Builders settle defect claims

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Builders settle defect claims

3 homeowner groups get $11 million

By Fiscus

The Arizona Republic

April 13, 2002 12:00:00

Homeowners associations complaining of construction defects have scored a

string of recent victories totaling $11 million in judgments and

settlements.

While three Chandler cases recently racked up that total in damages, suits

challenging the quality of other new homes are pending across the Valley.

Those settlements and judgments come at a time when the Legislature is

debating an industry-backed bill making it more difficult for homeowners to

sue their builders. The bill is being heard in the state Senate.

Just how many suits are being resolved is difficult to determine because

builders increasingly are including confidentiality clauses in settlements,

lawyers say.

Builders say settlements are often business decisions by their insurance

companies because it is cheaper than continuing a court fight.

" It's typically a case where it's out of the builder's hands, " said Connie

Wilhelm, president of the Home Builders Association of Central Arizona.

Nevertheless, Wilhelm acknowledged the validity of some claims.

" We're the first to admit that we're going to make some mistakes in building

homes, " Wilhelm said. " They're built by people. We're not perfect. "

However, Wilhelm and builders said claims often are exaggerated. She noted

that the cost for insurance has climbed $5,000 to $6,000 per house to cover

the impact of defect lawsuits that are commonplace in the Valley.

The Cantabria Shores Homeowners Association settled with the developer and

others for $2.3 million, and received a $6.5 million judgment against

subcontractors.

Residents who bought the $300,000 Chandler condominiums near Queen Creek and

Alma School roads say they soon found water leaking into garages from

upstairs balconies, leaking roofs and windows, and mold.

They included Craig , who moved into his new condo in 1998, and said he

soon had a list of 70 items that needed to be fixed, from a sliding door two

inches out of level to a Jacuzzi tab that wouldn't work.

There wasn't hot water to his dishwasher. Water from his deck leaked down

into the garage - a common problem, according to residents.

' house was literally autopsied, as a special company took apart this

and that for the testing. " We just want to get this thing solved and move

on, " he said.

The association sued in early 2000. Mike Del Monte, the association's

president, said residents are optimistic now, but wary.

" I think they'll believe it when we start doing the (repair) work, " he said.

Nearby, at the Terraces at Tiburon Condominium Association, the developer's

insurance company has agreed to an $800,000 settlement. Residents at the

Chandler complex near Warner and Price roads complained of many of the same

problems as at Cantabria.

And in a third Chandler case, the Pueblo Santa Fe Townhome Owners

Association, near Ray and Rural roads, reached a $1.4 million settlement

involving the developer, general contractors and some subcontractors. Other

related suits have yet to be resolved.

All three cases should encourage other homeowners who have construction

problems and are fighting their builders, said Ritchie Lipson, an attorney

who represented the Cantabria and Terraces associations.

" Developers and insurance companies are not going to write checks for $8

million or checks for $800,000 if there aren't problems out there, " Lipson

said.

Many of the defects cases can take four years or longer to be resolved

because they are complex and often involve more than a dozen parties.

However, the Cantabria Shores lawsuit took about two years, and the Terraces

at Tiburon lawsuit was resolved in about 18 months.

Reach the reporter at chris.fiscus@... or (602) 444-7942.