By Luke Stangel CONTRA COSTA TIMES
08/08/2007
Take a walk through any new housing subdivision and start knocking on doors. Construction defects aren't hard to find.
One man has a crack in his foundation that the builder refuses to fix -- because the crack isn't big enough yet. Down the street, a father of seven is packing up and moving out because he says mold is taking over the family's two-year-old house.
In a subdivision two cities away, a woman gave up trying to get her builder to replace a poorly installed granite countertop. A few doors away, another woman worries about a hollow sound under her hardwood floor.
Experts estimate that the average new house will exhibit three to 14 construction defects. Some builders have a reputation for standing behind their work and quickly fixing problems, whereas others drag out repairs.
No one keeps a comprehensive public record of construction defects or the building industry's response to them, making it difficult for the average home buyer to research a builder's track record of quality and customer service.
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Arbitration clauses in many housing contracts prevent unhappy home buyers from suing in open court, further shielding builders from public scrutiny. Although consumer research groups regularly publish reports on cars, airlines, stock brokerages and toothpaste, only one -- J.D. Power and Associates -- studies builders.
"They always say home buyers should do their research," said Nancy Seats, president of the grass-roots Homeowners Against Deficient Dwellings. "But home builders have set it up so that it's darn hard to do any research."
Seats is part of a small group of housing advocates that pushes states to require builders to disclose more information to the public about construction defects. The loosely connected coalition of activists is also lobbying for "lemon laws" that would require builders to buy back defective homes.
Neither idea has gained much traction nationally.
Officials with the National Association of Home Builders say states are doing a good job protecting consumers from irresponsible builders. They reject calls from activists for more industry scrutiny.
In a 2004 study by Harvard researchers, nearly 90 percent of new homeowners said they were happy with their purchase and would recommend their builder to a friend, said National Association of Home Builders spokeswoman Donna Reichele.
Researchers at J.D. Power and Associates agree.
"The vast majority of homeowners are satisfied with their home," said Paula Sonkin, vice president of real estate and construction industries at J.D. Power and Associates. "Less than 5 percent -- a lot less than 5 percent -- are really unhappy overall. Most homeowners skew positively -- most homeowners are really satisfied with their home builder."
"It's a big investment, the biggest investment you're going to make," said Gene O'Neil, president of the Better Business Bureau's Golden Gate division. "You can't be too careful."
Experts encourage those in the market for a new home to do five things when choosing a builder: read the J.D. Power survey of major builders, check with state and Better Business Bureau records for open construction-defect complaints, check for any quality-control certificates the builder holds, research the builder's history of lawsuits and ask other people how they feel about the builder.
No single tool is perfect. But experts say home buyers who use these tools together should get a fairly accurate picture of a builder's track record.
This year's J.D. Power and Associates survey of builders will come out Sept. 12 and cover the biggest residential builders in the country's 34 top housing markets.
In the Bay Area last year, J.D. Power chose more than 1,600 people at random to answer questions about the area's 16 biggest home builders. The results show a range of builder quality locally.
The area's top-rated builder, Centex, scored 147 points of a possible score of 160. The area's worst-rated builder, Seeno, scored an 84.
Seats questions the effectiveness of the J.D. Power builders survey. She said getting the survey in the mail is like getting a golden ticket -- as soon as builders figure out who was sent the survey, they will bend over backward to please that select group of customers.
In California, the Contractor's State License Board serves as a mediator between the building industry and buyers. In the most recent fiscal year, the board received about 21,700 complaints, but fewer than 2 percent of those were filed against new-home builders, said Contractor's State License Board spokeswoman Melanie Bedwell.
The Better Business Bureau last year also received a low number of complaints about new houses, records show.
The Better Business Bureau's Golden Gate division, which covers 13 Northern California counties, received about 18,600 complaints in 2006, with 39 against new-home builders.
Builders, for the most part, fix construction defects quickly and in private. The National Association of Home Builders says its members fix more than two-thirds of construction defects within a week of learning of them.
But those numbers aren't made public. Anecdotally, some residents say they've waited months to get simple things fixed.
Pete Westlund, 57, bought his Brentwood tract home a little more than a year ago and said it's been an uphill battle since to get the builder to fix the construction defects in his house.
He paid $270 this summer to get his air conditioner fixed, and he's had to badger the builder into fixing cracks in his stucco. The builder refuses to do anything about the cracks in Westlund's downstairs floor because he had the floor remodeled by an outside contractor.
"It's exasperating to me as a homeowner, always having to apologize to my family and friends and neighbors and clients about my new home that has so many flukes in it," Westlund said. "They give you lip service and say they'll fix the problem ... but after they leave, it's a totally different story, unfortunately."
Two years ago, the National Association of Home Builders Research Center launched a program meant to test and certify builders who comply with industry-leading standards of quality.
To date, 50 builders nationally have received quality certification from the research center.
"It doesn't take much for someone in a lot of areas of the country to call themselves a builder, and even less for someone to call themselves a quality builder," said the program's director, Frank Alexander, who argued for the necessity of the certification in today's market. "The term gets thrown around a lot."
In Texas, the state's Residential Construction Commission launched the Star Builder Program, which is designed to recognize the state's best builders.
In California, legislators passed a law in 2002 that put a state-mandated timeline in place for builders to deal with construction defects.
It requires homeowners to send their builder a detailed description of the construction defect and await a response. Builders must respond within 14 days, inspect within another 14 days, and write a letter to the homeowner describing a solution within an additional 30 days. Follow-up inspections can draw this process out by an additional month and a half.
Similar laws exist in 29 states, said Janet Ahmad, president of the nonprofit HomeOwners for Better Building.
Going to court is the final option for homeowners who are unhappy with the builder's solution -- but some homeowners quickly find that the arbitration clauses in their housing contracts bar them from lawsuits.
Arbitration decisions are never made public, although one state hopes that will change. In 2005, the Texas Residential Construction Commission's arbitration subcommittee recommended that the state make arbitration settlements public record, just like civil lawsuits.
The last -- and some say best -- tool home buyers have is to walk around the subdivision where they're thinking of buying to ask residents whether they would recommend the builder or buy from it again.
Although it's not the most mathematical way to make what often amounts to a family's biggest investment decision, homeowners will often talk candidly about their experiences with their home.
Some homeowners are more proactive, putting signs and banners outside their houses warning buyers to turn around and choose a better builder.
Jeff Browne is one such homeowner.
The 36-year-old father of seven is moving out of his Brentwood home because he's convinced water is seeping through his foundation, slowly eating the house from the inside out with toxic mold. He says tests he commissioned indicate his house could have been built over a near-surface water source, such as an abandoned septic tank, agricultural pond or underground spring.
Browne's builder rejects that claim.
Outside Browne's eight-bedroom mansion, he put up a white vinyl banner describing his legal wrangling with the developer over the repairs to his $800,000 house.
"We just want our dream home repaired," he said.
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