State and federal officials offer uneven help for home buyers with serious housing defects. In 20 states, no state building code exists, and in many rural and new suburbs there isn’t even a local one.
Even where building codes do exist, many local governments have lax enforcement. Home buyers can’t assume that officials have protected them by performing the required inspections. Building-department officials say they are understaffed and underfunded, and can’t keep up with permitting and code enforcement in areas where hundreds of new homes are being erected at a time.
In suburban Cincinnati, for example, the Enquirer newspaper reported this past June that in one county alone, at least 750 houses built between 1993 and 2001 lacked certificates of occupancy, which are supposed to prove that a home has been inspected and is safe to live in.
In New Jersey, state and county prosecutors have launched fraud probes into allegations that building officials in one county falsified reports on hundreds of homes in several large developments that were never inspected. Homeowners had long complained of faulty construction and poor sewage and storm-drainage connections.
Even where building codes do exist, many local governments have lax enforcement. Home buyers can’t assume that officials have protected them by performing the required inspections. Building-department officials say they are understaffed and underfunded, and can’t keep up with permitting and code enforcement in areas where hundreds of new homes are being erected at a time.
In suburban Cincinnati, for example, the Enquirer newspaper reported this past June that in one county alone, at least 750 houses built between 1993 and 2001 lacked certificates of occupancy, which are supposed to prove that a home has been inspected and is safe to live in.
In New Jersey, state and county prosecutors have launched fraud probes into allegations that building officials in one county falsified reports on hundreds of homes in several large developments that were never inspected. Homeowners had long complained of faulty construction and poor sewage and storm-drainage connections.
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Concerning home-warranty programs, which builders provide buyers to warrant certain home systems, only 10 states regulate the programs or post bonds to secure performance. They are Arizona, Colorado, Connecticut, Florida, Maryland, Massachusetts, Mississippi, New Jersey, Oklahoma, and Oregon.
And 23 states don’t regulate home inspectors. Some states have contractor-licensing boards; others do not. Licensing requirements also differ among states.
Governments have little incentive to make consumer protection a priority, say homeowner activists and government-watchdog groups. “Construction defects are a very political thing, and everyone wants to dance around that,” says Elizabeth Owen, executive director of the National Association of Consumer Agency Administrators, whose members are consumer-agency officials across the U.S. Builders, developers, and real-estate companies are among the most influential political constituencies, and often heavy campaign contributors. And new housing helps swell tax rolls.
Consumer-affairs departments and state attorneys general can investigate home-building fraud, but they usually don’t give such investigations high priority unless there are many victims. Local Better Business Bureaus take complaints, but can’t force builders to make repairs.
At the federal level, the Consumer Product Safety Commission regulates few housing components, and the Federal Trade Commission hasn’t filed suit against a builder for defective construction in more than a decade. Starting in the late 1970s, the FTC sued several big builders, including Kaufman and Broad Home Corp., the corporate predecessor to KB Home, one of the nation’s largest production builders. Whether the subsequent consent degree is being honored is an ongoing issue.
“Major structural damage that could have been avoided by reasonable steps beforehand was defined as an unfair or deceptive trade practice,” says Thomas Stanton, a former FTC official. Stanton says the lawsuits were meant to prod the home-building industry to reform itself. Since then, he says, “things seem to have gone in the wrong direction.”
In this vacuum of oversight, ad hoc groups such as Homeowners Against Deficient Dwellings, www.hadd.com , and Homeowners for Better Building, www.hobb.org , have taken the lead in the battle for home-buyer protections. On their Web sites, dissatisfied home buyers swap information about builders and remedies and call for better laws.
And 23 states don’t regulate home inspectors. Some states have contractor-licensing boards; others do not. Licensing requirements also differ among states.
Governments have little incentive to make consumer protection a priority, say homeowner activists and government-watchdog groups. “Construction defects are a very political thing, and everyone wants to dance around that,” says Elizabeth Owen, executive director of the National Association of Consumer Agency Administrators, whose members are consumer-agency officials across the U.S. Builders, developers, and real-estate companies are among the most influential political constituencies, and often heavy campaign contributors. And new housing helps swell tax rolls.
Consumer-affairs departments and state attorneys general can investigate home-building fraud, but they usually don’t give such investigations high priority unless there are many victims. Local Better Business Bureaus take complaints, but can’t force builders to make repairs.
At the federal level, the Consumer Product Safety Commission regulates few housing components, and the Federal Trade Commission hasn’t filed suit against a builder for defective construction in more than a decade. Starting in the late 1970s, the FTC sued several big builders, including Kaufman and Broad Home Corp., the corporate predecessor to KB Home, one of the nation’s largest production builders. Whether the subsequent consent degree is being honored is an ongoing issue.
“Major structural damage that could have been avoided by reasonable steps beforehand was defined as an unfair or deceptive trade practice,” says Thomas Stanton, a former FTC official. Stanton says the lawsuits were meant to prod the home-building industry to reform itself. Since then, he says, “things seem to have gone in the wrong direction.”
In this vacuum of oversight, ad hoc groups such as Homeowners Against Deficient Dwellings, www.hadd.com , and Homeowners for Better Building, www.hobb.org , have taken the lead in the battle for home-buyer protections. On their Web sites, dissatisfied home buyers swap information about builders and remedies and call for better laws.
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