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NCPIRG - Homeowners' Rights - Tips for homeowners and homebuyers
Monday, 03 July 2006

Homeowners' Rights

Recommendations for Homebuyers

There are a few simple things that a homebuyer can do to ensure that they buy a well-built home and are in a position to protect their investment.

1. Research the builder. Homebuyers should check with the Licensing Board for General Contractors and the local Better Business Bureau for outstanding complaints or other problems. Consumers should also talk to friends, family, neighbors, and others that have had experiences with certain builders.

2. Be on the building site. Consumers that have hired a builder to construct a custom home should be on site as much as possible to keep an eye out for potential problems.

3. Ask questions. Homebuyers should feel free to ask questions if something does not look right.

4. Don’t be an ATM. If a contractor is constructing a new home or doing repairs on an existing home, consumers should be suspicious of unexpected or excessive requests for additional money or money that isn’t due until work is completed.

5. Consumers should have new homes inspected twice before closing. Too often buyers of new homes assume that their home is free from serious defects simply because it is new. Homebuyers should have their new home inspected once before the builder fills in the walls with sheetrock, so that all plumbing, electrical, and framing issues are completed but visible. Consumers should have their home inspected again before closing while they still have leverage with the contractor.

6. Hire a real estate attorney. Someone with legal expertise should go over all contracts with a fine toothcomb to ensure that no legal rights are waived. Two specific and common features consumers should avoid:
a. Binding arbitration
b. “Insurance warranties”

7. Consumers who are concerned about whether or not they can afford a home inspection and a real estate attorney should think twice about whether or not they can afford a new home.

Recommendations for Victims of Defective Building

Every situation is different, and calls for a different solution. These principles should serve as a guide for consumers looking to fix their defective homes.

1. Get all correspondence in writing. This will help to prevent builders and contractors from reneging on previous commitments. It will also provide valuable evidence if legal action is necessary.

2. Be persistent. Sometimes it takes consistent pressure to get results.

3. Consumers should hire their own inspectors and engineers. Often contractors will send out their own engineers and inspectors to examine building defects; it’s important to keep in mind that they are working to save the contractor money and time and aren’t looking out for the best interests of consumers.

4. Contact the Attorney General’s consumer protection division and the local Better Business Bureau. They may be able to help resolve the complaint, and both can provide valuable information for future homebuyers.

5. Consumers should contact their state representative. Legislators are often in a position to convince builders to correct their mistakes.

6. Contact an attorney. Depending on the situation, the consumer may or may not have a legal case against the builder. By consulting an attorney, consumers can decide whether or not to take legal action.

7. Resist binding arbitration. Binding arbitration invariably benefits the builder. Consumers should avoid it if at all possible.

Overview |  Fact Sheet |



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