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When Steven and Violet Peterson moved into a new, $375,000
house in a Monmouth County suburb seven years ago, they
thought they had found the home of their dreams.
But when serious defects were discovered in their house and
others in the 52-home development, Manalapan Chase, their
experience turned into a nightmare.
This week, the State Commission of Investigation will shine a
light on places like Manalapan Chase in an effort to drum up
support for stronger homeowner protections. In hearings
tomorrow and Wednesday in Trenton, the commission will hear
testimony from government officials, homeowners and
developers.
SCI officials said last week that a building boom in the 1990s
ushered in "widespread abuses" in construction practices and
code inspections.
"There will be some real eye-openers as to what developers do
and what they don't do," said the Rev. Francis Schiller, a
Roman Catholic priest and chairman of the SCI. "You'll see
proof at these hearings. It won't be just a parade of
homeowners; it will be well-documented deficiencies in
construction and infrastructure."
Developers and code-enforcement officials argue, however, that
the system is much sounder than the SCI acknowledges.
"Our experience in this state is that from the beginning of
the process, when we first set foot on a site until several
years later when the last maintenance bond is released, no one
cuts us an inch of slack," said Robert Fourniadis, a senior
vice president of Centex Homes, which five years ago bought
Calton Homes, the builder of Manalapan Chase.
Fourniadis conceded that work in the development had been done
by a "framer that wasn't very good," but he insisted Centex
worked ungrudgingly to correct defects. He said repairs on 49
of the 52 homes have been completed, with three outstanding
projects stalled in a disagreement with homeowners.
"Once these things were brought to our attention, we fixed
them," he said. "We did it without a fight. We did not force
the homeowners or the town to sue us. We didn't play the
'That's not us, that's Calton' game."
SCI officials said their ongoing 18-month investigation has
focused on a cross section of the state's major builders and
smaller, fly-by-night builders that disappeared after projects
were completed, leaving homeowners with little recourse. Their
investigation, which delved into at least four counties --
Essex, Monmouth, Ocean and Passaic -- also uncovered laziness,
incompetence and corruption in the code-enforcement system,
the officials said.
"We've got a lot of homeowners out there that the remedies
aren't working for," said Cary Edwards, an SCI commissioner
who served as attorney general under Gov. Tom Kean. "Whether
it's a shoddy builder, bad inspections or gross mistakes, the
homeowner winds up on the short end of the stick."
The SCI has subpoena power, but it cannot indict anyone.
Instead, it often refers investigatory material to prosecutors
or other agencies and recommends legislation.
One thing that intensified SCI concerns was an appellate
division ruling on Sept. 15 that held that builders can no
longer be issued code violation notices after a homeowner has
closed on the property. Some code enforcement officials have
interpreted that to mean violations should be issued to
homeowners.
William Dressel, executive director of the state League of
Municipalities, said the decision in the Somerset County case
outraged him. But, he said, code-enforcement, which is
enforced locally but overseen by the state Department of
Community Affairs, has been an effective defender of
homeowners.
"My knowledge of what DCA has done in regard to oversight and
regulatory enforcement is that it's been superb," he said. "My
only criticism, at time, is that they go too far."
No one can question, however, that some developments have been
plagued by problems.
Monmouth County Prosecutor John Kaye has investigated two
other developments built in the late 1990s -- Country Meadows
in Howell and Four Seasons at Wall -- focusing on code
enforcement officials and whether they did their job. An
investigation by state officials into Country Meadows found
that a plumbing inspector falsified reports and missed major
defects.
Edward Betz, a structural engineer from Cranbury who
documented construction flaws in Manalapan Chase, ranging from
rotted framing that overhung the foundation by inches to
poorly installed stucco that caused leaks, said such flaws are
common in new construction.
"The builders are in a rush," he said. "When a big guy puts up
300 homes, there is a big incentive to minimize materials and
labor. It's mass production."
As for code inspectors, he said, they too often don't
understand the code or are too lazy to do the inspections.
"They say, 'Joe is a good builder. Why should I climb all the
way up in the attic?' Laziness is the most prevalent thing."
Doug Fenichel, a spokesman for K. Hovnanian Companies, which
built both Country Meadows and Four Seasons, said large-scale
builders focus on efficiency, not volume or speed.
"Nothing is more inefficient than having to do major repair
work or rebuild a home," he said, adding that K. Hovnanian has
worked hard to correct "perceived and real problems" in the
Monmouth County developments and has created a department that
focuses on building quality.
"We know quality has a direct impact on our reputation," he
said. "It's expensive to keep backtracking and fixing things.
Getting it done right the first time has a direct
dollar-and-cents impact."
Steve Chambers covers land-use issues. He may be reached at
schambers@starledger.com or (973) 392-1674.
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