By Deborah Goonan, Independent American Communities
A few weeks ago, Eastlake Village Condominium Owners’ Association notified homeowners that their HOA fees would double as of February 1st. This month, their condo fees shot up from $150 to $300 per month.
The condo association says it needs the extra money to repair persistent water leaks in dozens of housing units in the association. Each condo unit owner must share the cost of repairs, even owners who don’t have leaks in their own homes.
In 2015, Eastlake Village Condo Association filed a construction defect lawsuit against the developer, Holmes Homes, and several related contractors.
But then last year, according a report on KSL News, a judge dismissed the HOA’s lawsuit, leaving homeowners on the hook to pay for expensive repairs.
History of lawsuits against the builders
The name of Eastlake Village’s builder may sound familiar.
That’s because, in 2017, Holmes Homes and another builder in Daybreak, Hamlet Homes, were also sued by the Daybreak Townhome 1 Owners Association, another subdivision of the master planned community.
Townhome 1 is a 389-unit development, and its pending lawsuit alleges shoddy construction. The HOA is seeking money from the builder to repair leaky roof flashing, water intrusion around windows, and a lack of insulation.
In fact, according to a 2017 report, also on KSL TV, the HOA faces a $23 million special assessment to correct all of the defects.
That could cost each owner a whopping $63,000 per townhouse unit.
A third HOA, Carriage Home Condominium Association, also sued Holmes Homes on similar claims. Like the case in Eastlake Village, the court also dismissed Carriage Home’s lawsuit.
As usual, both Holmes and Hamlet Homes have denied responsibility for the defects, blaming the condominium HOAs for improper exterior maintenance.
None of the news sources reviewed by IAC indicate a reason for dismissal of construction lawsuits against Daybreak home builders and contractors. It’s unclear what role, if any, the HOAs’ action or inaction has played in creating damages they must now pay for, on the backs of homeowner members.
One thing is certainly clear — hundreds of relatively new homes are seriously damaged by water intrusion in roofs, walls, and around windows. Between rotting stucco and wood framing, the HOAs have no choice — they must act to prevent complete failure of building infrastructure.
What about consumer transparency?
If you’re considering a home purchase in Daybreak Utah, other than several brief TV news reports, you won’t find details surrounding the dismissal of lawsuits against home builders.
That leaves housing consumers to wonder why the HOAs’ lawsuits were so unproductive.
IAC did find this Better Business Bureau profile for Holmes Homes. It contains three negative reviews written in 2017, but you’ll note there no response from the home builder.
Reading the details of the BBB comments, consumers learn that Jeffrey Owens of Vial Fotheringham, the attorney for the Eastlake Village Condominium Association, sued not only homebuilder Holmes Homes, but also the developer, Kennecott Land Company.
For a few more tidbits, see the Daybreak Facebook Page. It provides a forum of very mixed homeowner reviews — including the following one:
And here’s another eye-opening post from 2016. The commenter compares life under HOA rule at Daybreak to ‘prison.’
Former copper mine
A little deeper digging reveals that Daybreak Utah is built on the former site of a very profitable copper mine. The former landowner, Rio Tinto Kennecott, sold off its land in Daybreak in 2016 to an investment company, Värde Partners.
According to one news release, prior to this transaction “Kennecott has also spent more than $350 million on the cleanup of historic mining waste and $100 million on groundwater cleanup” on the site.
Looking at the timeline, it appears that all three HOAs filed their construction defect lawsuits shortly after the investor acquisition.
Today, for better or worse, Daybreak remains very much under developer control.
Questions about water quality
In addition to the construction defect lawsuits, in 2019, dozens of residents in Daybreak complained of mysterious skin rashes. Affected residents have claimed their burning skin irritation is caused by elevated levels of chromium-6 in the Daybreak Community’s water supply.
That contamination, they way, was detected by home test kits.
However, last October, based upon resident concerns, the city of South Jordan conducted its own water quality tests, but found no elevated levels of the chemical.
Some residents doubt the city’s reported test results, and call for further testing.
New ‘infill’ construction at Daybreak
With the years-long history of poor quality homes, questionable environmental issues, litigation against builders and the developer, and resulting steep HOA fee increases, you wouldn’t expect to see even more new development in Daybreak.
But that’s exactly what’s happening, as Holmes Homes embraces the newest urban planning agenda to build ‘missing middle housing.’
Wedged onto an awkwardly narrow land parcel is Holmes Homes’ newest ‘affordable’ neighborhood, designed by architectural consultants at Opticos Design.
Known as Daybreak Mews Homes™, South Jordan, Utah, the community of sideways-oriented townhomes faces a narrow pedestrian walkway. The Mews homes are currently listed for sale in the range of $200,000 – $300,000.
But will the Mews homes remain truly affordable, given the rapid rise in condo HOA fees in older sections of Daybreak?
Daybreak also continues to see construction of new homes at the upper end of the real estate market, some with list prices approaching $1.5 million.
Connect the dots…
What can homebuyers and homeowners conclude from the limited available information about Daybreak Utah? What are the causes of Daybreak’s leaky homes and poor water quality? How much will it ultimately cost homeowners to correct these defects?
Are Daybreak’s multiple village HOAs and condo associations financially stable? If not, can they ever become financially solvent?
Will lenders be willing to write mortgages for defect-ridden homes and businesses in Daybreak? Will property owners have difficulty obtaining affordable insurance for their biggest investment?
Are the HOAs operating without influence or pressure from Daybreak’s current developer? When will the developer transfer control of the community association to property owners?
What does the future hold for homeowners? And will Daybreak’s HOAs really protect and enhance their property values?
Many unanswered questions. ♦
Daybreak HOA raises monthly payment 100% to cover building defects
By Ashley Moser, KSL TV | Posted – Jan 23rd, 2020 @ 7:31am
Trouble at South Jordan’s Daybreak
by: Marcos Ortiz / ABC4 Utah
Posted: Apr 13, 2017 / 12:03 AM MDT / Updated: Apr 13, 2017 / 02:53 AM MDT
Daybreak residents worried about contaminated water, South Jordan officials say it’s safe By Tania Dean, KSL TV | Posted – Oct. 21, 2019 at 8:55 p.m.