PA home builders refuse to fix hundreds of homes with wood rot

By Deborah Goonan, Independent American Communities

For the past year and a half, local media have been reporting on wood rot nightmares for hundreds of homeowners in southeastern Pennsylvania. (See Action News Troubleshooters investigates growing construction crisis)

According to reports, new homes were originally purchased from Toll Brothers, the Cutler Group, Pulte, K. Hovnanian, and dozens of other home builders in Bucks and Montgomery Counties. Most of the homes were built in the early 2000s, before the housing market bubble burst in 2008.

During the housing market frenzy at the turn of the millennium, home builders relied heavily on poorly trained subcontractors to meet tight construction deadlines. As construction crews hurried to build new homes, errors were made.

But local government inspectors were so inundated with work that they didn’t catch a lot of mistakes and builder-grade corner-cutting, especially when shoddy workmanship was covered up by walls and decorative finishes.

Fast forward a decade or so. Homeowners began to notice cracked stucco, mold and wood rot around window frames, and mushrooms growing indoors.

Some builders answered homeowner complaints by doing incomplete warranty repairs. Other claims were reportedly refused entirely, with the builder claiming the homes were out of warranty.

Gavel and legal books lawsuit court

Now Pennsylvania’s Attorney General is dealing with more than 600 homeowner complaints about homes that have been rotting from the inside out, even though the structures are less than 10 – 15 years from the date of construction.

Many of these crumbling properties were marketed and sold as “luxury” homes, with prices tags exceeding a half million dollars.

As reported by the Philadelphia Inquirer, the source of the wood rot problem is apparent poor workmanship, specifically, the failure of home builders’ contractors to properly apply waterproof flashing and siding materials such as stucco, brick, stone veneer, and vinyl covering wood framed homes.

The article is a long read, but very informative. It touches on many important consumer issues, and highlights the fact that PA homeowners are often not protected from poorly built homes or failure of builders to disclose hidden by known defects.

Rotting from Within. How water intrusion in new homes turns American dreams to rot.

Caitlin McCabe and Erin Arvedlund / Staff Writers
Thursday, Nov. 15, 2018

The U.S. housing market was only just starting to soar in 2001 when Mitch and Cheryl Goldstein plunked down $25,000 for an empty Bucks County lot.

The couple, entering their early 40s, had long been saving for their dream home — a brand-new, ground-up Toll Brothers house. Known even then as “America’s Luxury Home Builder,” the locally based national company brimming with industry awards offered the kind of quality the Goldsteins coveted.

So the Goldsteins eagerly planned: They chose skylights, upgraded to coffered ceilings, and envisioned a nursery for the little girl they hoped to adopt. Finally, they thought, in Toll’s new Buckingham Forest development, they would have the house they had worked so hard for. Even Robert Toll assured them of that.

“We take the responsibility of building your new luxury house very seriously,” the company’s cofounder wrote in a letter to new homeowners, including to the Goldsteins after they signed their agreement of sale. “Welcome to the Toll Brothers’ family.”

For years, it seemed, good fortune followed. The day they moved in, the adoption agency called with a match. Three years later, Toll was selling versions of their $446,000 home for nearly $150,000 more. They began referring to their home as their “little slice of heaven in Bucks County.” It was, Mitch said, all part of the dream.

That dream, however, turned out to be an illusion — and Toll, the Goldsteins came to realize, was no family. Rather, an invisible hazard had entered their house, damaging it from the moment the final stucco and stone had been laid.

The Goldsteins’ house was rotting.

And the damage was impossible to see.

Read more:

As referenced in The Inquirer, according to The Cutler Group’s response to a lawsuit filed by the PA Attorney General, homeowners face daunting challenges in compelling the homebuilder to stand by the quality of their homes.

Obstacles to justice for home buyers

A 12-year statute of limitations on warranty claims for construction defects is a huge problem for many homeowners.

Because wood rot and structural damage lurked behind exterior wall coverings, most homeowners didn’t even become aware of a problem until a few months after the warranty ran out.

And, to make matters worse, home builders such as Toll Brothers were allegedly aware of problems with water intrusion, yet they chose not to disclose known defects to home buyers.

Now Toll Brothers and other homebuilders are refusing to honor warranty claims beyond the 12 year limit imposed by current state law.

Some state Legislators are responding with an attempt to increase the statute of limitations by 5 years. No doubt, they will face stiff opposition to such proposals by home builder lobbies.

Another obstacle for homeowners is the fact that warranty claims only apply to the original purchaser of a new home. Indeed, according to legal documents, The Cutler Group continues to deny warranty claims to resale home buyers.



Playing by the home builders’ rules

Across the nation, many new home builders — especially large corporations such as Toll Brothers — require Arbitration to settle home warranty and defect claims, leaving the trusting housing consumer with no recourse in state courts.

One important fact not mentioned in other news: virtually all of these rotting Pennsylvania homes are governed by residential common interest communities. While homes were being built by untrained, unsupervised subcontractors, the HOAs governing these communities were controlled by the developer.

So the same people who were selling new, possibly defective homes were also overseeing the management of each community.

Imagine how much more difficult it is for a homeowner, under rule of the developer/home builder, to go public with complaints of defective exterior stucco or siding, wood rot, and mold.

The pressure to keep quiet about rotting wood frame homes is, in fact, enormous.

And, in the meantime, since few homeowners talked about the problem at first, home builders just kept on selling new homes and reselling existing homes to unsuspecting buyers.

For reference, a group of Toll Brothers homeowners have created a webpage with information for other homeowners who may be caught in the same trap.

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