"It is because of the glaring indifference shown by many law enforcement people that some builders have continued to build inferior houses. If officials would get tough, there would be far fewer abuses in home construction."
A. M. Watkins. How To Avoid The 10 Biggest Home-Buying Traps, The Building Institute, 1984
On the chance that this book will find its way to builders, developers, real estate agents, lawyers, politicians, and other people involved in designing, developing, building, selling, insuring, arbitrating and litigating residential real estate, I have some advice.
The all important first step, of course, is to build the house right. There is no way I can tell you what to do. You know what to do. Basically, don't cut corners. Make sure the foundation and `rough-in' are done properly. Most importantly, care about your work. A well-built house is a beautiful thing. Care about what you are doing and chances are the house will be well-built. It's when you really don't care that mistakes are apt to occur.
What if there are complaints? Investigate the complaints and try to help the homeowners, not fight them. Call in other experts
and be honest about what they find. If there is a problem, fix it right the first time and don't let it languish.
Please don't blame the homeowner when mistakes arise. Blaming others is "externalization". By externalizing the problem to someone else, it becomes easier for you to handle, at least for the moment. But be realistic. Is the homebuyer really responsible for construction mistakes? Doesn't it make more sense to investigate the problem and try to fix it, than to blame the homeowners or some other party?
Don't let your ego get in the way of finding a solution. Everyone makes mistakes: doctors, lawyers, builders. If the house didn't turn out right, the problem should at least be fixable with money and time. It's not as if someone was physically hurt; emotionally, yes, but not physically, so all you have to do is fix the problem and the homeowners should be satisfied. But if you send a junior carpenter to repair a structurally defective foundation with a few pieces of particle board, you know it's not going to work.
Don't put your head in the sand. And don't create a situation by which the homeowner has no choice except to file a lawsuit. After all, a lawsuit will cost you something as well. Every dollar you spend on legal fees is a dollar that could solve the problem, and help preserve your reputation. I'm not saying the homeowner is always right, but you shouldn't assume the homeowner is always wrong, either.
Finally, don't make up lies about the complaint. When you lie you engender rage and frustration in the homeowners. Lying, or distorting the truth, destroys your credibility. It shows that you are angry with the homeowners for complaining, and that you are incapable of helping them. Lying hardens the resolve of home- owners to fight you, which is not at all what they want. They want your help, not your anger.
The attitude of builders and developers caught in their mistakes too often seems to be: 'The homeowners are bastards. They are crazy people, you can't satisfy them. They are nuts.' But think: after spending hundreds of thousands of dollars on a new home, why would the homeowners wish to incur aggravation and frustration? None of your customers is asking for a fight. They just want what you promised to deliver, no more and certainly no less. They complain only because something is wrong with their house, not because they are bad people. They will pursue the complaint only if you don't act to fix the house you built.
In summary: Assume the homeowner's complaints are legitimate unless you can prove otherwise with independent, objective evaluations. Investigate the complaints honestly. Work with the homeowners. Don't make up lies or twist the truth for self-serving purposes. And above all, don't call your lawyer unless you have no other choice.
In addition to plumbing and electrical systems, look at the walls and floors; are they straight, and if not, why not? Check for the structural integrity of the dwelling. Above all, think of the people who will move into the house you are inspecting; they are probably no different from you and your family. Don't make it possible for the builder to sell them a lemon.
The way you do business has attracted the attention of Congress. Before Congress tries to regulate the home warranty business, wouldn't it be simpler for you to revamp how your policies are presented to homebuyers?
Here is another suggestion. Offer a "super policy" that does cover major structural defects. This super policy should guarantee without argument or litigation repair of any construction problem that does not meet local building codes. We would have bought such a policy, and I'm sure many other homeowners will. You could have a Class A and Class B policy. Class B would be very limited, covering minor defects only, up to a few thousand dollars apparently what your current policies offer in fact, if not in plain language. Class A would be unlimited, covering all defects what many homebuyers think they are getting with your current policy, but clearly are not. Figure out what you will have to charge to offer a Class A policy, stand behind it without giving homebuyers a run around, and you will have a lot of takers.
Before you heap calumny upon the plaintiffs, have their complaints investigated professionally. By investigating the problems, instead of reflexively fighting the plaintiffs, you will actually help your builder client in the long run. You might not make as much money getting a complaint settled early, but in the long run you will gain a better reputation and probably do better financially, as more and more builders hear about how efficient and reasonable you are.
We know of a lawyer who represented a builder in a defective construction lawsuit. He treated the homeowner plaintiffs in an unnecessarily hostile and combative fashion. When the construction case finally settled out of court, this lawyer was stiffed by his builder client for a huge legal fee. Believe it or not, the lawyer then phoned the plaintiffs, asking if they would testify that he, the lawyer, had actually done the work that generated his legal fees! You can imagine how the plaintiffs responded. I am sure the lawyer wishes he hadn't been so nasty to them.
Be honest with yourself and with your clients. Homeowners who call you about a construction problem are experiencing tremendous frustration. Don't add to their problem. Bow out if you are not the right attorney for them.
If you do take the case, tell the homeowners up front what their chances are of winning and collecting. Let them decide if the case is worth pursuing. Give them a maximum figure that they can expect to spend, and offer to take anything over that on a contingency basis. A bottomless legal bill is a hard nut to swallow for people who have just bought a new house.
Understand that the plaintiffs have already incurred great expense in just getting to your courtroom. Understand that no homeowners in their right mind want to be in your courtroom fighting their builder, and that the case is a unique and traumatizing experience for them. On the other hand, builders (or their lawyers) appear in your courtroom all the time.
Within the law, try to treat the plaintiffs fairly. At the same time, don't reward defendants who have clearly lied, breached their contract, or given homebuyers an unnecessary run around, as our defendents did to us. There may be no legal penalty for such behavior, but you have a societal obligation not to reward builders, developers and architects who have displayed unethical and dishonest behavior. When you ignore these transgressions, as the judge did in our case, you indirect reward the dishonesty and incompetence that caused the problems.
Is there nothing you can do a about a builder who defaults on a judgment by declaring a phony bankruptcy? Is there nothing you can do about a licensed professional who lies about his mistakes? Is there nothing you can do about a developer who knowingly tries to sell a defective house without proper disclosure?
Your natural reflex seems to be to side with the builder or developer in any dispute. Perhaps it is because the builder or developer creates jobs and pours money into the local economy. But are you not elected by the public? Who is your real constituency?
If you are asked for help by someone who finds their new house was not built in accordance with local building codes, don't put your head in the sand. Investigate the complaint. You might be helping many more people and ultimately securing many more votes by thoroughly and honestly investigating a home- buyer's complaint. And you will win a friend for life.
Many other people have suggestions for legal reform at the state level. To obtain more ideas, I suggest you consult attorneys who have represented homebuyer plaintiffs in court. Also, call the United Homeowners Association, the North Carolina Homeowners Association. The people who run grass roots organizations should have many sound ideas.
To members of Congress You have some input into new houses backed by federally-guaranteed mortgages. For such construction I have three recommendations; two of them would require new federal laws:
Section 6 --
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