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The facade of your storybook home may hide the dark side of Tampa Bay's building boom: major construction defects brought about by insufficient supervision, cheap materials and cut-rate subcontractors.


© St. Petersburg Times, published March 12, 2000

Want to buy a new home? Your timing's great.

Want it well built? Your timing's awful.

Dennis Preslar found out first-hand.

In 1998, he and his family moved into a new house built by U.S. Home Corp. in the Hunter's Green subdivision of Tampa.

Hidden flaws (with diagram)

Riding on its reputation

Industry regulation lacking

Home buyers say quality fell through the cracks

So many new homes, so few skilled workers

U.S. Home: Survey by Times is not accurate

According to Preslar, they had no hot water downstairs for almost three months. One bedroom had no air-conditioning ducts. The kitchen floor molded. The foundation cracked. Wallpaper turned black. Soffits turned green. The carpet frayed. The banister fell down. Kitchen lights dropped from the ceiling.

"The subcontractors were terrible. For every one good one, we had two bad ones," Preslar said. "We visited every day (during construction) -- we had to, just to keep things from falling apart.

"I had my own home inspector. He had 176 items on his list."

Preslar may have fallen victim to the dark side of prosperity: full employment, a booming economy and a long run of low interest rates that propelled home sales to record highs -- but left builders facing fierce competition and a drastic shortage of skilled workers.

To increase their market share and hold down costs, some of the area's 500 builders made their houses fancier, but reduced construction supervision, used cut-rate materials and paid bottom-dollar to subcontractors.

The outcome?

According to a Times poll of new-home buyers in Pinellas, Hillsborough, Pasco and Hernando Counties:

One in five homes built in the area during 1998 contained significant defects, such as badly cracked slabs, leaks, buckling floors, sagging roofs.

Four in 10 homes weren't completed on time; one in six delays lasted more than three months.

Four in 10 buyers would not recommend their builder or would do so with reservations.

[Times photo: Joseph Garnett Jr.]
For nine years, the area's new home market has boomed. Experts say many new houses have flaws, but builders differ in how hard they work to eliminate them.
Customers of U.S. Home, by far the biggest builder in the area, suffered more and longer delays than average and reported less satisfaction, according to the Times survey. U.S. Home disputes those findings, saying its customer satisfaction reports show otherwise.

Then there is Suarez Housing, a homegrown company that woos buyers with old-fashioned building methods and prompt warranty work. Of 71 Suarez customers in the Times survey, just one reported a significant problem, compared with 33 of the 131 U.S. Home customers surveyed.

Some home buyers may have worse problems than they realize. Thanks to price squeezing and the widespread use of don't-give-a-damn laborers, certain hard-to-spot flaws have become commonplace, the Times found. These defects, which undermine a home's strength, wind-resistance, durability or efficiency, include: watered-down concrete, diluted termite treatments, useless hurricane straps, unreinforced walls, thin stucco, insufficient insulation and inadequate flashing to avert roof leaks.

Though the public spends millions on government oversight, buyers can't count on regulators to find these or other problems, to make builders fix them or to discipline contractors when repairs aren't made. Nor can buyers rely on mortgage companies to spot flaws; their job is to see how much -- not how well -- work was done.

The courts aren't much help either. Lawsuits are fraught with risk and expense; they are actually prohibited by some builders.

Most buyers don't go to court or to regulators, anyway. They negotiate with the builder; after all, he holds the key to warranty work. If those efforts dead end, buyers often put their homes on the market and move.

Some builders told the Times that people expect perfect houses and instant repairs -- neither of which is possible.

But Hudson resident Lucy Delaney said her Panda-built house is far from perfect. For one thing, the bathroom plumbing was installed in the pantry. Delaney said her dad ran workers off when he caught them smoking pot on her patio. The builder said that the plumbing was fixed and that he told the subcontractor to keep drug-using workers off the site. He said the Delaneys were difficult customers.

In fact, every house has construction flaws -- building a house is a complicated business. But builders differ in how hard they work to eliminate problems and how quickly they fix them.

Many buyers told the Times they had to bombard their builders with repair requests. Then they got sloppy work and additional damage or they got stuck with the cleanup. For two years, Carlton Hepburn of New Port Richey has complained that his Grandview Home floods. Hepburn said he and his wife "sit in our kitchen every time it rains, to see if we have to bail." Grandview didn't respond to a message from the Times.

None of this surprises Brian Pruett, a Sarasota builder of luxury custom homes. With the frenzy of construction taking place in recent years, he said, he has seen work quality decline -- especially with high-volume builders.

"Their game is to do it cheap," he said, "and they don't care about quality."

'Bleepity-bleep U.S. Home'

One day last fall, Wayne Mullen stopped at his neighborhood Publix to get a prescription filled. Here's what happened, Mullen said, when he gave the pharmacy clerk his address:

"Oh my God!" she blurted. "You're in Northwood, too? That bleepity-bleep U.S. Home."

Bleepity bleep would be the nicest thing some customers would say about U.S. Home Corp., the Houston-based company that, in 1998, built one in 10 Tampa Bay area houses. At that rate, once U.S. Home's sale to Lennar goes through, the combined companies will account for 17 percent of the area's market.

U.S. Home officials echoed what every big builder told the Times: Constructing that many houses reduces mistakes.

But that's not what the Times survey showed.

U.S. Home had no fewer construction problems than the average builder.

And, when the newspaper compared the responses from U.S. Home customers with those from buyers of the four next-largest builders of homes with comparable median prices (about $112,000 to $135,000), U.S. Home customers were at least:

41 percent more likely to suffer delays getting into their new home.

More than twice as likely to rate their experience below average or poor.

Almost twice as likely to say they would not recommend their builder.

"I believe we are building a better home today than ever before," said Gene Lanton, president of U.S. Home's Central Florida division. "Obviously, the consumers say they still want better. We're hearing them.

"We've resolved every issue brought to our attention."

[Times photo: Fraser Hale]
Sandra Caballero watches U.S. Homes workers remove the stucco from her Brandon home to check for leaks. Caballero said her walls and floors showed water, and it even came through light switches.
In the past three years, his division has spent some $250,000 on home inspections and training programs, Lanton said.

Yet the company gets bad reviews from others -- such as some home inspectors polled by the Times, the 30 home buyers whose complaints are part of an on-going review of the company by the Florida attorney general's office and a Tampa customer who set up a Web site for bitter buyers.

Unhappy U.S. Home customers generated news stories in Colorado and California and lawsuits in Maryland and Arizona.

Four Sarasota houses were so shoddily built, U.S. Home bought them back -- after a disgruntled customer went public.

Going public seems to spur the company to action.

Though her Brandon subdivision is loaded with problem houses, Sandra Caballero said, U.S. Home fixed only those whose owners were quoted in a newspaper story about the company.

Two other buyers said once the company learned they'd spoken to the Times, they got repairs.

After the Times started its survey, U.S. Home began responding in writing when Hillsborough County building inspectors flagged construction flaws, according to Hillsborough County building official Burt Folce.

Even when U.S. Home resolved problems, sometimes at a cost of tens of thousands of dollars, some buyers remained resentful.

Here's a sampling of what those buyers told the Times:

"The warranty manager says he's unsatisfied with the subcontractors' work but that they're the only people he can send to me. That's supposed to make me feel better? I met the man who designed the model. He asked me how I liked it. I said, "I love the model; I hate U.S. Home."'
- Ellen Rosenthal, Riverview

"I always stressed, if I'm not satisfied, I'm not going to close on the house. They said if I didn't close, they'd sell the home to someone else. I had given them more than $12,000 down. I was afraid of losing my money."
- Ruthnadia Carrion, Brandon

"Areas of my home showed water through the walls, the carpeting, the floors. Then we had pools of water coming in through the light switches."
- Sandra Caballero, Brandon

"They decided at one point THEY were going to sue ME. . . . When you close on your house, you give away your right to sue them. The contract says you have to go to arbitration. I don't have the money to do that."
- Karla Littlefield, Oldsmar

"We were approved for a 7.5 percent mortgage. We had agreed to 5 percent down. They said, "We can't close this home at that price unless you use our mortgage company.' The day we were to close the interest was at 10 percent and they wanted another 5 percent down. We're in litigation now."
- Dennis Preslar, Tampa

"I have a two-car garage. I can get a car and a motorcycle in it. They made us sign a paper (accepting it) if we wanted to close. In return they gave us a better mantle on the fireplace and a garage-door opener, but that's hardly fair compensation."
- Coleen Verdon, Palm Harbor

"I had a lot of leakage. . . . They were just coming back and caulking, caulking, caulking. The whole neighborhood has had problems. One guy refuses to do anything else to his house. He is letting it go to pieces... If you drive by his house, you think, "There's a man who don't care no more."'
- Steve Oliver, Riverview

Satisfied customers

Several U.S. Home buyers told the Times they were drawn to the company because it offers lots of square footage for the price.

And clearly, not all -- or even most -- of the company's customers are dissatisfied.

[Times photo: Dan McDuffie]
Home inspector Ken Young, who was hired by U.S. Home as a quality control consultant, points to a major support stud that is not secured to the foundation of another builder's house under construction in the Cross Creek area of Hillsborough County.
Debbie and Joe Avanzato of Oldsmar are very happy with their house.

The inspector they hired to check it found many metal hurricane straps had been twisted "for ease of nailing," which voids the manufacturer's warranty.

A year later, when inspector Robert Park performed a warranty check for the Avanzatos, he again saw improperly secured straps.

But Debbie Avanzato said most items noted by Park were minor and that U.S. Home has "been right there and fixed them."

Yet, when the Times surveyed 18 of the 38 members of the Suncoast Chapter of American Society of Home Inspectors, U.S. Home was mentioned more frequently than any other company as a builder with problems. Of the 10 ASHI members who named builders with undependable or poor construction supervision, nine named U.S. Home.

One of the nine was Ken Young, who was hired by U.S. Home as a quality control consultant. Young said he thinks the company is trying to improve.

Four ASHI members said U.S. Home tries to bar them from job sites so they can't inspect houses under construction.

"They do their best to keep me out," said Park, who owns Booth Building Consultants. After his report on one U.S. Home-built house was cited in a newspaper story, Park said, "I came back to the house for a recheck, and they met me there with an attorney.

"They said I was creating a liability for the company."

Young, president of Young Construction Consulting Inc., said the company came to him, seeking help on quality control:

"When U.S. Home said, "We're going to have this pilot program and see where the problems are,' I thought, "Sure.' But here I am, a year later and I'm still doing it."

Why haven't his suggestions eliminated defects in the company's new homes? "Because of the turnover in subcontractors and in building superintendents," Young said. "The turnover's great."

[Times photo: Joseph Garnett Jr.]
Termites ate their way into the shower of Lisa Stevens' Young America home in Pasco County. "Our entire house was gutted," she said of the work to remove damaged boards.

Neighbor by neighbor

Frustrated buyers often discover the same problems plague their neighbors.

Take the case of Marc Rutenberg's Homes for Young America.

Everything about them -- from the little boy's race-car bed in the model home to the move-in-cheap financing -- was aimed at first-time buyers on a budget.

His target market, Rutenberg once said, was: "One mom, one dad, two kids, one dog, one front porch and one picket fence."

What did buyers get for their money and inexperience?

Leaks, wood rot and termites.

In the summer of 1993, seven months after Lisa Stevens and her husband bought their Young America home in Pasco County, termites ate their way into her shower.

"The neighbors had pictures on their walls and the termites were eating through the pictures," she said.

According to court records, homeowners and workers on the Rutenberg projects, many, if not most Young America homes built from 1987 to the mid-1990s were defective -- that's hundreds of homes in Spring Hill in Hernando County, Wyndtree and Nature's Hideaway in Pasco County, Deep Spring and Patty Ann Acres in Pinellas County.

The problem wasn't solved until the construction technique was changed on the homes built in the Millwood subdivision of Pasco County and on about half the Young America homes in Walden Lake in Plant City, according to subcontractor James Maniatis.

"It was a disaster," said Phillip Beyers, Rutenberg's senior vice president until 1991 and a consultant for the company until 1994. It was Rutenberg's first time using vinyl siding. By the time the builder realized water was seeping into the wood underneath the siding and rotting it, hundreds of houses had been built.

"That was the hottest-selling house going," Beyers said. "Other builders were jealous of us. It was a house before its time in its architectural design and its look."

Though Rutenberg sent crews to fix the defects and the homeowners themselves spent plenty on repairs, some buyers still haven't seen the end of the problems.

Rutenberg did not respond to several telephone messages from the Times or to a certified letter sent to his office.

In a lawsuit he recently filed against Maniatis' company and a roofing subcontractor, Rutenberg said they were "negligent and careless" in their installations.

But Maniatis blames poor design and penny-pinching.

"I used to hold Marc Rutenberg in high regard," said Maniatis, president of Weld-Rite Railings in Hernando County. "I feel very sorry for these people. There's a lot of unfortunate families that have been hurt."

A gutted house

Stevens said she wanted to hire a lawyer, but other Wyndtree families were afraid: "You've got to lay out a lot of money. Financially, it was a biggie."

In 1998, she said, the repair crew started ripping away damaged boards in her house, with instructions to keep going until they found good wood.

"Our entire house was gutted," she said. "We had absolutely no (interior) walls in the front ...

"The bathtub sat in the front yard in the grass. I have three children. . . . We were living in turmoil. We had one bathroom. We couldn't eat food in the kitchen. We couldn't cook. We had to live like this for three months.

"They didn't even come back and clean the carpet. They were supposed to repaint. I haven't heard from them. I took them a list of all the (ruined) landscaping that had to be replaced. They never return your call."

Liz Anderson sees evidence of ongoing decay in her Nature's Hideaway home in Pasco County.

"I went to hang Halloween decorations last year and my hand went right through the wood" on the front porch, she said.

She and some neighbors "didn't know anything about the problems with the homes until it was too late," she said.

In her subdivision, Rutenberg built the Young America homes with his father, Charles, who in 1993 filed for protection from creditors in U.S. Bankruptcy Court.

"It was probably about four years into our homes being built before we noticed the damage problems," she said. "By then, (Rutenberg) was gone, out of the community."

In Pinellas County, residents of Deep Spring are finding problems as they redecorate or renovate their houses, according to homeowner Amanda Palmer.

"I've heard so many horror stories," she said. "One guy had termites so bad, he was almost crying. He . . . said he'd used all his savings" in repairs.

Wyndtree resident Ann Poole said she worries that some homes were short-changed on repairs.

"When they first started, they were really doing a super job in my opinion," she said. "But as (Rutenberg's) insurance company started to see how extensive this (damage) was, they started moving (the workers) on, like, "Do the basics and get out of here.' "

Many Rutenberg customers said the defects and the resulting damage have been fixed. But homeowner Randy Staniloiu called the repairs "a joke."

"Some laborer went around with a nail poking holes in the wood to find a soft spot" then told him his house had "surface termites," Staniloiu said.

"I called Rutenberg three, four, five times," Staniloiu said. "I called (the repair company) three, four, five times. They never called. I took care of everything myself."

* * *

In September, Rutenberg blamed the problems in Wyndtree on Bob Carroll Building Contractor Inc., the roofer, and Weld-Rite, the company that installed the vinyl siding.

In a lawsuit filed in Pasco County, he said 70 Wyndtree homes were missing flashing and drainage gutters, called J-channels, that keep water from getting behind the siding.

Carroll didn't respond to telephone messages from the Times.

But Maniatis, Weld-Rite's president, said the homes' cedar trim absorbed water. He noted that a roofline was placed in such a way that rain gushed down the roof's valley and onto a bay window.

Maniatis also told the Times he was instructed not to include in his bid any moisture-proof house wrap, which normally is placed between siding and the pressed wood walls underneath. The wrap, he said, would have kept the boards dry despite design failings, but would have added about $500 to the cost of each house.

"They have a market they are targeting," he said. "The (budget) numbers were a major part of that equation."

* * *

Vicky Hall's house in Natures Hideaway has been worked on three times, twice by Rutenberg. The third repair cost her $6,000 and her insuror $3,000.

She blames Rutenberg for the fiasco.

"He's now building homes in the $250,000 to $300,000 range," she said. "They're very nice homes, but I wouldn't trust him. He cuts corners."

-- Times researcher John Martin, research manager Steve Kircher and senior research analyst Diane Pflugrad Foley contributed to this report.

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