Cracked-Up Homes No Joke for Hilltop Oceanside Residents : Real estate: Owners feel cheated over split foundations and exterior fissures.

Viljo Kaila is a retired ironworker who, fighting leukemia for years, was searching for a peaceful place to recuperate or at least live out the time left to him in comfort.

When the 63-year-old native of Finland spotted an advertisement with bold letters, “RETIRE AT THE TOP OF THE WORLD,” he thought his lucky day had finally arrived.

The ad got even better, touting, “Ocean view and ocean breezes are here in this spotless 2 bedroom, 2 bath home” perched on an Oceanside hill just north of Highway 78 and a few gracefully elevated miles inland from the coast.

He bought the house on Buena Hills Drive in May, 1989, but a year later, Kaila, saying he feared for his safety, abandoned his home.

Deep cracks jag across the floors and through the foundation. Walls and cabinets are out of alignment. The exterior stucco is laced with fissures.

He’s not the only one on the block with such damage.

At least four other neighbors in the 20-year-old development for people aged 55 and older are alarmed by similar cracking, and some claim they weren’t fully informed of problems when they bought their homes.

One neighbor, Mrs. Victor Dellamus, said, “If we ever get a good shake, the thing will come down around my ears.”

She added, “I called the city one time, and an engineer came out and said, ‘Yeah, you’ve got cracks all right.’ And that was it.”

Another neighboring homeowner, Phyllis Colby, said after she took occupancy in 1984, “I heard noises, and I thought the house was settling. I didn’t ask questions. . . . I adjusted” to the situation.

But now, Colby’s home is badly cracked, and she said she’s afraid to have the city come investigate, worried that she’ll be ordered to move out and continue making mortgage payments on a house she might not be able to sell or rent.

“I couldn’t find it in my heart to fix up a crack and sell it to someone else, unsuspectingly,” she said. “I couldn’t do what was done to me.”

So far, the city doesn’t believe there is a serious soil problem in the development of hundreds of homes, called Costa Serena.

But the homeowners disagree and soon will appear before the City Council to demand answers.

At Kaila’s urging, the city engineering department recently conducted a field check of the land around his home, but city geologist Diane Murbach said in an interview that, based on the examination, “we do not have (soil) stability concerns in that area.”

According to Murbach, the developer, Rosedale Homes, had obtained the necessary grading permits to do cutting and filling of the hillside in 1971.

“The developer did indicate things were built according to specifications,” she said.

The city’s file on the development has been lost, making it difficult for Kaila or anybody else to track its history. But Kaila doesn’t need records to prove what’s before his eyes.

He paid nearly $1,000 for a preliminary inspection by a private firm, Geotechnical Exploration, which found that “major damage observed at your property may be partially due to fill-soil settlement or the result of slope relaxation/movement or a combination.”

Further, the study concluded, “it appears that some soil movement mechanism is currently active at the site and was so prior to the sale of the property to you.”

That information hardly soothes Kaila, whose finances and health after battling leukemia for seven years are nearly gone. He said it will cost $75,000 to repair his home, an expense he believes should be paid by somebody else.

Nobody is claiming responsibility.

And Kaila never dreamed it would come to this.

He came to the United States in 1955 and lived in Los Angeles before buying the Buena Hills retirement house for $104,000 in 1989, moving in after receiving extensive treatment for his leukemia.

In the house one month, he discovered a narrow crack across the kitchen floor. Later, he found a 2-inch-wide crack under the refrigerator. He began exploring and pulled up the living room rug, where a vivid crack ran the length of the floor slab. (Several holes have since been dug along cracks to analyze the soil beneath.)

Kaila, who speaks with a heavy accent, said he called McMillin Realty, which handled the sale, and talked to broker Robin LaRue-Starr. “I say, ‘I want my money back.’ ”

Stunned by the damage and worried that the home could slip, Kaila moved out 10 months ago and borrowed money to buy a modest home blocks away, where he now lives. His Buena Hills dwelling is neither suitable for sale or as a rental, he said.

LaRue-Starr wrote to Kaila in early 1990 that the previous owners had refused his request to pay a settlement to repair the home because “they feel there was no damage to the property at the time of sale.”

In an interview, LaRue-Starr, who has since left McMillin Realty, recalled that the past owners did, as required by state law, fully disclose information about the property.

A copy of the sales document states, “buyers to be aware that a crack in the slab was repaired by the seller a number of years ago...” The previous owners also revealed in the document they were aware of soil problems.

According to LaRue-Starr, Kaila failed to heed a recommendation in the sales agreement that he have a soils inspection of the property. “It was disclosed to him that a number of years previous there had been a problem and it had been corrected,” she said. “There had been a problem and he opted not to have an inspection.”

Kaila acknowledges that he waived the recommended soils inspection.

“My attorney say I really done something not too good,” said Kaila. “I didn’t even read it. I was thinking I trust what they say (to encourage him to buy the house.) Everything looked so nice and clean.”

Despite the disclosure of problems, Kaila feels the magnitude and the specifics of the problems weren’t stated completely, and that rather than detail the slab work, the realtor distracted him by showing repairs to the back-yard patio.

“I didn’t even understand what is a slab,” he said. “They just show me the patio.”

He has filed a claim with his insurance company and is awaiting word whether his policy will pay for the damage.

Meanwhile, city geologist Murbach said there’s nothing the city can do to help Kaila. “That is a civil matter, not a city matter,” she said.

Kaila’s neighbors are waiting to see what happens to him, hoping a solution also will open the door to solving their problems.

Next-door neighbor Colby said “nothing was disclosed to me” when she bought her home. She said it took time for her to realize she had bought trouble.

“I should have suspected. When I moved in, there was indoor carpeting in the kitchen, not tile,” she said. Eventually, she noticed wall cracks that had been plastered over.

Outside, a vertical wooden support for the front porch is attached at the top, but the bottom dangles above the concrete. Colby said that, when she originally inspected the house before purchase, plants were stationed around the base of the support and she couldn’t see the damage.

“It showed beautifully,” she said.

Colby, unlike many home buyers, did not hire an independent building contractor to examine the house and check for defects. She explained that she presumed the house was sound because she had assumed an FHA loan.

At another home, Dellamas remembers that the real estate agent informed her and her husband that the home had been cracked but repaired. But the couple never expected the damage to be reoccurring.

Besides the cracking, she points to the den, which was added on and is now pulling apart from the rest of the house.

“Why fix it if it’s just going to start cracking again?” she asked. “You can’t sell it, you can’t rent it. I’m not even sure it’s safe to live in.”