Nightmares--Not Dream Homes, Say Owners Who Are Suing Builder

After falling in love with a split-level, Tudor-style model home at a development here called Sierra Sunrise South, Stephen and Nancy Whyte were taking no chances.

Stephen, 32, a semiconductor salesman, and Nancy, 35, a cellular telephone saleswoman, left their rented digs in Garden Grove and camped out in their compact car at the Sierra Sunrise office 12 days before the development’s homes went up for sale on Oct. 2, 1983.

First in line, they bought the house--their first--for $96,000. But on the the day they moved in, they found that the floor of the upstairs master bathroom, which projects beyond the first floor of the house on an overhang, had a “nasty slope” and the pipes leaked, among other things.

Other home buyers in the neighborhood, such as David Snow, 39, a production supervisor at Hughes Aircraft in Fullerton, also had slanting floors in the upstairs bathrooms. Snow said he also had popping noises from an adjacent wall that “sounded like cherry bombs going off.”

Complaints from the Whytes, Snow and others to Los Angeles-based Kaufman & Broad, one of the nation’s largest home builders with profits of $27 million in 1986, were met with what the homeowners said were disappointing solutions and a denial that anything was structurally wrong with their overhangs.

“Our dream house turned into a king-sized nightmare,” Nancy Whyte said. She has posted a “Keep Out” sign on the door of her upstairs bathroom, which a private consulting firm in February determined was unsafe and in danger of collapsing.

Now, the Whytes are among 70 owners of Kaufman & Broad homes who have filed three separate lawsuits against the firm. They allege that the company built defective, illegal and dangerous homes at the Sierra Sunrise development in Riverside and at a similar development in Corona.

Like the Whytes, the residents affected are mostly young, middle-class families from Orange County who could not find affordable housing near their jobs. They say that the sloping overhang makes their homes difficult to refinance or sell. “I’d get out of here if I could,” Snow said.

The lawsuits, filed in Superior Court in Riverside and U.S. District Court in Los Angeles, seek extensive repairs as well as undetermined damages for what one of the suits calls the “loss of use and enjoyment of their respective homes . . . property value . . . and of peace of mind.”

But the homeowners are not only in a legal battle with the developer. They also face possible action by city officials in Riverside and Corona who have the authority to order that they either fix their problem homes or vacate the portion affected by the alleged structural defect. Many homeowners have already moved their upstairs bedroom furniture away from the overhang and locked up bathrooms for safety reasons.

All of the homes in Riverside were inspected and approved by city Building Department officers, none of whom reported problems with the overhangs, said William Furey, a Riverside Building Department civil engineer. “There was an awful lot of building going on at the time for the staff we had,” he said.

Furey also said that although the developer filed plans with the city Building Department for homes with overhangs, those plans are now inexplicably missing.

The city building departments in Riverside and Corona are exempt from litigation under statutory immunities, attorneys for the homeowners said. Other defendants include International Mortgage Co., a subsidiary of Kaufman & Broad that financed the homes, and Home Owners Warranty Corp., which held the warranty against major structural defects on Kaufman & Broad’s homes.

Kaufman & Broad, which has denied that there are any structural problems with the overhangs, has nonetheless offered to do what it can to satisfy the homeowners’ concerns.

Thus far, it has provided additional “wing wall” supports beneath overhangs at 60 homes in Riverside and Corona, said Bruce Karatz, president of Kaufman & Broad.

“The fact that we put up those wing walls even before the lawsuits were filed shows where our heart is,” Karatz said. He added that he believes that the lawsuits were initiated by “virulent lawyers.”

Karatz also complained that since the lawsuits were filed, the developer has not been allowed to conduct a thorough investigation into the allegations of the homeowners.

“To resolve the problem, we need to assemble the best construction talent available and physically investigate each and every home in great detail,” Karatz said. “Until we are able to do that, it would be absurd and irresponsible to reach any conclusion about what the problem is or a remedy.”

Nonetheless, in June, 1986, Kaufman & Broad hired a structural engineering firm, Forbes & Manshadi Engineering of Tustin, to inspect 27 of the homes. Dale Forbes, owner of the engineering firm, said he was unable to determine the cause of the problem because the developer could not produce plans for the houses inspected and because the plaintiffs’ attorneys would not let him examine the framing inside the walls.

The complaints in Riverside surfaced within weeks after home buyers began moving into the development in 1983.

Snow, who bought his two-story home for $95,000, and the Whytes said they soon found themselves comparing notes with other homeowners, some of whom had already hung signs outside that read “Don’t Buy Here” and “My Kids Come From a Broken Home--a Kaufman & Broad Home.”

In response to the complaints, Home Owners Warranty Corp. hired a private consulting firm, Alpha Research & Consulting of San Diego, to inspect the Whytes’ home.

In a letter to the Whytes dated Feb. 6, an Alpha inspector warned: “The exterior ground area below and immediately adjacent to the second-floor overhang should be considered unsafe due to the risk of injury from collapse.”

“If that conclusion is right,” said Karatz, who said he has not seen the letter, “the Whytes should turn that house over to us immediately so we can fix it.”

“After what they already did?” Nancy Whyte asked. “I wouldn’t trust them with a nail and a hammer. They will never touch this house again.”

“They had their chance to inspect those homes,” added Allen Tharpe, an attorney representing the Whytes in the Superior Court suit. “By way of analogy, if a doctor operates on you and leaves a sponge in your stomach and you sue him for malpractice and the doctor then asks to go back and get it out, are you going to let him do it? It would be absurd.”