom home if you ask me.

What's funny is if you look at the preconstruction marketing...the building is nothing like they advertised. The marble floor turned to cheap carpet, the grand piano turned into a fake palm tree, the charming sales staff vanished. It's like the story of Cinderella.. once complete, the clock struck midnight and Tremont turned to a pumpkin (actually jack-o-lantern because it beams light from it at night). For three years while it was under construction they had a full time sales staff...why not now? Hard to sell a pumpkin, or lemon for that matter.

Author unknown

June 3, 2005 To the Editor:
Having lived in five different states, in the past 30 years, I have never seen as much disrespect shown to it's residents, as is shown to homeowners, by their legislators in this one!
Shame on you Texas! Protecting homebuilders, who have the gaul to get what they want by paying for a State run agency!

Shame on you Texas for letting these builders "stick it" to the hard working tax payers of this state who scrimp and save to just become homeowners, only to have their rights taken away and given to wealthy companies, who hide behind agencies such as the TRCC!
Shame on you Texas, for regulating homeowner's rights, instead of regulating homebuilders with licensure requirements and accountability!
Shame on you! You had a perfect opportunity to do right by Texans with HB3404, which would have reformed the Texas Residential Construction Commission, in this last legislation session, and yet, you killed it in committee. Once again proving that you work for wealthy homebuilders instead of the very people who built you! Shame on you Texas!
Natalie Shanks Round Rock, Texas
By Lance Etheridge



Have undisclosed builder defects in your new home?
Who cares?
Builder refuses to repair?
Who cares?
Is this not Real Estate fraud?
Who cares?
Does your insurance company deny your claim?
Who cares?
District attorney tells you that real estate fraud is a civil matter not criminal.
Who cares?
Cannot live in your house anymore because of defects?
Who cares?
The builder has been doing this all over town?
Who cares?
The builder, after being fired by the city, is still building defective housing?
Who cares?
Builder is then appointed to Harris county building authority in direct conflict of interest?
Who cares?
Tax assessor devaluing homes built by this company?
Who cares?
Does the mayor and city council know about the builder?
Who cares?
The City of Houston is still issuing construction permits?
Who cares?
Everyone says get a lawyer?
Who cares?
Cannot sue a builder in Texas because of Texas torte reform forcing arbitration?
Who cares?
Arbitration Company gets all its business from same builder?
Who cares?
Arbitrators never rule against the builder?
Who cares?
Home owners stuck with gag order after arbitration?
Who cares?
Why is the public not informed about this builder?
Who cares?
TV stations refuse to follow the story?
Who cares?
Newspapers do not want to publish information because builder is a big advertiser?
Who cares?
Where are the agencies that protect consumers from deceptive trade practices?
Who cares?
The Attorney General does not investigate because he says there is not enough money involved.
Who cares?
State legislature, which passed the torte reform, still receiving major campaign contributions from builders?
Who cares?
When you can’t stand it anymore and begin to protest on the street, the builder gets the police to harass you.
Who cares?
They send out tow trucks to tow your car while you are still in it?
Who cares?
When you declare bankruptcy because you cannot afford to live in your defective house and pay rent on an apartment?
Who cares?
Welcome to the Great state of Texas where no one cares !

Lance in Houston

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