October 24, 2014

COVER STORY: Home Building

Cutting Corners

Some owners are paying the price for homes built in a hurry during the boom years.

Cynthia Barnett | 8/1/2007
Some owners are paying the price for homes built in a hurry during the boom years.

In addition to contractor abandonment cases, Florida is seeing a rash of construction defect and delay cases as the housing boom deflates, according to attorneys around the state. Consumer complaints against home builders to the state Department of Business and Professional Regulation have increased steadily in Florida over the past five years, from 1,545 in 2001 to 5,259 last year.


INSPECTOR'S GADGET:
“My reports used to be 20 to 30 pages long, but lately they’ve been hitting 50 to 60 pages,” says Orlando home inspector Richard Tan, who uses a thermal imaging camera to detect moisture and incorrect installations at home constructions.
[Photo: Jeffrey Camp]
Construction lawyers say those numbers represent just a fraction of lawsuits and other types of disputes statewide, particularly in south Florida. Stacy Bercun Bohm, a construction attorney with Akerman Senterfitt in Fort Lauderdale, cites the downturn in the housing market, increasing material and labor costs and the 2004-05 hurricanes as primary factors leading to defect and delay disputes.

Some cases may represent desperate attempts by condo investors to get out of preconstruction contracts by claiming substandard work. But many involve contractors who cut corners as costs boomed and the housing market began to wane. Between August 2004 and December 2005, construction and supply costs in Florida skyrocketed 30%, according to the Florida Home Builders Association.

Finding — or using — qualified workers was also an issue. “Because so much was going up so quickly, you had subcontractors on the job who didn’t have experience building a 30- or 40-story high-rise on the ocean,” says Bohm. “You had subcontractors here from other parts of the country getting in on the boom, but they had no experience with environmental factors such as salt air and the humidity here.”

Orlando home inspector Richard Tan says the situation is the same inland. Tan, a contractor, has carved a second business niche for himself over the past seven years by inspecting new homes for central Florida buyers. He tells story after story of substandard work by both custom luxury builders and cookie-cutter home building corporations. “My reports used to be 20 to 30 pages long, but lately they’ve been hitting 50 to 60 pages,” he says. “And these are brand-spanking-new homes.”

Tan says that many aspects of new-home building have improved — roofs, electrical systems and plumbing, for example. But the economics of the most recent boom-and-bust building cycle, he says, have resulted in more defects in jobs that require skilled craftsmen — like hanging windows or building stairs. “You need a truly skilled craftsman to build stairs, someone who can really think it out,” Tan says.

At the height of the boom, when there was not enough skilled labor for all the work, Tan says, some contractors used less qualified and in some cases unlicensed workers. He attributes the jump in mold litigation to inexperienced subcontractors and cheap materials. His reports often note improperly installed air ducts or windows, for example, and the use of low-quality sealants.

Home builders, meanwhile, counter that there is simply far more scrutiny of their work than ever before from home buyers. Home inspector Gregory D. Manning of Boca Raton, president of the Florida Association of Building Inspectors and a longtime contractor himself, says when he first got into the business no one had new homes inspected. Now, most buyers do. Manning feels strongly that “things go right much more often than they go wrong.” But he agrees the downturn forced many home builders to cut back — on everything from materials to labor.

Regardless of the quality of the company or the foreman on a particular job, he says, if the person installing the air-conditioning unit is poorly trained or doesn’t understand English, the consumer is likely to have problems down the road. He believes language barriers among supervisors and workers have become among the most significant factors in producing construction defects. “You have workers hooking the hot water to the cold faucet because it has a “C,” and “C” in Spanish is hot — caliente,” says Manning. “That’s just the most common of many things we see.”

Many builders have instituted quality-control programs in an effort to cut down on defect complaints. KB Home, for example, adopted the National Housing Quality Builder and Trade Contractor Certification program that focuses on “building it right the first time, every time.” Rick Carruthers, regional general manager for KB Home in Florida, says the program includes more-standard floor plans, training at all levels as well as quality standards for subcontractors — now called trade partners — that ensure consistency across jobs. The company takes customers on walk-through tours of the home at key points during construction, including a pre-drywall conference “to make sure everyone is on the same page,” Carruthers says.

Still, both home builders and the Florida Legislature have done more to cut off avenues to litigation. Some home builders include binding arbitration clauses in contracts to keep buyers from suing. And Florida’s construction defect law, FS 558, now makes consumers notify contractors in writing 60 days before filing a lawsuit detailing any alleged defects and giving them the opportunity to repair any problems. If the consumer accepts a repair offer, he or she loses the right to sue.

Steven B. Lesser of Fort Lauderdale, shareholder and chairman of Becker & Poliakoff’s statewide construction law practice, says this and other changes to FS 558 stack the law against the consumer. “It’s a lawyer’s relief act and an engineer’s relief act,” says Lesser, who is among a group working on proposed revisions to the law for the 2008 legislative session. “What it’s done is imposed so many duties and responsibilities that consumers have to rely on professionals to figure it out.”

Go to LinksLinks: For specifics on the National Quality Builder and Trade Contractor Certification program, go to the Links page.

Tags: North Central, Housing/Construction

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