Defects in Pulte's SC Sun City Subdivision

SC Stucco litigation website:SC Stucco litigation web site.

Stucco presentation: Homeowner's stucco presentation, detailing THOUSANDS of houses with stucco defects.

Sun City couple awarded $66,000 in stucco case by Michael Welles Shapiro of www.islandpacket.com.

First of many Sun City subdivision (Bluffton, SC) reap the rewards of taking on nationwide builder.

Nov. 21--A court-appointed arbitrator awarded a Sun City Hilton Head couple $66,000 earlier this month from the community's developer, Del Webb, due to improperly installed stucco on the couple's home. Del Webb is a subsidiary of Pulte Homes.

The judgment, issued Nov. 12, also states that legal costs incurred by the couple, Mary and Joe Oros, must be paid by the developer.

"This represents a total victory for the homeowners," said their attorney, Charleston-based John Chakeris, who has filed about 100 more lawsuits related to Sun City stucco issues.

However, Pulte spokesman Jon Cherry called stucco defects on the Oros home an isolated instance. He pointed out that a judge declined in April to hear Sun City stucco cases collectively as a class action suit.

In a letter to residents after the arbitrator's judgment, Cherry wrote that Pulte surveyed more than 2,500 homes to see if there was a pattern of cracked stucco.

"The survey determined that there are no widespread deficiencies in the stucco applications," he wrote.

But Chakeris told Sun City residents in another letter that homeowners with stucco problems who don't take legal action within three years of finding out about them could lose their right to collect damages.

Cherry responded, warning Sun City homeowners of "attorneys and their tactics as they try to create an atmosphere that encourages lawsuits ... with stories of their many and substantial victories."

Cherry also warned that a plethora of stucco suits could have the effect of negatively "impacting resale property values in Sun City Hilton Head."

He also stressed Pulte's reputation as a reputable builder.

"Pulte Homes/Del Webb takes pride in our reputation in the building industry and our track record of building high quality homes," Cherry stated.

Chakeris, however, still was celebrating what he said would be the first of many legal victories.

"I'm sure the Pulte people aren't very happy, but they made their bed and now they have to sleep in it.".

To Sun City Homeowners: A response to a submission which Pulte's President posted on Pulte's Community web site (to read Mr. Cherry's statement, please scroll to the bottom of this page) as a reaction to the Oros decision against it.

Dear Sun City Homeowner,

You may have seen a publication from Jon Cherry, Division President of Pulte posted on November 20, the gist of which is, as Shakespeare has one of his characters saying, "Lets kill all the lawyers." This tirade seems to have its genesis in the fact that Mary and Joe Oros, in the first of the stucco cases to be tried in arbitration, received a full verdict from the arbitrator, in an amount exceeding $66,000-a sum the arbitrator found would be necessary to completely strip and reclad their house due to the defective original condition of the stucco exterior as sold to them by Del Webb. The arbitrator specifically found that Webb breached its contract with the Oros, which called for a non-defective house, and that their house was absolutely not as warranted. Also, and this is what appears to have caused significant consternation, is that Webb placed in its sales contracts language calling for loser-pays in an arbitration, and since Webb lost, it is responsible for all of the Oros lawyers fees and expert witness costs - a figure which could easily exceed the award already handed down.So Pulte responds - shoot the messenger! Lets look at some facts when it comes to an analysis of what the truth is here.

Pulte says - we offered to fix the house.The facts: Pulte only offered any fix as a settlement of the lawsuit more than a year into it, and offered no attorneys fees or costs, and only a partial fix. Before Joe and Mary had lawyers, they asked for a repair - the result? NO! Pulte said their 2 year warranty had expired, failed to tell them about the South Carolina law of implied warranties, and said - Sorry! Without legal assistance, the Oros would even now have no repairs, nothing from Pulte.

Pulte says – houses are great.The facts: Pulte's OWN EXPERT, Applied Building Sciences, found defective stucco mixes causing corrosion in all the houses it tested - this in addition to the defective lack of control joints and lack of flashing found by the Oros experts in 250 houses examined.

Pulte says - this is all the fault of greedy lawyers, and their fees get paid and expert witness fees first.The facts: There are nearly 100 lawsuits already filed in Beaufort County by Sun City homeowners, not because of lawyers, because of defective houses sold by Webb/Pulte. In the Oros case, the lawyers fees and expert witness fees are paid IN ADDITION - NOT SUBTRACTED FROM the Oros full award.

Pulte says - you might be required to disclose the lawsuit in a subsequent house sale.The facts: The South Carolina Residential Disclosure law requires disclosure of this defective stucco - not the lawsuits which are designed to make the developer pay for it.

Pulte says - lawsuits impact resale values.The facts - defective construction, not lawsuits to correct it - impacts resale value.

Pulte says - we are terrific and receive awards.The facts - Pulte is also the subject of considerable litigation over defective houses as any student of the internet can readily discern. In one case in Nevada, a class action was certified against Pulte resulting in a settlement exceeding $21,000,000. In Sun City, the stucco problems aren't the only problems with homeowners' properties- a class action lawsuit alleges defective trim and, additionally, problems have been documented with roof trusses.

Pulte says - if a homeowner is concerned about a construction related issue, we will gladly evaluate the situation - The facts - Just as with the Oros, Pulte is careful to state their work - if any - will be limited to "all warrantable items." This means, just as with the Oros house, if it's 2 years old and the stucco's bad, you are out of luck with Pulte - It won't bother to explain that its sales contracts require it to sell an original non-defective home, and if it doesn't, it may have to pay for the complete fix, AND Attorneys fees, AND costs, including expert witness fees.

So, folks, lets look at the facts, not the diatribes against those who have brought Webb to justice and who are working hard to see that others benefit too.

The problematic homes have had poorly installed stucco and roofs, now foundations.

By RENEE DUDLEY, published Saturday, November 22, 2008

Description of photo above: Employees of Ram Jack Foundation Solutions of Columbia are working Nov. 6 to strengthen the faltering foundation of a home in Sun City Hilton Head. At left are some of the main tools used in stabilizing a foundation, called helical piers. The pier is twisted into the ground and used to support the foundation.

Pulte Homes now can resumemassive repairs to five houses in Sun City Hilton Head after obtaining the necessary building permits Thursday, officials said Friday.

Last week, the Beaufort County Building Codes Department issued a stop-work order against Pulte for beginning repairs to the foundations of homes at 18, 20, 22, 24 and 26 Old Country Roses without first getting permits.

The houses' foundations were cracked, likely due to improper soil compacting prior to construction, officials said.

"After these homes were constructed, Pulte/Del Webb discovered an isolated settlement issue ... ," Derek Morgan, Pulte's director of customer relations, wrote in a Nov. 17 letter to the county building codes department.

The repairs -- being done by the Ram Jack company -- cost $69,400 per home, meaning Pulte will pay a total of $347,000 to fix all five, according to permit applications Pulte submitted to the county Wednesday .

Pulte was fined $1,071 for starting the repairs without first obtaining building permits from the county. The fine was included in the $2,856 Pulte paid the county for the permits.

The homes are now vacant, and the five former homeowners have moved to other houses in Sun City , Pulte's local general manager, Jon Cherry, said last week.

Pulte now owns all five homes, according to Morgan's letter.

Pulte purchased two of the homes from the original owners in July and one in September, according to records from the Beaufort County Assessor's Office. Pulte purchased those three homes for slightly more than the original sales prices. Records for the other two homes were not up-to-date. All five houses are about two years old.

Ram Jack's repairs include installing 3-inch steel "piers" every 10 feet along the exterior of the foundation, according to a Nov. 17 letter to Pulte from a Ram Jack employee. Those piers are drilled deep into the ground.

Ram Jack lifts the homes and does work that is designed to prevent future dramatic settling, according to the company's Web site. Most foundation problems are caused by differences in soil moisture and drainage and by poor soil compacting prior to home construction, according to the site. The five homes along Old Country Roses are next to a lagoon.

The houses on Old Country Roses are not the only ones in Sun City that have had cracked foundations.

Ram Jack repaired two other homes near Sun City 's baseball fields within the past 18 months, Cherry said last week. Pulte did not obtain permits for those repairs, he said. The county said it was unaware of those repairs and would look into them next week.

In 1996, Del Webb removed six home foundation slabs and frames after a quality control check determined the houses might settle and crack on the improperly-prepared sites, according to a July 1996 story in The Island Packet. A spokesman said the houses had been built on unstable soil and tree roots that should have been removed, according to the article.

Last week, Cherry said he did not believe the problems of improper soil compacting and faulty foundations to be widespread.

Problems in SOUTH CAROLINA (PART 1): Roof Truss Problems in Sun City, SC.

Problems in SOUTH CAROLINA (PART 1a): An independent experts evaluation of the Roof Truss Problems in Sun City, SC.

Problems in SOUTH CAROLINA (PART 1b): Roof truss design and construction requirements; comments. John F Mann, PE 1212 Main St, Belmar NJ 07719 states: "I am a professional engineer licensed in NJ and PA, with 30 years experience in structural engineering. For Sun City, problems with connection of the VT (valley) trusses are an indication of more severe defects with design and construction."

Problems in SOUTH CAROLINA (PART 2): OVER 600 Pulte homeowners experience water intrusion and bad stucco = wood rot and mold! Sounds awfully familiar.

Jon Cherry's posted resonse:

Dear Sun City Hilton Head Community:

As you may know, a Charleston law firm recently issued a press release regarding the award of damages to a Sun City resident who claimed defective stucco application on their home. This arbitration was originally initiated as a class action relating to what plaintiffs’ attorneys’ claimed to be a widespread stucco issue in the community, but the class action was denied (order attached below) because the arbitrators found that the plaintiffs’ and/or plaintiffs’ lawyers’ interests were adverse to the interests of the other homeowners in Sun City Hilton Head. With regard to the single remaining home in that arbitration, Del Webb determined over a year ago that there was an isolated problem with regard to the mix of stucco on that home, and Del Webb offered to replace all of the stucco on the home (offer letter attached below.) The homeowner, through the plaintiffs’ attorneys, rejected that offer; and more than a year later the arbitrator found exactly what Del Webb offered -- that the stucco on the home needed to be replaced (order attached below.)

The same firm representing the plaintiff in the arbitration is continuing to encourage litigation by other residents at Sun City Hilton Head for what they claim is widespread defective stucco applications in the community. While Pulte/Del Webb recognizes everyone’s right to utilize the legal system, we see this action as both unfortunate and unnecessary. We work hard to deliver quality homes and intend to stand behind the homes we build. In fact, we attempted to repair the stucco on the plaintiff/homeowner’s home more than a year ago. The plaintiff/homeowner refused our offer, however, and has substantially delayed the repairs to his home.

After an initial claim was filed by the law firm, Pulte Homes/Del Webb hired a third-party firm to survey more than 2,500 homes in the community to determine if there was any frequency to cracking in the stucco cladding. The survey determined that there are no widespread deficiencies in the stucco applications of Sun City Hilton Head homes, yet the Plaintiff’s attorneys continue to encourage residents to get involved with what we feel is a fruitless lawsuit. Meanwhile, as many of you know, for some time now, the company has been diligently pursuing any repairs necessary on homes throughout the community—whether they are related to stucco or not. We’d like to thank the many homeowners who have expressed their satisfaction with Pulte/Del Webb and disappointment at the actions taken by law firms encouraging unnecessary lawsuits that jeopardize this community’s reputation.

We would also like to thank the residents who copied us on their letter to the plaintiffs’ lawyers telling them that they hired their own expert who determined that nothing was wrong with their stucco (and requested that they be removed from the plaintiffs’ lawyers list.) Unfortunately, we have found that in many cases, justice seems too seldom the goal, greed too often the motive and unhappy homeowners are too often the result of such unnecessary lawsuits.

If a homeowner is concerned about an issue related to the construction of their home, we will gladly evaluate the situation and address all warrantable items. If your home is out of warranty, or, the item identified is a maintenance issue, we are more than happy to provide recommendations for Sun City Hilton Head homeowners to conduct any necessary maintenance. Please contact Customer Relations at 843-705-8728 for assistance.

Pulte Homes/Del Webb takes pride in our reputation in the building industry and our track record of building high quality homes. Frankly, this is probably one of the reasons you purchased your home here at Sun City Hilton Head. According to the J.D. Power and Associates New-Home Builder Customer Satisfaction Study, Pulte Homes has received more first place awards than any other builder. We are proud of the communities we have built and stand behind the construction of the homes.

In the near future, you may hear more about these attorneys and their tactics as they try to create an atmosphere that encourages lawsuits. They may attempt to sway you with stories of their many and substantial victories. They may even try to frighten you by having their usual band of paid experts pontificate about the so-called defects in your home’s construction.

But what you won’t hear about is:

The negative impact of such a suit on your home and community; potentially impacting resale property values in Sun City Hilton Head.

How such an action takes many years to reach resolution and how Pulte/Del Webb will aggressively defend its reputation against any unfair claims.

The disruption and inconvenience homeowners may face as a result of inspections and destructive testing of their homes.

How any monetary result first is applied against lawyers’ fees and their "expert" service fees.

How the plaintiff attorneys take steps to eliminate communication between Pulte/Del Webb and homeowners; essentially not allowing us to perform any routine warranty work on a home engaged in such an action.

How homeowners may be required to disclose the lawsuit and the dubious "defects" alleged by the plaintiffs’ attorneys at the time they sell their home.

Having built more than 6,700 homes in this community and having recently opened a new Del Webb community nearby, we plan to stick around Bluffton for many years to come. Our reputation is our proudest asset, and our goal has never changed: to build quality communities. We continue to be committed to that goal and your satisfaction.

As we work to provide you with the most up-to-date information on issues that may arise in the community, we would like to share with you the arbitration orders related to this issue. If you are interested, you can read the full order denying the class action here, the full arbitration order on the single house here, and our offer to correct the stucco on the plaintiff’s house here. You can see for yourself our commitment to customer satisfaction.

Thank you for continuing to let us serve you at Sun City Hilton Head. If you have any questions, please let us know.

Sincerely,

Jon Cherry

Division President