Agoura Condo Owners Suing Builders for $17.5 Million
Residents of an Agoura Hills condominium complex beset by problems resulting from shoddy construction sued its builders for $17.5 million Friday amid charges that a carefully negotiated town house buy-back settlement has collapsed.
The action came hours after a deadline passed for developers of the 27-unit Westlake Villas project to repurchase the $100,000 dwellings from families who bought them without knowing they were built on substandard foundations.
The buy-back agreement, calling for the reimbursement of homeowners’ mortgage payments and other incidental costs, had been approved in March. Nineteen families who purchased the two-story units had wrangled for more than a year with developers and insurance companies over who was to blame for cracked slabs and sinking exterior walls.
Homeowners charged that the developers failed to ante up the approximately $30,000 that each family was to have received by a 5 p.m. escrow deadline Thursday. They also accused the builders of seeking to withhold $10,000 from each payment until the Agoura Hills units were vacated.
Some May Lose Thousands
The developers’ action will apparently cause some residents to lose thousands of dollars spent as down payments on new homes, said town house resident Bill Sluder, one of five owners who filed the suit.
“They told me to definitely go out and find a new house and I did,” said Sluder, an aerospace industry payroll manager. “I put $3,000 of my money into the new house and opened escrow. But, without the money I was supposed to get for my town house, I won’t be able to buy the new place.”
Said Diana Shulman, whose condominium unit is directly threatened by a collapsing wall in a next-door unit: “We’d felt we were getting our lives going again. We don’t know if we’ll ever get out alive now.”
The lawsuit, which alleges fraud, breach of contract and several other complaints, was filed in Van Nuys Superior Court by Arnold Gross, an attorney on the staff of lawyer Melvin Belli.
Several Defendants Named
Besides builders and engineers directly involved in the condominiums’ design and construction, the suit named the project’s lender, the Los Angeles County building inspector in charge of the project and a real estate firm that marketed its units.
Gross termed the attempt to temporarily withhold the $10,000 from each resident an “outrageous” violation of the escrow agreement.
But Frederick Tellam, a San Diego attorney representing developer Hilbert Chu, said such withholdings are necessary to guarantee that residents speedily move out.
“We have rights too,” Tellam said. “We said if they move out, they get their money.”
Tellam said Friday’s lawsuit was filed by the homeowners prematurely. “It’s a very complex problem, but the settlement hasn’t unraveled,” he said.
He said that various parties to the settlement worked Friday in a partly successful effort to assemble about $700,000 needed to buy back the units. Part of the delay was because of a routine hold placed by a San Diego bank on a check sent by one of the builders through an East Coast bank, he said.
Attorneys representing a dozen other town-house owners not involved in Gross’ suit could not be reached for comment Friday.
But Lee Maust, a medical services supervisor who is among the five owners who sued, said the new house in Palmdale he had hoped to move into in 10 days will probably escalate in value out of his reach if he cannot complete the deal before its escrow deadline. He said he cannot complete the down payment until he is paid by Chu and the others.
“I feel like I’ve been victimized twice by this--one moving into this place and now, trying to move out,” Maust said. “You go crazy out here after a while.”
