'Lemon' law sought for home buyers
'Lemon' law sought for home buyers
By Walter V. Robinson and Michael Rezendes, Globe Staff, 5/5/2001
n a proposal that could lead to a national precedent, the state's top consumer official said yesterday that new home buyers should have the same protections the Massachusetts ''lemon'' law provides for new car buyers, who can get their money back if serious flaws go unrepaired.
Meanwhile, Attorney General Thomas F. Reilly said his office would take legal action if evidence surfaces that home builders have engaged in patterns of illegal behavior in the sales or construction of new homes.
Reilly and Jennifer Davis Carey, secretary of the state's Office of Consumer Affairs and Business Regulation, were reacting to this week's Boston Globe Spotlight series on shoddy home building. They urged buyers who have been unable to resolve differences with builders - a common complaint documented by the series - to contact their offices.
''This is an area where we need to do two things: provide better consumer education and also some stronger consumer protections,'' Davis Carey said in an interview. She said her office was reviewing prospective legislation for buyers of new homes that would be similar to lemon law protections for car buyers.
Home buyer advocates said that a home lemon law under consideration by the Texas Legislature is the only such proposal in the nation, and that no state has approved a law giving new home buyers the same protections as those enjoyed by car buyers.
The Globe series focused principally on Pennsylvania-based Toll Brothers, which has built 1,200 homes in Massachusetts and is the nation's largest builder of luxury homes. Despite Toll's quality claims, the series found numerous cases in which the company misled buyers, used second-grade materials, and took construction shortcuts.
Moreover, in some subdivisions, most notably in one that Toll is building in Hopkinton, the Globe found many instances in which the firm violated minimum standards of the state building code. The result: many homes with worrisome defects, and numerous complaints that Toll sidesteps its responsibility to correct the defects once it has the buyers' closing checks in hand.
Since Sunday, in response to invitations to comment, the Spotlight Team has received just over 500 phone calls and e-mails, the vast majority from home buyers, pointing to poor quality construction by Toll and other builders. The respondents also complained that neither state nor local governments seem to be aware of the problem or willing to help.
Yesterday, Toll Brothers purchased a two-page ad in the Globe asserting that the company's buyers are overwhelmingly happy with their homes. The advertisements included testimonials from 11 home buyers in Massachusetts and Connecticut who signed their first names and the first initial of their last name.
Also in the ad was a letter from a real estate firm praising Toll, and two letters critical of the Globe series - one unsigned. In the signed letter, a buyer of a Toll home wrote, ''Whether the issues outlined in the stories are factually correct or not is not the issue.'' Instead, he complained, the Globe did not give ''equal time'' to satisfied buyers. The same two-page ad is scheduled to run again tomorrow.
Before the series ran, Toll officials canceled an interview, and responded to questions only in writing, in some cases sidestepping questions and in others providing inaccurate answers. This week, the Hopkinton building inspector has chastised Toll for violating the building code.
Earlier this week, Toll's chairman, Robert I. Toll, issued a statement saying that the company believes the reports in the Globe, and on WBZ-TV (Channel 4), were ''false, incomplete, and riddled with distortions.'' But the company, despite requests from the Globe, has not cited any examples.
On Thursday, Reilly's office posted tips for new home buyers on its Web site.
The series, Reilly said, ''certainly caused us to pay attention.... It was a very valuable public service. It uncovered a problem not just here in Massachusetts - and obviously it is a problem here - but a national problem with national home building firms.''
Reilly's office has moved against home remodeling companies after finding a pattern of behavior that suggested the questionable actions of some firms are pervasive and violate state laws. Yet, while his office is upgrading its capacity to track patterns in consumer complaints, Reilly said there has been no evident pattern of illegal activity by builders.
''We have not yet found these patterns in home building, maybe because the issue has not had the public attention the Globe series has now given it,'' Reilly said.
Over the last several months, some irate home buyers interviewed by the Spotlight Team said they had been unaware that the state's top prosecutor can move legally against builders when there is a pattern of misconduct.
Reilly said buyers need to take an all-important first step to avoid getting a lemon of a house: No prospective buyer, he said, should sign a purchase and sales agreement without consulting a lawyer. Many subsequent problems that occur, Reilly added, can be avoided when a good lawyer helps build protections for the buyer.
The state's broadly drawn state consumer protection law makes it illegal to mislead, deceive or misrepresent material terms of a contract or a sale to any consumer. Reilly's office can seek penalties of up to $5,000 per violation. And courts can award consumers double or triple damages if the violation is found to be deliberate.
Davis Carey said her office is ''looking at a proposal for legislation that would parallel our auto lemon law and the protections in place for consumers in the home improvement process.''
The lemon law covers new and used cars, and requires manufacturers of new cars, and dealers of used cars, to buy back defective vehicles after three attempts at repairs for a single defect, or after an owner has lost use of the car due to repairs for a specified number of business days.
Under a separate law protecting homeowners from unscrupulous home improvement companies, homeowners can collect up to $10,000 in damages from a state ''guarantee fund'' if they prevail in state-approved arbitration or win lawsuits and are not paid by the home improvement firms. The fund is maintained by licensing fees for home impovement firms.
Paul Sullivan, president of the Builders Association of Greater Boston, said the organization believes providing more education for new home buyers and builders would be preferable to the approval of a home lemon law. ''The vast majority of builders are building very high quality homes,'' he said. This story ran on page A01 of the Boston Globe on 5/5/2001.