Owner of 'lemon' home seeks legislative changes

[Guest guest]

Owner of 'lemon' home seeks legislative changes

By:Rob , Sun Staff Writer February 22, 2002

A Kansas House committee on Thursday began hearings on a bill introduced at

the request of a woman who has claimed - in large spray-painted letters on

her own south Overland Park home - that she and her husband bought a " big

blue lemon built by Enterprises. "

The homeowner, Barton, admits the bill would do little to help her in

an ongoing battle with the 18-year-old Overland Park development and home

construction business, which through its president, Jeff , denies any

wrongdoing.

But after contacting state Rep. Ray Merrick, R-Stilwell, three weeks ago and

asking for new legislation to force new-home builders to repair shoddy

construction after closing, Merrick put the onus on Barton to come up with a

bill for him to introduce. And he told her that, due to a deadline for

putting new bills in the hopper, she had only a couple of days to do it.

Subsequently, Barton contacted Seats, a Liberty, Mo., resident who

founded a nonprofit group called Homeowners Against Deficient Dwellings

(HADD) in 1993. Seats had no clue about how to write a bill, she said. " But

I told , 'There's a bill in Missouri I'm supporting,' " Seats said, " so

she gave it to Rep. Merrick, and he introduced it. "

The bill, introduced Thursday in the Kansas House Labor and Commerce

Committee, has two primary components, Merrick said. First, it would

prohibit home-improvement loans secured by the customers' homes. That

restriction has nothing to do with Barton's situation.

The second component is a package of three state-mandated warranties that

new-home builders would have to offer. One would cover homes against faulty

workmanship and defective materials for a two-year period. Another would

cover faulty installation of plumbing, electrical, and heating and cooling

systems for five years. A third would cover major construction defects, like

bad foundations, for 10 years.

Merrick expects the bill to be unpopular with both good and bad apples in

the home-building trade because " they're going to have to buy insurance to

cover themselves, and that's going to up the price of their homes. "

" I've also heard builders ask, 'Why do we need something like this when we

have a lot of building codes?' " Merrick said. His answer to that is a

question: " So how come we're having all these building problems - big cracks

in houses, floors not level and everything?

" The bottom line is that I've got several constituents who live in an area

where they've had a lot of problems with builders getting things done after

buying a new house, " Merrick said, " and I just think there should be some

protection. "

As with the home-improvement-loan provision, the new warranties, at first

blush, seem largely inapplicable to the Bartons' situation. She, her

husband, Chad, and their 10-year-old daughter moved into their home at 7875

W. 155th Terrace in Overland Park's Stanley community just last September,

and the home is still under a one-year warranty.

But Barton said that warranty covers only structural problems, while the

bill Merrick introduced would provide protection against workmanship

problems.

Overland Park Codes Administrator Tim said he recently talked to Barton

and neighbor Ginger , who is using fluorescent-colored posters to rail

against Enterprises, and concluded that most of their complaints were

about " things we would consider workmanship issues. "

said workmanship problems such as crooked walls, sloping floors or even

cracked walls, which are common in this area due to climatic conditions,

fall into a " fuzzy area " that would be tough to address with enforceable

legislation.

Thus, he believes homebuyers would be better served through self-protective

measures.

" I don't think people are doing their homework, " said. " They go on a

homes tour, see something they like and buy it without talking to others who

have bought from the same builder or checking on records. "

said Overland Park records would have revealed to Barton that

Enterprises had been cited several times by the city for allowing people to

move into homes before occupancy permits were issued and that inspectors

found more than 50 violations during a rough-in inspection of one

Enterprises home in their neighborhood.

That was unusual, said, adding that only 10 to 20 violations are

normally found during a rough-in inspection. But he said the contractor

corrected all the codes problems before an occupancy permit was issued.

" When we issue an occupancy permit, I would venture to say the home is safe,

and that's really our goal, " said , adding that a new countywide

contractor licensing program focuses on safety issues, as well. " When you

get into workmanship or quality issues, that's a whole different ballgame. "

One way to mitigate those issues, in addition to investigating contractors,

is to refuse to close on a home until all problems noted prior to that time

have been fixed, sources agreed.

" You would not believe how good some builders are at getting you to move in

by saying, 'It's no problem. We've got your punch list. We'll be back to fix

this,' " Seats cautioned. " But once these builders have their money, they

don't come back. "

While Barton said that's what happened to her despite several calls and

letters to Enterprises, Jeff insisted that " the lady has

never, ever, ever contacted me. "

And he's not going to make any repairs for the Barton's now, added,

because they have never made a payment on a $63,000 second mortgage that

said he was forced to cover.

The unfortunate part of his market niche, which relies on attracting

high-risk buyers through low down payments and second mortgages,

said, " is that we come across what I call the Jerry Springer people. "

" But there's 15 to 20 other people in that same area " who are happy with

their Enterprises homes, said. And they're angry at Barton and

for defacing their homes " because that's bringing the value of

everyone's houses down. "

If Barton and have legitimate complaints, asked, " Why don't

they get an attorney and sue me like a normal person would? "

Barton said she has contacted two attorneys and intends to do just that.

In the meantime, has sued the Barton's in County District

Court, alleging that they violated a declaration of restrictions on their

home by spray painting protestations, lemons and designs all over it. The

case was heard Feb. 6 in District Judge Steve Leben's court, but as of

Thursday no decision had been issued.

said Wednesday that he had also begun the process of filing a lawsuit

to force payment of the Barton's second mortgage. Barton said she had been

advised by her attorneys not to make any first- or second-mortgage payments

until the dispute is settled.

Barton and are not the only area homeowners who have had disputes with

Enterprises. Last March, entered into a consent decree to end

a case Missouri Attorney General Jay Nixon brought on behalf of 36 residents

of the Kansas City area who had complained of substandard work. The decree

ordered Enterprises to pay for inspection and repair of all 36 homes.

, who said he had been building about 200 homes a year, including

about 60 in County, admitted his company's rapid pace during the

late 1990s had created some quality-control problems. But he said the

satisfaction of the vast majority of his recent buyers was evidence that the

company had become extra responsive to buyers.

Barton laughs at that suggestion.

She and her husband, who own the Clay Cafe at the Great Mall of the Great

Plains, said they wanted to move closer to their pottery business and picked

out their home in 's Pinewood North subdivision last August.

During a pre-closing walk-through with Enterprises employee Steve

Middleton, who is now the Bartons' neighbor, Barton said, she found " a lot

of things wrong with the house. "

" He said don't worry, we'll get it done, " she said.

Then came closing time, Barton said, and she saw that the $270,000 price of

the home, as printed on promotional materials and an application she filled

out, had been bumped up to $316,000 on the closing contract.

Barton, who put down just $1,000 for the house, said she was led to believe

the price increase and another surprise - a $63,000 second mortgage - were

merely creative financing tools, not costs she would actually have to pay.

" I kept thinking to myself, 'This just doesn't seem right,' " she said. " But

what do I know? Mortgages are something I don't deal with. "

Soon, however, she was asked to deal with both first- and second-mortgage

payments, despite the fact that her complaints about the home continued to

go unanswered.

denied bumping up the price of the home, saying it was listed at

$316,000 and closed at $316,000.

He admitted that the homes he sells to high-risk buyers are priced over the

market because " we lose about 15 percent of our seconds ... so if we lose

that percentage, we've got it allowed for. "

But , who said he was personally carrying about 400 second-mortgages

on homes he has built, added that he didn't bump home prices up at closing.

The aforementioned lawsuit brought by the Missouri attorney general accused

Enterprises and its financing arm, Associated Capital Inc., of

fraudulently increasing prices that buyers had to pay. But those allegations

were not mentioned in the consent decree that ended the case.

The bill debated by Merrick's committee Thursday doesn't address such

financial issues either.

But according to Barton, she views it as a good first step toward more

sweeping homeowner-protection laws.

©The County Sun 2002

http://www.zwire.com/site/news.cfm?newsid=3355296 & BRD=1459 & PAG=461 & dept_id=1

55725 & rfi=6