U.S. Home problems go beyond Sarasota, investigation shows

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U.S. Home problems go beyond Sarasota, investigation shows

posted 08/08/99

By Pollick

STAFF WRITER

This kind of water damage is common to the two-story houses built by US

Home. The window next to a door has peeling paint and crumbled stucco caused

by leaks.

click for these related stories:

Home inspectors see three kinds of leaks

Tampa Bay area U.S. Home owners who have experienced leaks (and Colorado and

California)

U.S. Home Corp. has aggressive plan

U.S. Home Corp. is on a tear, based on its annual report and its own press

releases.

One of the nation's largest home builders, the company racked up its

seventh consecutive year of improved operating results in 1998, as net

income rose 19 percent to $56.3 million on revenues that rose 13.5 percent

to $1.5 billion.

The company has come a long way from 1991, when it reported a $5.5 million

loss and declared bankruptcy.

Two lawyers directed the recovery: Strudler, who is chairman, and

Isaac Heimbinder, who is president. They are co-chief executives.

At a conference with stock analysts in November 1997, Strudler raised the

bar even higher, announcing U.S. Home's ambitious plan to boost its yearly

construction pace by one third to 10,000 homes by the year 2000. As 1997 was

coming to an end, his company was headed for 7,500 delivered homes. Of

those, 2,300 were in Florida.

Southwest Florida, Denver, Colorado, and Northern California -- where the

Herald-Tribune found relatively new homes built by the company that have

leaked -- are all key regions for the Houston-based homebuilder, which tends

to concentrate its efforts in about 30 metropolitan areas.

The company is aggressively changing its marketing mix to include not just

affordable housing for young families, which has been its bread and butter

business, but also what the industry calls the " retirement/active adult home

segment, " which is basically the over-50 crowd.

In an article in Professional Builder magazine in 1995, Strudler and

Heimbinder acknowledged that losing some key managers to competitors had

forced them to change their compensation system.

That year, they added an incentive plan. Over a five-year period, U.S. Home

division presidents would now accumulate an additional percentage based on

length of time with the company, profitability, and return on assets.

" We mesh those three into a formula, " Heimbinder told the magazine. " The

sum builds up and earns interest over the five years. At the end of the

fifth year, he can start taking 20 percent a year out. "

Caballero keeps a dozen plug-in Glade air deodorizers operating at

all times in her family's two-story home at Lakes in .

" You have to, because otherwise you get this musty smell in your house, "

she said.

It was in the spring of 1997 that the rain began coming into her house,

built by U.S. Home Corp. While the puddles in the living room are long gone,

the stucco walls are still cracking, and there are signs of moisture --

stained wallpaper, patches of stucco that never cease to grow black with

mold.

Within the past month, U.S. Home ended a yearlong feud over water intrusion

in the gated community of Turtle Rock in south Sarasota by buying back four

two-story homes -- $1 million worth of housing -- from their owners and

making county-supervised repairs to 14 other two-story stucco models.

Housing-code violations found in Turtle Rock also have prompted ongoing

investigations by two state agencies.

But U.S. Home's problems with leaky two-story homes are neither limited to

those built in Turtle Rock nor to Florida.

A Herald-Tribune investigation has uncovered seven homes that have leaked

in four U.S. Home Tampa Bay subdivisions. A newspaper reporter visited those

seven homes and interviewed another 17 homeowners in Florida, California and

Colorado who told of their own water intrusion problems.

" When you build 63,000 homes, you're going to have some warranty work, "

said Somoza, vice president of public relations for the Houston-based

homebuilder. " I fail to see the commonality between these situations you are

writing about. "

Delayed flooding

The Caballeros watched excitedly as their home was built, making videotapes

to show the progress. One shows a happy Caballero waving to her

husband and the camera as he stood in what would become the front yard.

Their house, completed in October 1996, is in a neat middle-class

subdivision still being built today by U.S. Home, one of the nation's

largest home builders and the largest on the Gulf Coast of Florida.

After the Caballeros moved in, they discovered problems. The south wall

would shake during a heavy wind. The second-story floors creaked loudly with

each step.

U.S. Home addressed these problems, honoring its warranty. The west

exterior wall no longer shakes, and the floors have been shimmed and screwed

down so that they don't creak excessively.

But the next spring, the home began leaking.

The family video recorder began chronicling less-happy scenes. Interspersed

with a scene of ducks walking across the lakefront yard is a scene of water

dribbling out of a light switch on June 28, 1997. Other scenes include

mopping up puddles in the entranceway and adjoining living room.

" A lot of it was coming in through light receptacles, " Caballero

said. " We would get puddles. We had pools of water in our house on the

ground floor. "

Down Interstate 75 a few miles in Riverview is another large U.S. Home

development called Summerfield Crossings. Water intrusion is a problem

there, too.

After battling U.S. Home over severe leaks in his new house in Summerfield,

resident DeBlasio formed his own company, Home Consultation of

Florida, to help others fix their homes while they are still under warranty.

He has inspected eight two-story houses built by U.S. Home at Lakes

and another 15 at Summerfield.

" As the years go by, the homes are going to show real problems, " DeBlasio

said. " The moisture behind the walls brings mold. The stucco is going to

start falling off. "

While he has prevailed on behalf of clients regarding many other warranty

problems, he has had no luck getting U.S. Home to develop a comprehensive

fix for stucco cracking.

Gene Lanton, a general contractor and executive at the U.S. Home Clearwater

Division, would not specifically respond to questions about water intrusion

at the homes built by his division.

" Every home that has requested warranty service, U.S. Home has performed

warranty service 100 percent on those homes, " he said.

Destruction in California

In Elk Grove, Calif., Hunsaker and his neighbors in the Tradewinds

subdivision have knowledge of what can happen when water intrusion proceeds

undetected.

This subdivision near Sacramento was built in 1990-1991. But over time,

residents say, rain seeped into the frames of the homes around windows and

past faulty flashings, rotting away parts of the wooden structure of the

homes and making major repairs unavoidable.

" Out here three-quarters of these houses are two-story and there are 97 in

this tract alone, " Hunsaker said. " And the workmanship is horrendous. "

A U.S. Home official who heads the Sacramento division that built the homes

could not be reached for comment, despite several attempts.

A year ago, Hunsaker began negotiating on behalf of a number of homeowners

in his subdivision.

The water-intrusion problem only showed up gradually and is " causing all

kinds of slow and sure destruction, " Hunsaker said.

Hunsaker, who has construction experience, worked out a deal with U.S.

Home's headquarters staff in Houston in which he is directly supervising

extensive repair work on behalf of the homeowners.

In the written deal he has worked out, U.S. Home acknowledges in writing

that the six homes experienced water intrusion through or around windows,

and that the company and its subcontractors will make repairs that include

removing and replacing stucco where necessary.

In some cases, Hunsaker has required the removal of entire exterior walls

of stucco to get at the rot that is growing inside.

" We found notches, all kinds of reasons for water to get in, " Hunsaker

said. " And it does it for a relatively long period of time. "

A single, steady leak can create a major problem down the road, even if it

shows few symptoms inside the home.

One day this spring, Hunsaker said, he supervised the removal of a strip of

stucco from the top of a house all the way down to the ground.

" The reason for that, there was an improperly flashed skylight by the

fireplace, " he said. " It developed a hole down the wall, and rotted the

wood. "

That could serve as an important warning to other homeowners, who have

simply learned to live with a persistent leak.

Rain doesn't always come into Diane Kovacevic's U.S. Home living room at

Summerfield Crossings in Riverview.

" It has to be a pretty strong rain, " said Kovacevic, as she pulled back a

still-damp carpet and carpet pad from the left side of the family hearth.

" My husband figures the leak is between the roof and the chimney. "

The Kovacevics have had the same leak since Jan. 1, 1997, two weeks after

they moved into their stucco two-story home. U.S. Home has sent its warranty

crews to the home many times, but the leak keeps coming back.

Less than a year ago, they paid for a screened enclosure over their pool.

The enclosure is attached to the wall that leaks. U.S. Home now blames the

pool enclosure for the leaks.

" I said 'Excuse me!, " Kovacevic said. " It has nothing to do with our pool

enclosure. "

Her husband, Pat, now makes regular trips to the roof, where he dabs

roofing cement on the joint with the chimney in an attempt to stop the leak.

Missing components

At Turtle Rock, one of the unhappy U.S. Home owners, Gerry Royle, launched

a public debate over U.S. Home's construction methods when he sliced open

his home, exposing the fact that required components such as hurricane

straps and a sill plate were left out in the connection between the first

and second levels.

Sarasota County, confronted with the housing-code violations that had been

hidden from view under Royle's stucco, ordered other homes sliced open. Last

summer, the county's construction and property standards office and U.S.

Home reached an agreement calling for the company to cut open all 18

two-story homes built until that time at Turtle Rock. U.S. Home was also

ordered to reinforce the connection between the first and second levels.

The problems at Turtle Rock last year prompted an investigation by the

Florida Department of Business and Professional Regulation, which continues

today. The Florida Attorney General's Office is also examining U.S. Home's

building practices.

Earlier this year, a structural engineer working for several of the

families in Turtle Rock discovered that U.S. Home had left out another set

of components from at least three two-story homes: reinforcing boards that

were to be nailed tightly to roof trusses when they bridged a raised

ceiling.

At least six of the U.S. Homes in the Markham Farms subdivision in

Longmont, Colo., were also built without a vital component.

In that community, U.S. Home left out the concrete foundations, called

caissons, under the front porches of a number of homes.

" In a number of cases, the caisson was either not installed correctly in

that it did not go down to undisturbed soil, or it was left out altogether, "

said Dave Van , building official for the city of Longmont.

Van said the number of homes affected is six or eight. Community

activist th says it is more like 10 or 12.

Van said U.S. Home has already corrected the problem in each case by

removing the existing porch, installing the proper foundation and

rebuilding.

" Tearing the porch out and putting a new one in is exactly what needs to

happen in that kind of situation, " said U.S. Home spokeswoman Somoza.

" That's why it is good to have a company with a strong warranty program.

However, several homeowners said they were still waiting for U.S. Home to

act. One of those is Beatriz Ramos. Like several other homeowners in

Longmont, Ramos said her house has leaks.

" You are trusting them to have built a good house and you're not expecting

things to leak or the porch to fall away from the house, " said Ramos, who

owns a two-story in Longmont. " You're expecting a solid home. " No lawsuits

allowed

The sales contract the Caballeros signed, like others written in the 1990s

by U.S. Home, precludes the buyer from suing the company and instead refers

all disputes to mediation followed by binding arbitration. Other builders

offer similar contracts, and few buyers think to even question them.

The Caballeros, armed with their videotapes and assisted by their home

inspector, DeBlasio, went to an arbitration session in the spring of 1998.

They walked away with U.S. Home's promise to make repairs, which it did,

and a few hundred dollars to replace flooring damaged by water.

U.S. Home sees its Zero-Defect Warranty as a comprehensive and a viable

remedy to the defects in the houses.

" U.S. Home has also developed one of the most comprehensive quality-control

programs in the industry, the U.S. Home Customer Satisfaction System, " the

company states. " This system ensures the homes we build are virtually

defect-free. "

The homeowners contacted for this article see it differently, though.

" They drag around, then tell you your warranty is up, " said ,

who lives on the same street as the Caballeros and whose home has

leaked.

" They set that corporation up very smart, " said Hunsaker of California.

" They knew they were going to have hits and they are very well equipped to

deal with it. The homeowner on his own doesn't stand much of a chance. "

Inspired to act

Lately, Caballero is worried about a new triangular-shaped dark

patch to the lower right of her daughter's bedroom window. U.S. Home's

warranty crew already tended to a leak with a similar look at the left

bottom of the same window.

She is also worried about her daughter Clarissa, age 8, who is waking up

with headaches and is being treated for swollen nasal passages, swollen

sinuses and fluid in her inner ears.

Health concerns prompted three Sarasota families to move out of their

two-story U.S. Homes.

If the walls of a home stay damp enough, they can become thriving mold

colonies. Headaches and symptoms resembling respiratory flu can result.

After the Herald-Tribune began talking with the Caballero family at

Lakes, U.S. Home sent two of its employees to visit the Caballero home.

They promised Caballero a fresh paint job with a new type of plastic

paint and sent out a worker to revisit popped-out drywall nails in the

upstairs hallway, leaky windows and water-stained wallpaper.

At the same time, the company sent her two letters which implied that she

had reported the house was experiencing no current water intrusion.

" I'm quite pleased they are repairing these things, " she said, " but I'm

also concerned that it is a great big coverup and we will give up any and

all of our rights. "

Home inspectors see three kinds of leaks

Leaks are found in stucco and around windows and flashings

What is wrong with these two-story homes?

Inspectors who have investigated the leaky houses say it is not any one

factor, but a combination.

U.S. Home builds its Gulf Coast two-story houses in two stages. The

exterior walls of the first floor are made of concrete blocks. That becomes

the foundation for a second-floor structure that is all wood --

prefabricated floor trusses, two-by-four walls, and a set of roof trusses on

top of that. Then comes a plywood skin.

and Caballero of Lakes in say their plywood

was sheathed in tar paper, before the metal lathe and stucco were applied.

During 1998, U.S. Home began adding a layer of plastic under the stucco.

Sarasota engineer Stirling was retained by each of the four Turtle

Rock homeowners whose homes have since been bought back by U.S. Home.

In those homes, he views as related issues the cracked stucco and the

framing underneath it, which was not built according to the building code.

" You can't take stucco cracking away from the fact that the house framing

was done wrong. If the house is flexible, the stucco is going to crack. "

Meanwhile, building the two-story house is a much more challenging exercise

than the usual Florida configuration -- one round of concrete block topped

by a set of roof trusses.

The two-story job is " not twice as hard, " Stirling said. " It is four times

as hard. "

Home inspectors say the U.S. Home two-story homes exhibit three kinds of

leaks: through cracked stucco, around windows, and around flashings, the

folded metal plates that are often used to separate a roof from an adjoining

wall.

Even if the homeowner does not experience puddles, which the Caballeros

did, these leaks create a more insidious problem. The moisture remains in

the wooden wall. Eventually that part of the wall can rot. As was the case

with a couple of Sarasota two-story houses bought back by the company, mold

colonies can multiply within the moist inner-wall environment, creating a

health risk.

On houses owned by the Caballeros and by in Lakes,

the second story exterior walls show numerous vertical cracks. These can

create a path for wind-driven rain to seep into the walls.

A second kind of leak occurs from a lack of adequate flashing, the flat

pieces of metal that run down gulleys between sections of roof, or where the

roof meets an outside wall.

The third and most common kind of leak takes place underneath the aluminum

window frames that are set into the stucco.

The owner of one inspection service, Ken Young of Young Home Consulting in

Dunedin, said he thought most of the problems stemmed back to faulty

installation of flashings by sub-contractors.

" I did, back there in El Nino, some investigations for them (U.S. Home)

when the water intrusions were occurring. A lot of it had to do with the

flashing and how it was applied, " Young said.

However, another home inspection service owner in the region listed problems

that were more extensive.

" In some houses, the stucco was not put on as thick as it should be, " said

Park, co-owner of Booth Building Consultants of Belleair Beach. " It

tended to get a lot of hairline cracking in it, running vertically. The

heavy water running down it, it'll go in. "

Hillsborough County inspectors cited improper stucco work on at least two

two-story U.S. homes in after the owners were living there.

The Caballeros made copies of red tags on their home citing insufficient

stucco.

In another section of Lakes, the two-story Brighton model owned by

Oliver and his wife was initially red-tagged by a county inspector in

November 1997.

" Stucco on block only 3/8inches thick at different points. Stucco doesn't

meet code min. 5/8, " wrote inspector Lois Millian in reference to the '

house. With no stucco added by Jan. 22, 1998, she cited the builder a second

time.

U.S. Home hired an engineer to conduct its own tests of the stucco depth,

and determined that it was thick enough. However, the company later applied

an extra coat of stucco to the second story exterior walls of the

house, Oliver said.

Hillsborough County building official Burt Folce said red tags and stucco

problems are a frequent occurrence.

" I've got builders getting red tags all the time, " he said, adding " We

routinely get problems with stucco. "

What about U.S. Home?

" I've probably got a higher number of red tags on U.S. Home than any other

company in the county, simply because of the volume they do here. They are

clearly the volume leader in the low to mid-priced home area. "

Tampa Bay area U.S. Home owners who have experienced leaks

The Herald-Tribune visited these homes

Examples of Longmont, Colo., and Elk Grove, Ca., homeowners who report

problems with their U.S. Homes.

Beatriz Ramos and

Address: 1524 Skyline Lane, Longmont, Colo.

Subdivision: Markham Farms

Model: Two-story frame.

Summary: Bought home three years ago when it was two years old. Has had

three leaks, two of which are current. Water leaked into breakfast room when

they bought it, because of company's failure to install a flashing. Porch

sags, lacks footings and is supposed to be replaced, lacks footings. They've

been working on getting the porch done for a year.

a and Ramond

Address: 3369 Larkspur Drive, Longmont, Colo.

Subdivision: Clover Creek

Model: Jamboree, two story

Summary: Had a roof leak near skylight of second-floor bathroom, May 1997,

four months after moving in. Currently has a leak around this skylight,

which they will fix themselves. Hardwood floor buckled in dining room.

Company at first blamed it on owner, later said they found a leak in the

foundation through which ground water was damaging floor, and partially

resanded and restained floor. Also experiencing noticeable concrete settling

on front walk and driveway, and on rear patio.

Hunsaker

Address: 4506 Mapleplain, Elk Grove, Calif.

Subdivision: Tradewinds

Model: Two-story

Summary: Secured repairs in 1996 and 1998 on his own two-story U.S. Home,

built in 1991. Is now supervising repairs on behalf of six other homeowners,

all involving water intrusion.

Pat and Diane Kovacevic

Address: 13307 Beechberry Drive, Riverview

Subdivision: Meadowbrooke subdivision, Summerfield Crossings

Model: Two-story

Summary: Has been dealing with the same leak, near the fireplace, since

moving into the new home in December 1996. U.S. Home is now telling the

family that a pool enclosure they had installed in November 1998 is the

cause of their continuing leak, and thus the leak is not covered by their

warranty.

and Gwen Oliver

Address: 13301 Beechberry Drive, Riverview

Model: Stonebridge two-story

Subdivision: Meadowbrooke, Summerfield Crossings

Summary: This home has leaked in a number of areas, including: two opposite

walls of the garage, which is part of the house; a laundry room; the

kitchen; and the front door.

and Caballero

Address: 1227 Alpine Lake Drive,

Subdivision: Woodbridge II section, Lakes

Model: Stonewood, two-story

Summary: Home has leaked in a number of ways since owners occupied it in

October 1996. Owners went through arbitration with U.S. Home. Company agreed

to fix leaks in stucco and to pay family several hundred dollars to replace

ruined vinyl flooring. Stucco now cracking again. Homeowners to pay for

special plastic paint job.

Address: 1225 Alpine Lakes Drive,

Subdivision: Woodbridge II section, Lakes

Model: burg two-story

Summary: Moved in August 1996. U.S. Home fixed a number of leaks when under

warranty. Has signs of leakage under an upstairs window. Back of home,

facing small lake, shows heavy gray streaking on second-story stucco.

Streaking comes back soon after bleaching.

Oswald

Address: 833 ford Drive,

Subdivision: Kensington Estates, Lakes

Model: Brighton two-story

Summary: U.S. Home addressed about 70 complaints on the home, which the

family purchased in December 1995. Has leaked around front door.

Hillsborough County building department red-tagged the house twice after the

family moved in for insufficient stucco on its exterior walls. No

current leaks.

and Karla Littlefield

Address: 1635 Gray Bark Drive, Oldsmar

Subdivision: Eastlake Oaks

Model: Sheffield II two-story

Summary: Has had rainwater leaks into family room, then into living room,

since moving in on Feb. 22, 1997. Twelve-year old son with asthma needs

pulmonator frequently.

Jim Quinlan

Address: 4210 Rotherham Court, Oldsmar

Subdivision: Devonshire, Ridgemoor

Model: Brighton two-story

Summary: Has had repeated leaks from two showers as well as rainwater leaks

into the kitchen and dining room since moving into home in November 1996.

Second-story stucco shows vertical hairline cracks.

Staff Writer Pollick can be reached at 941-957-5142 or

michael.pollick@....