How to Prevent New Home Defects
Buyers should take care that they're not purchasing an inferior-quality house
June Fletcher, The Wall Street Journal
As the downturn deepens, many would-be homeowners are taking advantage of down payment and closing cost assistance, free finished basements and other incentives offered by builders eager to move their merchandise.
But buyers should take care that they're not purchasing an inferior-quality house.
For the month of August, the producer price index for construction materials rose 13% over the same period a year earlier, according to the Bureau of Labor Statistics. As costs rise, some builders cut corners. The Consumer Federation of America says construction tops its list of the five fastest-growing complaint categories.
Bruce Barker, a Phoenix home inspector, says almost all the new houses he sees have minimum-quality windows, and about three-quarters have inadequate loose fill or fiberglass insulation; other houses he's inspected have brand-name condensers on the exterior of the home, where buyers can see them, connected to generic furnaces hidden in the attic. Steve Showalter, a Graysonville, Md. inspector, says builders have stopped using plywood sheathing and instead use oriented strand board, which can swell with moisture unless it's installed correctly—and it rarely is, he says. Rob Ringen, a Sonora, Calif. home inspector, estimates that 80% of the repair work that new home owners have to do today can be traced directly to poor-quality materials like twisted and split framing, and short-cuts on installation, like missing flashing over windows that allows rain to leak in. And since building code inspectors are being laid off in the downturn, and remaining ones overworked, such problems often slip by. "Homeowners get it right in the neck," says Mr. Ringen.
Since new home contracts often have binding arbitration clauses, many disgruntled buyers can't sue—although some have taken creative steps to embarrass builders they think have cheated them. Cynthia and John Daugherty posed as orange-jumpsuited "prisoners" on the Web site they made about their Pulte-built Kansas home, listing complaints about bad foundation walls and bouncy floors. Crapconstruction.com, with a logo of a home swirling down the toilet, was created for Beazer Home buyers complaining about buckling hardwood floors, chipped tiles and cracked caulk.
Although builders have been known to sue or buy out people who start complaint sites, it's far less stressful to prevent such problems in the first place. While visiting the house often during the construction period can uncover some problems, most homeowners don't have the expertise to check for every defect in construction and materials. That's why it's essential to turn to professionals to look after your interests. Before you sign a contract, have your attorney read it to make sure your rights to legal redress for defects are protected. Before you close, make sure to hire a home inspector, preferably one with an engineering background, to ensure that no one took any shortcuts.
Also, take time to read and understand whatever warranties the builder offers. The warranty will likely exclude certain items like appliances and cracks from normal settling of the house, and may limit the amount of time you have to file a claim for damages or defects. This time period may be shorter than the time state law provides for filing a lawsuit under the principle of "implied warranty," so the builder may demand that you sign a paper waiving these rights. This is in the builder's interest, but not yours. Don't do it.
Write to June Fletcher at email@example.com