Builders Will Pay Shangri-La Homeowners $3.1 Million
A group of builders has agreed to pay a total of $3.1 million to 101 homeowners in a Canyon Country housing complex who filed a lawsuit claiming they purchased substandard homes on unstable hillsides, authorities said Friday.
The Shangri-La Homeowners Assn. filed the lawsuit in 1993 after residents at the 134-home complex, built during the late 1980s, discovered problems ranging from sliding hillsides to leaking windows, said Gary Verboon, a West Los Angeles attorney representing the homeowners.
The settlement, expected to be approved by a Los Angeles Superior Court judge next week, allocates $850,000 to the homeowners association for hillside repairs and the rest to individual residents, Verboon said.
The lawsuit was filed against three developers: P&V; Enterprises in Sherman Oaks, which graded the site into housing lots; Raznick & Sons Inc. in Woodland Hills, which built 124 homes, and Haseko California Inc. in Los Angeles, which built the remaining 10 homes.
Representatives for P&V; Enterprises and Raznick & Sons said the homes were built to required standards and many of the lawsuit’s claims were false, exaggerated or unfairly blamed on the developers.
But Aaron Raznick, president of Raznick & Sons, said his company chose to settle the case to avoid the legal fees and potentially higher judgment costs of a trial.
“These lawsuits are extremely prevalent today when there are homeowners associations involved,” he said. “The end results usually are settlements of this sort whether [the developer] created any problems or not.”
About 40 companies subcontracted by the developers are paying about half of the settlement, Raznick added.
Verboon said none of the houses sustained major damage, but problems such as sinking fences and landscaping were an indication that the instability of the hillsides could severely affect homes.
The lawsuit also alleged more than 20 aspects of construction were faulty, including malfunctioning garage doors, noisy bathroom fans and kitchen cabinets that pulled away from walls.
