Owners of water-plagued new homes look to state for resolution

[Guest guest]

Published Sunday, August 20, 2000

Owners of water-plagued new homes look to state for resolution

Youso and Donna Halvorsen / Star Tribune

A correction for this article was published Aug. 27, 2000, and reads as

follows: The home and legal specialty of Diamond was misidentified

in an article last Sunday. He is a Minnetonka litigation attorney.

In his casual summer attire, the bespectacled Mike Happ doesn't look like

the Lone Ranger. But for people in new homes afflicted with leaky walls,

that's the impression he creates.

Building inspector Mike Happ inspects rotting sheathing in Lester Temple's

3-year-old Eagan home.

Striding across blue tarp-covered front steps into an Eagan house, Happ

immediately takes charge. A state building investigator, he has just called

the builder of the three-year-old house on his cell phone and told him to

line up all his subcontractors and prepare for a meeting at the house. The

builder is " going through his Rolodex right now, you can count on it, " Happ

tells the homeowner,who looks relieved.

The Eagan home is among an ever-increasing number of water-plagued new homes

in the Twin Cities.

Because of the way houses are built, water can hide in the walls for years,

leading to health-threatening mold, rotting wood and expensive repairs. When

owners discover the problem, the shortcut to a resolution is to call Happ to

the scene.

Without him, many homeowners find that the things they thought would protect

them, such as homeowner insurance policies and home warranties, provide no

protection at all.

In Lester Temple's case in Eagan, his builder didn't respond to his

certified letters. His homeowner's insurance company turned him down flat. A

moisture-testing firm determined that his walls probably are water damaged.

That squared with Temple's discovery when he cut holes in walls and floors

and found the cavities wet and moldy.

Until Happ arrived, Temple said he was at a loss as to what should happen

next.

Standing in the dust and disarray of what was the formal dining room, Happ

tells Temple exactly what will happen. City records on the house will be

gathered, and he will invite everybody with a stake in Temple's house --

builder, subcontractors, engineers, inspectors, material suppliers and the

builder's insurance representatives -- to come together and walk through the

house.

" Sometimes it's a real circus with 30 to 35 people walking through, " Happ

warns, but explains that's what it takes to stop the finger pointing and

blame passing. With Happ jawboning, the parties will decide what the problem

is, how to solve it and who will do the work.

" Finally, there's somebody on my side, " Temple said.

Who pays?

Happ is running counter to a system that for years has enabled builders,

insurers and lawyers to narrowly interpret warranties. They say only houses

on the brink of collapse are covered under the 10-year warranty for major

construction defects. Water damage has not been included, even in homes that

require reconstruction of walls.

Happ's interpretation, which is broader and more consumer friendly, asserts

that any moisture that gets into the home is grounds for coverage. " You're

not supposed to have water in the walls, " he said, " because then it will

become a life/safety issue. "

" I appreciate that position, " said Diamond, a Minnetonka litigation

attorney, who represents homeowners and an occasional builder. " He told me

that, too, but there's absolutely no support [in law or rule] for it. "

Happ doesn't rely solely on his persuasive power when he's trying to resolve

disputes. He carries clout as an employee of the Minnesota Administration

Department's Division of Building Codes and Standards, which adopts the

state's building code.

" I hold no illusions why the [builders] call me back, " Happ said. " I'm the

state. " Happ's division has no enforcement authority, so he tries to forge a

compromise the parties can accept. But he's also in contact with the

Department of Commerce's Enforcement Division, which can censure and fine

builders and suspend or revoke contractor licenses.

As a former investigator for the Commerce Department, Happ is " very good at

communicating to them [builders] what the Department of Commerce can and

will do if they don't cooperate, " said Steve Hernick, assistant director of

the Building Codes and Standards Division.

The possibility of a $10,000 fine per code violation and the chance of

losing a license can be strong incentives for building contractors to

cooperate with the state, said Bruce Gordon, Department of Commerce

spokesman.

Private attorney Diamond said he approves of Happ's mission.

" I know from personal experience that once a builder closes on your house

.... it's almost impossible to get him back out again for anything, " he said.

" It does seem there should be some kind of agency, some sort of method ...

to get the builders and subcontractors back and looking to see what kind of

problems are there. "

If builders object to Happ's approach, they haven't said so collectively.

Deb Burke, a spokeswoman for the Builders Association of Minnesota, said

neither the state association nor its Twin Cities' affiliate has heard

anything from members -- one way or another -- regarding Happ.

Low-visibility program

Not every homeowner is aware of Happ's expertise and the state's authority

that he brings to bear on each case. The state has not publicized Happ's

availability to help address water problems. As a result, only those

homeowners who find him -- about 200 in the past two years -- get his help.

Aided by a second Building Codes and Standards Division investigator when

necessary, Happ sees all cases of water intrusion reported to his division.

The Commerce Department, which regulates building contractors, also has

investigators.

State officials say homeowners learn about Happ through referrals by their

local building officials. But Temple and Judy Chies of Apple Valley said

they didn't get those referrals, even though local inspectors visited their

homes.

After four years of trying to resolve problems in her house, Chies recently

found out about Happ and called him.

Although Chies' builder has worked with her all along, she has had to endure

an endless parade of contractors and experts looking at her house. So far,

the cost of the repair work has been absorbed by the builder, the window

manufacturer and the stucco company. But Chies' frustration level kept

rising. The windows that leaked when she moved in were replaced, but the new

windows leak, too. She grew weary of meetings that didn't bring results.

" At one point I told my builder, 'If you're not bringing a hammer, don't

come because I don't need anybody looking at the problem, I need somebody

physically solving the problem, ' " she said. " I've had testing, I've had

looking, I've had talking, I've had conferences, and I've had a lot of work

done too, but that hasn't fully resolved the problems. "

In early August, when things seemed to be at a standstill, Chies called

Happ, and he came to her house twice to assess her situation.

" He's been extremely helpful, " she said. " He's lit a couple of fires under

people ... Mike seems to be helpful in getting things done a little faster. "

Happ, during his initial meeting with homeowners, explains what the water

intrusion problem is not: It's not the result of houses being too tight;

it's not a problem confined to stucco houses, it's not quickly or easily

solved and it's not the homeowner's fault.

Again, Happ's positions are not typical. Many builders and consumers believe

the persistent myths that houses would be fine if they weren't built so

tight, and that the whole problem can be prevented by avoiding stucco. Mold

and rot in new houses is what occurs when homeowners don't care for their

property is the claim of some builders and their insurance companies.

As the state's standard bearer, Happ brings information that is welcomed by

homeowners but is not widely known:. Builders are responsible for building

code violations for three years from the date of closing. They will be

required to bring the house into code compliance if a violation is found

during that time.

He also brings information that makes homeowners cringe: If mold has been

rotting the walls for years, repairs could cost half the appraised value of

the house. Although the builder is insured, it's up to the homeowner to make

sure the builder contacts his or her insurance company promptly. If that

doesn't happen, the company can refuse to pay for repairs that the builder

cannot afford and leave the homeowner to pick up the bill.

Considers self mediator

Happ considers himself a mediator, with a goal of getting houses fixed and

avoiding lawsuits. But can he handle all the people who want his help? " We

have, to this point, " he said.

Sandy Haberle didn't hear about Happ until recently, but said she wished

she'd known about him three years ago when she began the effort to get her

newly built Minnetonka house fixed.

Haberle thought she was on the road to recovery in March, when she signed a

45-day contract with her builder to do a long list of repairs that included

repairing leaking windows and eliminating other water leaks.

By mid-August, the work still had not been done, and Haberle said she was

tired of paying legal fees.

She described Happ as " my last contact. "

After talking to him, she was elated. " He was the most positive thing I've

had happen to me, " she said. " He said, 'Sandy, we'll get your house done.' "

Back at Temple's home in Eagan, Happ shakes hands with the homeowner, steps

back over the blue-tarped steps and heads for his van. Before he pulls away

from the curb, he's back on his cell phone coordinating the rescue of yet

another owner of a water-logged new home.

-- Staff writers Youso and Donna Halvorsen can be reached at

yousoka@... and halvodm@....

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