As Builders Cut Corners, Buyers Pay the Price

Some owners are paying the price for homes built in a hurry during the boom years, according to the cover story in Florida Trend magazine.

In addition to contractor abandonments, the Sunshine State is seeing a rash of defect and delay cases as the Florida housing market deflates, according to attorneys around the state.

Consumers’ home builder complaints filed to the Department of Business and Professional Regulation have increased steadily in Florida over the past five years, from 1,545 in 2001 to 5,259 last year.

Construction lawyers say those numbers represent just a fraction of the lawsuits and other types of disputes statewide, particularly in the South Florida housing market.

Stacy Bercun Bohm, a construction attorney with Akerman Senterfitt in Fort Lauderdale, cites the downturn in the real estate market, increasing material and labor costs and the 2004-05 hurricanes as primary factors leading to defect and delay disputes.

Some cases may represent desperate attempts by condo investors to get out of preconstruction contracts by claiming substandard work.

If a Florida mortgage holder believes he or she did not get what he or she paid for, they’re going to be upset at the contractor(s), after all.

Many of the complaints involve contractors who allegedly cut some corners as costs boomed and the housing market began to wane. Between August 2004 and December 2005, the construction and supply costs across Florida soared 30 percent, according to the Florida Home Builders Association.

Finding — or using — qualified workers was also an issue.

“Because so much was going up so quickly, you had subcontractors on the job who didn’t have experience building a 30-40-story high-rise on the ocean,” says Bohm.

“You had subcontractors here from other parts of the country getting in on the boom, but they had no experience with environmental factors such as salt air and the humidity here.”

Richard Tan, a home inspector in Orlando, says the situation is the same inland. Tan, a contractor, has carved a second business niche for himself over the past seven years by inspecting new homes.

In touring Central Florida homes as an inspector, he tells story after story of substandard work by both custom luxury builders and cookie-cutter home building corporations.

“My reports used to be 20 to 30 pages long, but lately they’ve been hitting 50 to 60 pages,” he says. “And these are brand-spanking-new homes.”

If his situation is commonplace, the number of upset Florida mortgage loan holders may only be starting to rise.

Follow the link to continue reading this Florida Trend article on Florida’s tumultuous home building industry …