November 28, 2014

COVER STORY: Home Building

Left in the Lurch

Florida has one of the highest foreclosure rates in the nation. But the downturn in the residential housing market has left plenty of other problems in its wake, including increasing numbers of construction defects.

Cynthia Barnett | 8/1/2007

The fallout from the downturn in Florida’s housing market: More than 21,000 new foreclosure cases in June alone — up 144% from a year earlier — and a skyrocketing number of complaints against home builders over construction defects. Meanwhile, home builders in financial trouble have simply abandoned hundreds of customers, many of whom end up paying twice. “Contractors and consumers had both better hold onto their chairs,” says one attorney.


NO RECOURSE
Great Bay Homes left about 60 families in limbo when it abruptly closed down in late 2005. Customers tried to get law enforcement officials to launch a criminal investigation, but police and prosecutors tend to treat abandonment cases as civil matters. “All I was left with was an empty lot,” says Andrew Wong (back left, wearing a white shirt).
[Photo: Jeffrey Camp]
A part-time real estate investor making a decent living off Florida’s housing boom, Andrew Wong figured there was no way he could lose when he decided to have a custom home built for himself on a lot he owned in Port St. Lucie.

In June 2004, he contracted with a company called Great Bay Homes to build his house for $255,375. He gave the company a $25,500 down payment, along with $10,000 more for upgrades. The next year, a land-clearing company showed up and cleared his lot. It was the only work that ever took place there.

At first, Great Bay representatives gave him excuse after excuse as to why they hadn’t started construction. Then, they quit returning his calls. In December 2005, Wong showed up at Great Bay’s office in Port St. Lucie. It was deserted. He told himself the office must have shut down for the Christmas holidays. But he knew better. “They kept stringing me along until they went belly-up,” Wong says. “All I was left with was an empty lot.”

And a $9,975 bill from the land-clearing company. Great Bay never paid the subcontractor, and under Florida law Wong was responsible for paying. He ended up as one of some 60 Great Bay Homes customers — ranging from families with young children to retirees who’d saved to build a home in Florida — whom Great Bay abandoned when it fell into financial trouble in late 2005.

Tags: North Central, Housing/Construction

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