Builder left us literally "dangling"

This is a great forum! I've learned so much in the past few days of reading the posts and comments.

Here's my quandry. We are a relatively new community, 7 years old to be exact. In the past year we've had porches failing structurally. Railings have fallen off, boxing around columns has turned to liquid gooo only to expose a 2x4 bearing the weight of the porch roof (not pressure treated either), paint peeling, siding buckling. The list is overwhelming. A construction company gave the HOA an estimate of the repairs to all 181 townhomes. We don't have the funds necessary to finance these repairs. Several foreclosures and people just not paying have dipped into our funds. My question is this: is there any builder responsibility here? Mercedes Homes was the builder. Any and all comments would be appreciated.

Did I mention that I'm the NEW President of our HOA? lol

Sharon

Sharon - did your board establish a reserve fund years ago? Sounds like you need to ASAP, even though these items sound like structural violations. Was there an exam of the premises by a building engineer?

Safety is a real issue For liability sake, get the urgent items fixed, even if you have to take out a loan.

Sharon,

IMO, you need to find out if your state has laws regarding construction default litigation and if so what the statute of limitation is. In AZ the statute of limitation for construction default litigation is 8 years. Because this damage appears to be widespread throughout the community the HOA could bring a construction default lawsuit against the builder. I think it would be wise for the BOD to consult with an attorney.

Sharon,

Mercedes Homes is one of those mulitstate monster builders who slap up homes and the disapear from responsibilities. They ,like millions of other folks are having financial tough times. Good luck getting resolution with them

Sharon - I think the very first step is to see whether or not this is even an HOA issue vs. and individual owner/builder issue. Check your sales contract with the builder - ours specifically prohibits a third party from collectively intervening in individual sales contracts for remediation. Your first clue is to ask yourself whether or not the HOA is responsible for the maintenance of the defects you've listed.

Also as previously suggested, check state laws - look for a "Right to Repair Act".

Mary - All I meant by my post, is that even in the presence of builder defect state laws, she needs to determine who are the appropriate parties to the dispute. I realize that she mentions the HOA doesn't have the money to repair and I suppose that could imply that the HOA is actually responsible to repair, but I just wanted to make certain.

I've seen situations where, when builder defects exist across a number of homeowners, they - the homeowners - feel like it's the responsibility of the HOA to take on the fight. In fact the HOA may have no legal standing in the dispute, it may be a situation of multiple owners each individually have a dispute with the builder.

Robert,

The "dwelling actions" statutes clearly define what a dwelling is: "33-2001. Definitions. 2. "Dwelling" means a newly constructed single family or multifamily unit designed for residential use and property and improvements that are either owned by a homeowners' association or jointly by all of the members of a homeowners' association. Dwelling includes the systems, other components and improvements that are part of a newly constructed single family or multifamily unit at the time of construction."

So you see, the HOA can only undertake constructin defect litigation if the property is owned by the HOA, as in a planned community, or jointly owned with all the members of the assn, as in a condo. The members of the assn must agree to the litigation and also as to how the proceeds will be disbursed.

Hi Sharon – my 2 cents worth here. Susan made an important point which I think needs to be repeated.

Susan said: “Safety is a real issue For liability sake, get the urgent items fixed, even if you have to take out a loan.”

You stated:
(in regard to pursuing the builder) - “I just don't think we'll ever get anything, and if we do, the porches will have dissolved by then. The only answer is a special assessment. I honestly don't think this will pass. The reality is that we'll repair 1 unit at a time as the money is available. We are funding our reserves and hopefully the roofs will remain intact. With all the dishes on roofs there's concern.”

And in your first post, you said:
“In the past year we've had porches failing structurally. Railings have fallen off, boxing around columns has turned to liquid gooo only to expose a 2x4 bearing the weight of the porch roof (not pressure treated either), paint peeling, siding buckling. The list is overwhelming.”

IMO – those repairs addressing safety and structural issues must be addressed sooner than later (i.e., not 1 at a time as the money becomes available). If the buckling siding and peeling paint is allowing water to penetrate, you are (IMO) setting yourselves up for water damage if not also a mold problem in the future.

You, (the BOD) have a responsibility to address these issues. Should someone in your community get hurt due to a porch railing or porch roof failing, liability will be a huge issue.

Working with the appropriate structural engineer, I suggest you develop a plan for repair & funding for your townhomes. Then you need to present the issue and your plan to the HOs – highlighting the safety and structural concerns as the basis for the need to spend the money for this work. As Susan suggested, look into taking out a loan.

Another thought – you could request volunteers to form a committee with some Board members to develop the plan so that the HOs will feel they have some involvement (ownership). But, you need to fast-track this (IMO, based on your posts).

An educational campaign is needed to obtain support for a special assessment. If you can stretch payments out over some period of time, that will make it easier for your HOs – so include an estimate of the cost and an estimate of a HO’s monthly payment in the plan that you present.

Wishing you success as you move forward on this,
Bonnie

P.S. And, follow up on the great suggestions that others have made here! Your HOs will ask about these….