News Release

Consumer Group Releases Report Detailing Serious Gaps In Homeowners' Rights

CHARLOTTE—NCPIRG released the report, “Who Pays The Price For Faulty Construction,” at a press conference today with homeowners from across the state along with Tom Bartholomy, President of the Charlotte Better Business Bureau. According to the report, North Carolina homeowners lack the ability to protect their investments in the face of shoddy construction.

“Buying a home is one of the biggest investments a family will ever make, yet it’s one of the least protected goods on the market,” stated Rob Thompson, Public Interest Advocate with NCPIRG.

The report cites case studies from victimized homeowners across the state to illustrate serious loopholes in consumer protections. These loopholes too often mean that consumers are unable to hold builders accountable for faulty construction and correct the problems with their homes. Below are some examples from the report:

• The Richardson family from Indian Trail discovered defects to the foundation of their home nearly six years after it had been built. But because North Carolina only allows homeowners to hold builders accountable for building defects up to six years after construction is completed, the Richardsons are out of luck. “We ended up paying approximately $8,000 to repair our home and I spent countless hours redoing the bathroom, kitchen and hallway floors, because North Carolina’s short statute of repose didn’t allow us to hold our builder accountable,” stated Ben Richardson.

• The Burris family, from Charlotte, hired Ron Pierce to repair the foundation of their home. His work resulted in significantly more damage to the home. Ron Pierce lost his contractor’s license for a previous shoddy building job, but still managed the Burris project legally because it cost less than $30,000. In North Carolina, it’s legal for anyone to manage a job that costs less that $30,000 without a license. This means that a builder can be shown to be incompetent and negligent, as Pierce was by the NC Licensing Board for General Contractors, and still take on costly construction jobs.

• Two families, the Gilberts and the Daniels, have sued their builder for construction defects costing in the hundreds of thousands of dollars, but it’s unclear whether or not they’ll see any money because the builder can’t afford to pay for damages, doesn’t have insurance, or the insurance won’t cover the damages. Their next step would be to apply for relief from the Homeowners’ Recovery Fund, which is drastically under-funded and has an extensive wait list. In addition, county inspectors missed dozens of code violations in the construction of both homes. “Neither the builder or the county has taken responsibility for their negligence, so now we’re running out of money and we don’t even know if we’ll be able to keep our house,” stated Lisa Daniel.

“While North Carolina does not provide homeowners with adequate protections, there are some steps that consumers can take to ensure that they protect their legal rights and purchase a home that is well-built,” stated Thompson.

In addition to pointing out loopholes in state policy, NCPIRG also issued a set of recommendations for consumers in the market for a new home. These recommendations include:
• Thoroughly researching your builder with both the local Better Business Bureau and the Attorney General’s Consumer Complaint Division;
• Having your home inspected by a licensed private building inspector once after the house is framed and again before closing;
• Getting all correspondence with the builder in writing;
• Hiring a real estate attorney to ensure that you don’t waive any legal recourse to protect your investment.

“Homes are the nucleus of society; they are where North Carolinians raise their children and build their families,” stated Thompson. “Unfortunately, homeowners in North Carolina don’t have the ability to protect the most important investments of their lives.”

For a full list of policy solutions and consumer recommendations, please go to here for a full copy of the report.

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