Numerous lawsuits, AG investigations against New England developer

By Deborah Goonan, Independent American Communities

home construction

New Hampshire Public Radio recently recorded a podcast and wrote an article about one of New England’s prominent developers, Brady Sullivan.

Paugus Woods modular home community, Laconia, NH, was featured in the report. According to the HOA community’s website, Paugus Woods consists of 93 modular “villa” homes, nestled on 47 acres close to outdoor recreation opportunities. Common interests of the community include conservation areas, as well as provision of maintenance services such as lawn mowing and snow removal, for a “carefree” living experience.

In 2014, the NH Department of Justice found Brady Sullivan liable for shoddy construction, failure to meet building codes, and making false statements in buyer offering documents. The developer was ordered to make repairs at his own expense, to offer to repurchase 5 homes with the most extensive damage, and to pay administrative fines to the state.

According to NH DOJ, defects included the following:

Among the defects repeatedly found were the failure to properly attach the modules to their foundations, violations of electrical, heating/ventilation codes, inadequate insulation and failure to properly fasten the modules together and to provide proper foundational support.

Despite the terms of settlement resulting from the DOJ investigation and lawsuit, property owners in other parts of New England continue to struggle with structural defects, mold from water infiltration, and environmental contaminants – all of them connected to the same developer, Brady Sullivan.

Here’s the report:

Complaints About Toxins, Shoddy Construction Trail New England Developer

In the Marines, Dan Crim learned how to strap an air-tight respirator over his mouth and nose to protect himself from a biological threat. He was glad to never have to use one in a combat zone during his five deployments overseas.

Now a retired Marine, Crim wears a respirator whenever he sets foot in the house he bought but no longer lives in.

In the garage of the one-story, pre-fab house, a wall calendar is stuck on June 2014, when Crim says the family finally had to abandon the home. Inside, Crim points to the white, green and black film that coats his children’s toys, family Christmas decorations and his old military equipment.

Read more, listen to PODCAST:


According to the same report, in addition to Paugus Woods, many other complaints have been filed and/or are under investigation:


In 2012 – less than a year after the State filed its lawsuit against the developer – the Evergreen Condominium Association in Laconia sued on behalf of approximately 70 homeowners, claiming Brady Sullivan left them with $1.2 million in fire, safety and structural defects.

Later that same year, more than 80 plaintiffs from Brindlewood Preserve Condominium Association in Rochester alleged Brady Sullivan sold them homes without disclosing the existence of asbestos, leaving them with $2.7 million in abatement and moving expenses.

When they spoke out about the problems, some homeowners allege Brady Sullivan’s lawyers bullied them by filing counter lawsuits.

Not all complaints make it to court. In recent interviews and emails to the Lebanon Planning Board, homeowners at a Brady Sullivan subdivision called Prospect Hills say their five-year-old homes are deteriorating from water infiltration while sinkholes are eating chunks of driveways. They also claim Brady Sullivan took more than $10,000 in management fees the developer was not entitled to.

Meanwhile, state and federal regulators have accused the company of repeatedly mishandling toxic materials.

The Environmental Protection Agency recently found Brady Sullivan responsible for creating the largest lead paint hazard in recent New England history and dumping a likely carcinogen in a suburban community.

Meanwhile in Vermont, the Agency of Natural Resources says it found a Brady Sullivan employee and contractor burning construction debris in a bonfire at Snow Vidda, a condo complex at the foot of Mount Snow.

In 2015, the Massachusetts Department of Environmental Protection and the EPA were considering a criminal investigation – according to emails – after regulators fielded a tip that a Brady Sullivan contractor had moved ten truckloads of asbestos and lead from New Hampshire and buried it in the basement of a Lawrence, Mass. mill owned by Brady Sullivan.

As you can see, there’s a long list of allegations against Brady Sullivan. But keep in mind that homeowners and tenants across the U.S. have also filed thousands of complaints against other developers, home builders, and construction contractors.

The NHPR report describes a similar pattern of circumstances faced by potentially millions of homeowners in the U.S. who have discovered serious construction defects that affect their personal health or safety. As the report points out, consumers also face retaliation from a developer when they threaten to sue or speak out in public about their negative experiences.

The problem is especially pervasive with high-volume developers, whose primary concerns are building homes and community amenities quickly and at the lowest cost possible.

When a developer is controlling an Association-Governed community (HOA), as is often the case, he has a significant shield against liability from defect claims that could include common areas as well as individual homes or condo units.The inherent conflict of interest should be obvious, yet state laws offer little, if any, protection for housing consumers that must navigate the minefield of filing defect claims against the person or corporation that also governs and manages their homeowners, condo, or cooperative association.

After all, HOAs have legal power to fine homeowners, place liens against their properties, decide whether or not to provide maintenance services, and collect assessments.

Let that sink in for a moment.


Consumers don’t fully recover their losses

Resolving construction defect claims through the legal process take several years. It involves extensive invasive testing and often requires homeowners to abandon their homes and move elsewhere to ensure their health and safety.

So even though the NH DOJ settlement offered a buy back of five Paugus Woods homes from Brady Sullivan, homeowners rejected that offer and instead pursued their own lawsuits in order to recover additional damages.

After all, during the many years they owned their defective homes, homeowners had to pay for alternate housing and moving expenses. They also had to continue paying property taxes, insurance, mortgage payments, and presumably, HOA assessments. In addition, mold and mildew had destroyed most of their personal belongings, adding replacement costs to the list of financial damages.

When construction defects arise in the common areas of an Association-Governed Community, property owners incur additional financial risks. Attorneys handling construction defect cases for HOAs on a contingency basis often recoup 33-40% of any financial reward. And many cases are settled out of court for less than total actual damages. The result: a special assessment to cover the gap between litigation proceeds and actual cost to remedy defects, or, alternatively, some repairs are delayed indefinitely.


The negative impacts of unskilled labor

Contractors working for Brady Sullivan have also filed legal complaints, claiming they have not been paid for their labor. NHPR interviews an undocumented immigrant laborer that claims Brady Sullivan owes him $20,000 in unpaid wages.

Part of the reason for alleged exploitation of the construction workforce is no doubt related to the underground workforce of illegal immigrants – day laborers or migrant workers – hired by homebuilders and their contractors.

Yet it’s worth noting National Association of Homebuilders (NAHB’s) policy on the issue of immigration. While the trade group states that it opposes illegal immigration, and favors establishment of a guest worker program, NAHB also “supports comprehensive [immigration] reform that…Ensures that employers continue to be held responsible only for identifying the identity and work authorization of their direct employees – and NOT their subcontractors.

But insurance experts say that shoddy workmanship is the result of hiring untrained and unsupervised contractors and subcontractors (many, but not all, are illegal immigrant laborers) to do the hard work of building roads, storm water drainage, and detached and multifamily residences. If homebuilders don’t track undocumented workers employed by their contractors, who will?

Not only does the underground construction market exploit laborers, it also exploits consumers by producing an inferior or defective product.


The most infuriating part of the NHPR report

Despite numerous complaints against Brady Sullivan and contractors working for the home builder, there has been no coordinated, comprehensive investigation that links dozens of individual complaints together.

The disjointed approach to enforcement of building codes, environmental standards, and labor laws has enabled Brady Sullivan to continue to building new housing projects, and to continue home sale and leasing activity. It’s business as usual.

Unfortunately for unsuspecting housing consumers, access to many of previously filed environmental, defect, and labor complaints and lawsuits is limited. That’s because so many of these cases have settled out of court with strict confidentiality agreements or “gag orders” threatening to sue Plaintiffs if they dare to share details about the outcome of their lengthy litigation.

Kudos to NHPR for taking the initiative to inform their listeners and home buying consumers in New England.

As for other homebuilders and other regions of the country: unless and until consumers are provided with public access to construction defect claims and the outcomes of litigation, buyer beware.

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