How to Avoid Problems with New Home Construction in Austin

The article below is in this morning’s Austin Statesman. It outlines the frustration some new home owners are having in a subdivision in Hutto, with their less-than-one-year-old homes. The problem in this case, stems from the use of prefab roof trusses. But there are a couple of other issues which I am reminded of, and of which I believe every new home buyer should be aware.

First, ALWAYS, ALWAYS have your new home inspected by your own third party inspector.
I wrote about this in an August 2005 blog article. Hire a good inspector and have it inspected at the three major phases of completion. If you are buying a completed new home, have a regular inspection performed as you would any other home.

Second, don’t trust the Texas Residential Contruction Commission process to bring remedy to any probelms you may have.
I personally cancelled a project with a builder last month because the builder, among other things, wanted the warranty and mediation process, should it be needed, to be entirely controlled by the TRCC process and refused to change the language in the construction contract to accomodate my concerns. I said “no way” and we walked. For more information about the consumer rippoff that is the so-called consumer TRCC consumer protection laws, read this article.

Finally, don’t buy cheap starter homes in outskirt areas of Austin. I say this over and over again in this blog and to buyers we deal with, mostly because I think those homes are poor investments. But it’s also the case that any product mass produced quickly, whether it’s a home or a car or anything else, is likely to have a higher percentage of problems. Be very careful purchasing mass produced homes built fast by cheap labor.

The article is below.

New homes create headaches for homeowners
Several homes in Williamson County have defects. Builder is making repairs, but homeowners say that’s not enough.

Monday, March 05, 2007

HUTTO — Problems with Sean Bourke’s new home started with what he calls “small stuff.” Pools of water gathered in the driveway. Chunks of limestone broke off the outside walls. Heat stopped flowing to the upstairs bedrooms.

New neighborhoods such as Bourke’s, the Legends of Hutto subdivision, are common in Hutto. In the past five years, 3,855 houses have sprouted in this city that was home to only 1,250 people seven years ago.

The street Bourke lives on is quiet and friendly, and many of the homes are barely a year old. But he’s had enough of the problems in his new home.

Now, he and his neighbors say their home builder, Lennar Corp., told them that the roofs of their homes were attached too tightly, not giving the walls room to settle. The drywall is cracking and will have to be replaced.

Lennar representatives in Texas and its home base of Florida did not return repeated calls for comment last week. Austin Division President James Giddens also did not return calls for comment.

Dan McDowell, Hutto’s chief building inspector, said he knows of several Lennar homes in the HuttoParke and Legends of Hutto subdivisions that have the same roof problem, which he called a cosmetic one.

He said the builders are doing everything possible to fix the problem.

“This isn’t an issue of the roof is going to cave in,” he said.

The problem stems from a prefabricated roof truss that is attached to a house’s walls with screws or nails, McDowell said. On these homes, he said, too many screws were used, and cracks formed in the drywall.

Homeowners in Legends of Hutto said they heard from Lennar that many of the company’s homes have the same problem, including in Taylor and Georgetown. Neither city has received complaints about the problem.

Eight homeowners in the Austin area have complained about Lennar to the Texas Residential Construction Commission since the agency was created in 2003.

When builders are not receptive to a homeowner’s complaint, the homeowner can go through the agency’s formal process, during which an independent inspector investigates problems.

Ten Lennar homeowners statewide have gone through the process since 2003. Inspectors found defects in eight of those cases; the builder fixed the problems.

In comparison, Newmark Homes had eight inspections in Texas, with seven finding defects, and Centex Homes had three inspections, all of which found defects.

Patrick Fortner, director of communications and legislative affairs at the Texas Residential Construction Commission, said it sounds like Lennar is being proactive in agreeing to fix the problem to prevent further damage down the road.

“I think that’s good customer service,” he said.

Lennar has a good customer satisfaction rating compared with other builders, said Dale Haines, senior director of real estate and construction practice for J.D. Power and Associates.

Lennar was ranked slightly below average in the J.D. Power and Associates 2006 New-Home Builder Customer Satisfaction Study of the Austin market, but, Haines said, “That’s a little bit deceiving, because the (Austin) market performs so well.”

Homeowners in Austin are more satisfied with their home builders than others in the nation, according to the study, and Lennar’s Austin-area ranking is above the national average in consumer satisfaction.

Lennar entered the Texas market in 1991. The company’s 2006 annual report said it uses a small labor force to design and build houses and uses subcontractors for “virtually all work involved in the construction of the homes.”

Lennar built about 50,000 homes nationwide in 2006.

Bourke and some of his neighbors refused Lennar’s first offer to fix their homes because, he said, they have not received anything in writing that details the problem or whether the work will be under warranty.

Based on previous problems with the home — the concrete on the driveway had to be poured several times until it was done correctly — he’s not confident this defect will be resolved.

“First they said it was the foundation, second defective trusses, and now it’s only cosmetic,” said Bourke’s girlfriend, Conny Thibodeaux.

Bourke’s neighbor Eva Marie Cole and her sons stayed in a hotel for a week while repairs were made to their home. She said she had to hound the company to pay for the hotel upfront.

“One customer care lady won’t return my phone calls because I yelled at her so bad,” Cole said.

Janet Ahmad, the president of HomeOwners for Better Building, a homeowner’s advocacy group based in San Antonio, said her organization is working with other consumer advocacy groups to get a home lemon law, similar to those that protect people when they unknowingly buy a defective car, passed in the Legislature this session.

Homeowners are “entitled to a home that’s going to last,” Ahmad said. “Believe me, this happens every day. The homeowners have to fight for everything they can get.”

Posted by Steve
9 years ago

Steve is a Real Estate Blogger, Husband and Dad, UT Austin Grad, Runner, Real Estate Broker and owner of Crossland Team and Crossland Real Estate in Austin TX.

Click Here to Leave a Comment Below

Mare - 9 years ago

First, ALWAYS, ALWAYS have your new home inspected by your own third party inspector.

AMEN!!! Our home is 7 years old, and we just started having problems with the shingles. In filling out the warranty paperwork, I went through all the contracts my husband signed. He WAIVED the final inspection!!!!

Why? Because he was in a rush to get everything done. I don’t think he even realized he did that, because this is his first home. I don’t think people really stop to read what they’re signing – or have a thorough understanding of the contracts. My husband is a reasonably intelligent guy, but he had no real estate ‘experience’ when he bought this house, and those are the folks that need representation the most.

Second, don’t trust the Texas Residential Contruction Commission process to bring remedy to any probelms you may have.

I’ve noticed the ads on the radio lately, and wondered about this. Thank you for including your link – that answered some questions.

I would also like to ask you, what contracts did your builder use? It is my understanding that builders don’t typically use TREC promulgated forms – what about TAR forms? As a buyer, could I insist on the builder using those forms? And, what alternative were you trying to have included in the contract? I’ve heard of this sort of thing, and it fascinates me that a builder would rather lose a sale to avoid a liability than work with a buyer over a possible mediation issue.

Thank you for posting this. PLEASE keep preaching the third party inspector speech. It’s worth every penny, if they’re good. Also, thank you for taking the time to answer my questions – I appreciate your patience with me!

saritha - 9 years ago

I gone through the above article that you have given information about how to maintain home and about remodeling the home building we can help you by keeping aware from frauds by home.

Nishi - 9 years ago

Steve, people now use your blog for marketing their own websites:) Isn’t that a good sign? Dunno who in their right mind would want to read an article about “keeping aware from frauds by home”, but your blog is becoming popular.

Steve - 9 years ago

Hi Nishi,

That one slipped by my spam filter. My blog comment spam blocker has caught 26K spams comments since I installed it about a year ago. It’s pretty accurate, but sometimes a non-spam comment gets caught and sometimes real spam get’s through. There are blog spam robots that just go around the internet filling in comment forms on every blog they can find.

scammed - 9 years ago

Don’t think for one minute the problems you are talking about are confined to cheap starter homes. So many of these builders use the same sub-cont. There a enough problems to go around with some of the steeper priced homes as well.
Do yourself a favor and go to the hobb website. that should be education enough for you. even with a private third party inspector you still do not know what may “pop” up. I speak from experience,

Melinda - 9 years ago

I too am going through the above problem, I want to be compensated at the time I am expected to be out of my home, not reimbursed. There are no hotels in Hutto, so I will have to do some traveling and I never expected to be going through all of this after only being in my NEW home less than a year. So now my family and I will be out of our home for a week and I guess expected to eat fast food…..

Mike - 9 years ago

Seems like all of the new residents in Hutto are going through the same problems. I also have not been in my home for a year and they want to put me in a motel with $15 a day for food.
What kind of compensation in that? You can see pics of my home in the huttoparke area of the forum at that will be growing every day. I have defects from the trusses to driveway to ceiling to electrical. They are repairing almost everyones house on my street by guttting it. My neighbors have been out of their house for 2 weeks now. They are getting nothing but 100 a day for a hotel and $15 a day for food. I can bet that they wont be getting a check for a long time seeing how they did not make them pay upfront.

Come by and post up some issues your having. Im sure we would all love to see everyone posting what kind of craftsmanship is going on out here.

Mike - 9 years ago

My brother, a disabled vet, bought a Lennar home in Jarrell less than six months ago and is having some of the same problems. Cracks in the sheetrock on the ceiling and the rock on the side of the home is falling apart. He contacted Lennar in person and they sent an inspector to his home and the guy told him that they would fix the roof trusses and the sheetrock but that they have been exempted from the problem with the rock. They called it spalding and that it is an act of God and that he may be able to file a claim on his homeowners insurance. My brother told me the guy stood in his front yard and laughed about the rock problem. The inspector told my brother that this is something that happens every ten years or so. My brother was not told about this when he bought the home so there should be a disclosure issue here. He was told that the repairs would not take place until late June. My brother is at a complete loss.

Diana - 9 years ago

I have moved out of my home as of 4/2/07 for 10 days. i am extremely unhappy with Lennar and I have warned all of my co workers at the large company that I work with about Lennar. I feel that we should be compensated for having to leave our homes with a back yard to go to a hotel room with 2 double beds. I have sent a letter to Lennar to request that they pay my house note for the month since I won’t be living there and I request for them to pay for the hours I have to be away from work to unpack my home and to watch the movers take my furniture. I will keep yall poste on the outcome.

Steve - 9 years ago

It’s really sad to hear about all these problems with Lennar Homes in Hutto and elsewhere. It does drive home the point that it is imparative to have a third party inspection throughout the construction process, and a clear path for recourse.
Keep us posted.

mike - 8 years ago

There is a website dedicated solely to Lennar and the Hutto issues here

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