Jordan Fogal Responds To Your Comments About The Rotten Lemon Tremont Homes Sold Her

Jordan Fogal was heartened to see our post on her story and read your comments. Here’s her response to some of your questions.

Thank you Ben! Now how do I respond to these comments … they are the ones I usually get.

First: We did use a licensed realtor.

Two: We did not understand the true ramifications of arbitration, or it’s unfairness. No one who has not been caught in this snare does. We did not know that almost always big business wins. We thought it was like, OK kids lets sit down and not argue and fix this situation. We did not know the system was rigged. We did not understand the builders were repeat clients and the arbitrators meal tickets. No one understands arbitration companies are just the middle men. You still have to put on a trial and have all the costs associated: witnesses, subpoenas, expert testimony you even have to pay for the room to hold the arbitration in… We would not have had to pay a judge as we did an arbitrator or room rent or the astronomical fees charged by arbitration companies. Our arbitration fees alone were $9300. dollars. That does not include going to the kangaroo court where the rules of law no longer apply behind close doors. That was nearly $30,000 dollars…

3) We did have an inspector. Without invasive testing, he could not have know what was behind the freshly paint walls. Ask you builder if you can do a little destructive testing before you buy the house and see how far you get.

4) We did get legal advice. We are on our third set of lawyers. One advised us to go into foreclosure and bankruptcy and get on with our lives because in the state of Texas we would never receive any ration of fairness or justice. The builder’s lawyers know how to eat up your retainer before your check clears.

People make these comments because they still just do not understand. The public cannot accept that this can go on the this county and they have no recourse. The court house doors are blocked.

Those who run from trial prove their guilt.

If arbitration is so fair why is it mandatory?

Thank you for trying to help us all and informing the public.

Jordan Fogal

PREVIOUSLY: Tremont Homes Sells Rotten Lemon, Provokes Victimized Homebuyer Into Five-Year Consumer Crusade

Comments

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  1. BritBoy says:

    Jordan Fogal : “If arbitration is so fair why is it mandatory?”

    Well said.

    Any clause that, failing all other reasonable means including fair and transparent arbitration, prevents access to the courts can never be right.

  2. gibsonic says:

    so did they or did they not have a walk through and test all of the sinks, toilets and bathtubs?

    I’m still confused on that point.

  3. fluiddruid says:

    Please contact your Congresscritters! We need legislation to stop mandatory arbitration as a standard in contracts between individuals and big businesses. We don’t even need to prohibit it; we just need consumers to be informed of what arbitration really is. Companies that use it should be required to put, in bold letters at the beginning of their contract, “SIGNING THIS DOCUMENT INDICATES YOU ARE GIVING UP ALL RIGHT TO SUE AND THAT ANY DISAGREEMENT WILL BE SETTLED IN A COURT PAID FOR BY YOU, BUT WITH NO CIVIL OR CONSTITUTIONAL RIGHTS, AND WHERE THE JUDGE AND JURY FINDS AGAINST THE CONSUMER OVER 98% PERCENT OF THE TIME.”

    Then we’ll see what happens in the free market.

  4. mattrageous says:

    Just a thought. As I understand it, an arbitration company has to base their findings within the law. Can you sue an arbitration company for improper findings? or is there another clause with the company that prevents that?

  5. shfd739 says:

    I never knew arbitration would be that bad to the consumer. I hope she is one day able to get into court and win, if she had been allowed that right from the beginning this would be over, no judge or jury would have sided with the builder.

    I can see wher some people say an inspection would have found these problems but I dont agree. Yes you can run some faucets, play with lights etc. But if you run some water down the tub drain unless it is a tub full it is not enough constant volume to show up the problems.

    I cant beleive the comments on blaming the Fogals. They did everything right but the builder half assed a home and did a decent job covering it up.This is in no way their fault, that builder should be in jail for fraud or else at least filing bankruptcy himself due to all these homeowners sueing the hell out of him.

  6. Flynn says:

    Gee, when I wrote The Consumerist about doubts in seeing an arbitration clause in my newly opened IRA, I believe Ben’s response was, “Arbitration agreements are pretty standard in contracts these days. You’re probably fine.”

    If they can do this with your house, what can they do with your retirement money?

    Glad to see Consumerist waking up to the pure evil that are arbitration clauses.

  7. Buran says:

    Is there no way to get these people criminally prosecuted?

  8. CSchnack says:

    I’m a volunteer for a consumer advocacy organization and I see builder complaints every single day. In the last couple of years, in addition to shoddy construction, breach of warranty, and arbitration complaints, there have been predatory/fraudulent lending issues, particularly where the buyer used the builder’s in-house lender. There is no question in my mind that the industry professionals created these problems. Consumers didn’t cook them up, nor do consumers benefit from them.

    Jordan appears to have done more than the usual consumer advice suggests, before she bought. This is also fairly common to see people get ripped off even though they were very careful. One reason this happens is that construction shortcuts can be quickly covered up, so by the time your inspector sees the house nothing serious is observable. Also, consumer complaints are assumed by the public to be readily obttainable when doing research–they’re not. Some states and many BBB’s etc only divulge some complaints, and some divulge NONE. This is something many consumers discover only because their own complaint isn’t being made public. Then they realize they were misled when doing their research before they bought. Arbitration hides many complaints because it never gets past arbitration which is a private record.

    The best ‘single’ thing a home buyer can learn is to spot construction defects and shortcuts on unfinished homes. Check out the builder’s houses under construction. Do not buy from those that take shortcuts. In many areas of the country, the majority of builders take shortcuts that cost the home buyer thousands, even in violation of building codes.

    There IS no real protection on a home purchase. There is no sure-fire way to research a builder’s complaint history, and for those not online it’s essentially impossible these days. (Think senior citizens who never used a computer and are thinking of buying into a new seniors only development!) If there was good consumer protection and legal recourse we would not have all these horror stories, consumer advocacy groups, etc. I assure you that trying to make changes and educate people is hard work and there is no riches or glory in it, only our own expenditure of time and money. Take complaints seriously and consider yourself lucky to have found complaints before you buy. Many do not.

  9. kelbear says:

    It’s pretty ridiculous that arbitration could ever be allowed. It’s a circumvention of law!

    Dodging real courts so you can go into one bought by one party? How the hell did this crap become legalized?

  10. swordfish2eva1 says:

    I live in the same complex in the Fogals, trust me these houses really are as messed up as they say they were. Luckily our town home has not had any major problems but others have had equally horrible problems including rotting of the walls, backwards installation, etc. However most of the other residents of the community are probably a lot better off financialy then them and have had more luck getting their way. I wouldn’t say arbitration is stacked against you, but if you dump all your money into one house and you’ve got little left, you definitely are screwed

  11. gibsonic says:

    @shfd739:
    the builders are the scum of the earth…do doubt. they should more than pay for the cost of the house and arbitration this case.

    i think my take on it is that, ok, this situation is what it is. How can I and others not fall into this same whole again?

    that’s why there is a certain level of scrutiny into the actions of the Fogal’s. Did they do (or not do) something that I can learn from?

    In every situation there are(at least) 3 sides…
    – Side A
    – Side B
    – The Complete Truth

    Concerning the testing the tubs thing. By test i don’t mean trickle a little water down the drain. I’m talking fill it up and drain it at least twice per tub. There are other test such as bringing a couple hair dryers and testing every plug in the house.

    More sophisticated home testers can used specialized equipment to do density test in walls for example.

    Maybe the Fogal’s should implicate their home inspector for not doing a thorough enough job?!

    How did the home inspector not catch that the windows were installed upside down?!?!?!?!

    We are not getting the full story here.

  12. timmus says:

    Dodging real courts so you can go into one bought by one party? How the hell did this crap become legalized?

    Well, I agree arbitration is evil, but this practice perpetuates partly because consumers continue doing business with companies that uses arbitration, rather than seek out or demand alternatives. The only thing that can save this situation (besides making arbitration illegal) is widespread, widespread consumer education, and this is one reason I support Consumerist.

  13. E-Bell says:

    Sure, arbitration isn’t cheap – but neither is court. You think that just because you don’t have to pay for the judge (well, outside of taxes, anyway), that it would be a walk in the park?

    Litigation is expensive. I dare say that litigating this case would cost a good deal more than arbitrating it. Depositions, motions, court appearances, discovery, will all rack up those hourly fees faster than you can say “I should have had a lawyer read the contract before I signed.”

    Also, to pile on the victim: the Fogals keep whining about this, but the fact is that they WON the arbitration – an arbitration, if the Mother Jones article is to be believed, which the builder started. The Fogals refused to join in the neighborhood suits against the builder, instead choosing to complain to whatever agency would listen.

    I get the feeling that there is MUCH more to the story than “Oh, woe is me! Arbitration is beholden to teh ev1l corporations!”

  14. In every situation there are(at least) 3 sides…
    – Side A
    – Side B
    – The Complete Truth

    @gibsonic: Stick close to the Vorlon and look out for Shadows.

    I would check out the inspector too. It seems like some of these things should have been found even if the plumbing problems were missed.

    @swordfish2eva1: It’s amazing they keep getting away with it.

  15. Buran says:

    @E-Bell: But they haven’t gotten compensated for what they’ve been through and haven’t been provided with a properly-built home or a mortgage buyout either.

  16. Buran says:

    @Rectilinear Propagation: Who are you?

    What do you want?

  17. gibsonic says:

    @Rectilinear Propagation:
    you lost me with the scifi reference…had to look it up.

  18. asujosh1 says:

    So, now that we have established that arbitration is abhorrent, how do we get away from it? Do you just cross it out on the contract? Do you have to hire a lawyer to write you up a new one and then negotiate with the business?

    With everything from a cellphone contract to a home purchase agreement requiring it, how do we get away from them? Waiting for congress to do something is not really in anyone’s best interests, especially since their big money is coming from companies who are supporting binding arbitration.

  19. Flynn says:

    @timmus: I believe part of the problem is that in many cases there aren’t alternatives. Sure, you can always buy from individuals or builders that don’t have arbitration clauses, but they’re showing up in more and more places.

    I think my IRA example was important because there’s really no way you can do any banking these days without signing a contract roping you into an arbitration clause. And I suspect that someday we’ll see a bunch of consumers losing a bunch of money to a large bank. Imagine an Enron situation with a large brokerage or savings bank. I shudder at the thought.

  20. E-Bell says:

    @Buran:

    True enough; it sounds like they got screwed, but I’m not quick to jump on the “arbitration is evil” bandwagon. They had lawyers. The folks in their neighborhood who are actually suing the builders are doing so, I presume, in court. Even in states where arbitration is “favored” by the courts, there is sometimes at least some kind of opportunity for judicial review.

    All I’m saying is that there’s a LOT more to this story than we’re being told. The builder is (wisely) staying silent, so we’ll never hear its side of the story.

  21. ceasar11 says:

    If you have an arbitration cause in a contract which you want to
    challenge, the best thing to do is to file a suit in regular court
    anyway. it should be argued that the contract that you read was a
    contract of adhesion and you as a consumer would have been in no
    position to argue its terms, therefore a problem having arisen, it
    should be thrown out. Argue you were unsophisticated, argue they were a
    big business, argue that as an american citzen you have a right to your
    day in open court. Sue in court and then fight to keep it in the Court.
    They will have to prove to get it thrown out once you sue, so that will
    be their burden.

  22. WNW says:

    Where is the A-Team when you need them?

  23. killavanilla says:

    I’m curious -
    I remember someone once told me that no arbitration is truly mandatory because, in essence, it violates your rights as an american (jury trials, legal remedy, etc.).
    So how can this be constitutionally valid?
    Especially since it appears that the arbiters are bought and paid for by the company requiring arbitration….
    I’ll pose this question to my attorney (my dad) and see what he has to say.
    Keep on fighting Fogals! Don’t get discouraged.

  24. Keter says:

    I cross out any arbitration clauses I find in contracts, initial and date it, and get whoever is signing the acceptance to do the same. This removes the clause from the contract. The most I’ve gotten is some lip; no one wants to lose a sale enough to insist on it staying in there or no deal.

    I considered buying new when I bought my house six years ago, but frankly new construction was scary bad, so I quickly retreated to the resale market. I’m now happily entrenched in a 30 year old home that is literally made of solid concrete and steel, with a foundation that is dug into bedrock…not a single crack to be found. They literally don’t make them this way any more!

    I found as much wrong as my inspector did — I walked around with him and asked probably a thousand questions. Consequently, I have had no surprises except for the hash pipe that fell on my head when I was removing some bookcases that were hung from the ceiling — which also explains the many small weirdnesses with the place. Yes, this was the house that mary jane built! ;o)

  25. Buran says:

    @gibsonic: Babylon 5.

  26. chinadoll724 says:

    @E-Bell:
    Yes, they “won” the arbitration, but the amount they were awarded didn’t even cover the money they spent to get through arbitration, much less the damage to the house.

    Also, maybe someone can clarify for me. Since this the decision from arbitration is binding, does that mean once it’s done, they can’t sue at all? There have to be exceptions, so what are they?

  27. Buran says:

    @E-Bell: Actually, failing to step forward to fight claims like this makes you look like you aren’t arguing because it’s true.

  28. @gibsonic: Oh sorry. It’s the first place I’d ever heard it and the only place I’ve heard it since other than on the Internet.

    Consequently, I have had no surprises except for the hash pipe that fell on my head when I was removing some bookcases that were hung from the ceiling…
    @Keter: Too funny.

  29. magic8ball says:

    @ KETER: your house came with a hash pipe? Wow. They indeed do not build houses like they used to. :)

  30. lalawgirl says:

    Folks, jury trials are not free, either. A litigant demanding jury needs to not only pay for the jury but the court reporter, too. That can run close to $1000 a day.

  31. gibsonic says:

    @Rectilinear Propagation:

    i learned that all on my own after watch enough of my family’s internal drama. This is played out in nearly every single divorce that has ever existed. His, Her’s, The Truth. Life lessons 101.

  32. bambino says:

    @Keter: And they never did build them that way. Are you sure your house is ‘concrete & steel’? Are you in an International Style house? If it’s not mostly glass, it must be very claustrophobic. Bedrock? Surely you’re not serious.

  33. CSchnack says:

    There were a number of questions asked in the comments about how arbitration works. I can answer some with this general info:

    Usually private arbitration such as in a contract is not overseen by the courts, and the arbitrator does not have to follow the law or allow for discovery, etc.

    There is usually no appeal as it’s “binding,” but there have been instances where a BUILDER who lost appealed anyway.

    Usually the homeowenr fares poorly, because they can’t get quality legal help for such unprofitable endeavors, AND the arbitrators do repeat business with the industry.

    IF a homeowner gets an award of money damages in arbitration, they still have to collect, which may require going through the courts.

    The courts increasinly rule in favor of arbitration, even in cases where the arbitration clause or procedure is clearly unfair to the consumer and clearly advantageous to the business.

    If one wants to get out of arbitration they will have a separate court case, usually, just to get out of it…on top of their construction defect case.

    Assuming they do get out of an especially unconscionable arbitration clause, the court may still order them to arbitrate but with a supposedly more neutral arbitrator. Then the court steps out of it again.

    Yes, trials are expensive and there are many costs consumers pay even if their lawyer takes their case on contingency. At least a jury can be chosen though, and there are rules of court procedures that at least HELP ensure both sides play by the same rules. Expense of court is and has always been a deterrant to justice…however, taking that system and removing what has worked well, and replacing it with what favors one side, is not an improvement. PLUS, a court record is public so other consumers doing research can be forewarned. Arbitration is hardly ever public record.

  34. nequam says:

    @chinadoll724: No guarantee they would have done better in court.

    There are limited reasons to challenge an arb. decision. They include fraud, bias, and that the arbitrator exceeded her authority.

  35. E-Bell says:

    @chinadoll724: Well, yeah. Sometimes you don’t get what you hope for. Perhaps the award they did get was what it would truly cost to repair the home. There’s no evidence that they would have gotten a different result in court.

    Yes, binding arbitration is just that. Some jurisdictions will allow for some kind of judicial review, but usually when you agree to binding arbitration, you’re stuck with the decision.

    @Buran: Well, yeah. That’s kind of my point. Ya gotta assert your rights.

    @lalawgirl: What? Since when?

  36. gibsonic says:

    that’s it. i’m marking out any arbitration clause in any future contract i sign. they accept or i walk.

  37. Xkeeper says:

    Just a quick reminder:

    You can’t spell arbitratior without traitor.

  38. f3rg says:

    “Without invasive testing, he could not have know what was behind the freshly paint walls.”

    No, but you could have opened all windows (I figured this is quite typical), checked all the door hinges and turned on all the faucets, including the hot tub. Even as a renter, I’ve always done all these things before I accepted a place.

  39. @kelbear: “How the hell did this crap become legalized?”

    In theory, when it’s done right and done well, it’s far less expensive than court and allows for more creative and flexible solutions … particularly in situations where you may have ongoing contacts with the person on the other side and the adversarial process of court may sour the relationship (business or otherwise) forever.

    Unfortunately, mandatory binding arbitration between an individual and a corporation is rarely fair, rarely done well, and rarely done right.

  40. Buran says:

    @E-Bell: The account sure makes it sound like they weren’t even given a fair hearing given how someone with evidence, witnesses, prepared materials got beaten by an unprepared smug asshole with a binder.

  41. Skeptic says:

    “so did they or did they not have a walk through and test all of the sinks, toilets and bathtubs?

    I’m still confused on that point.”

    Are you or are you not trying to blame the victim?

  42. Hoss says:

    I’ve read the Mother Jones article. The best advice I can lend to Mrs Fogal is to bury this unfortunate experience before it burys you.

    (Glad at age 60 you discovered that some blacks and gays are nice.)

  43. JayXJ says:

    Eek! I think I’d consider spreading the litigation joy to that inspector. Surely SOME of this stuff was possible for a trained inspector to notice. We hired a home inspector for our recent home purchase. The man was very complete, testing plug-ins and wiring, plumbing, opened every single window, tested all appliances, roof, chimney, attic, etc… He made us aware of a lot of annoying little problems we were not aware of. We also had a mold and pest inspection done at the same time, the house was build in 1952 best to be safe. After watching these professionals work it is hard to believe that a COMPETENT inspector would find nothing. Unless…he got a kick back from the builder to dim his powers of observation?

  44. nequam says:

    @Buran: Except that they weren’t beaten by an unprepared smug asshole with a binder. They won.

  45. BlueModred says:

    Don’t hate arbitration too much. It can very very bad, as shown above, but it can be good too. Arbitration can be ALOT cheaper than going to court, especially when you, the little guy, are the one suing the big company. It also speeds up the process significantly.

    Obviously, in this case it’s not working out, but I have seen many where both sides appreciate the system…

  46. Edinboron says:

    Home inspection is a great scam. They aren’t liable if they miss things. Doesn’t matter how big a thing they miss, they aren’t liable. Don’t use the home inspector recommended by the realtor. The realtor is concerend with one thing….6%. If a home inspector finds issues with the house the price could go down. A realtor doesn’t like 6% of a lower price. A home inspector that cuts into the 6% too many times doesn’t get called by the realtor anymore.

    Get the list of recommended home inspectors from your realtor, then get a yellow pages and find the home inspector who isn’t on the prefered list. Call them, show up for the home inspection and remind them they are working for you not the realtor.

  47. ThinkAboutItPlease says:

    The more people have the “dream” of living in a “new home,” the less open space we all have — as the great majority of these new homes are built on former farmland or other former open space. I’m not too surprised to learn that businesses that push to build new homes are consistent in their evil.

  48. funkadelica says:

    Yeah… some inspector. I’m sure it takes a genius to discover rotten rusty bulbs and improperly installed windows, right? And by the time the FLOOR is about to CAVE IN there’s going to be something for an inspector to see.


    Binding arbitration sucks. What also sucks is the blind faith that people put in other people to tell them the truth about something they want to sell.

  49. slowinthefastlane says:

    I’m sorry, but if she did have an inspection, the inspector was piss-poor. He didn’t detect a bad bathtub drain. You can do that without an invasive inspection.

    The inspector we hired did just that – plugged the bath tub drain, filled it to the top, and released the stopper. This process was repeated for all sinks and the shower. By plugging the shower drain, he actually found a that the shower pan had a leak in it. We were able to get the seller to pay for the repairs. If the inspector had spent 10 minutes filling the bathtub and draining it, the 100 gallons of water would have come crashing through the ceiling before the contract was finalized.

    @EDINBORON

    I don’t know about other states, but in CA, anything negotiated during the inspection process usually doesn’t affect the home’s sale price or the agent’s commission. It’s usually returned to the buyer in the form of a repair or a credit at closing.

  50. troublz says:

    Having just purchased a home and going through the home inspection process, I learned a few valuable tips:

    1) Only use a certified ASHI inspector. ASHI is the most respected organization for certifying home inspectors. The inspectors must adhere to their standards and practices. Go to http://www.ashi.org to find some near you.

    2) Home inspectors look for mostly VISUAL defects. Anything behind walls or behind finished areas is not inspected. A good home inspector will explain this to you.

    3) Ours did run the all the faucets in the house and commented that they drained slowly but could only surmise the reason — he recommended getting a plumber out to do a more in-depth inspection if it concerned us. In the Fogal’s case, it could be a reality that he did the same but nothing happened.

    Like any other profession, it also depends on each inspector and how thorough he/she is. Our guy was meticulous — others are not — they do the basics. If your home inspection takes less than 1 hour for a small to medium sized house — then he’s not that thorough. All of this is regardless of whether it is new construction or an existing dwelling.

  51. BrockBrockman says:

    @BlueModred: Arbitration speeds up the process, but at what cost? So that the big company – who has most if not all key witnesses, smoking-gun documents and relevant information at their disposal – can rush you through the process with inadequate time to prepare? So that you can be forced to pay fees of up to $5,000 a day in arbitration costs?

    Consumers are usually on the losing end of every arbitration proceeding. In theory, it should work; but for now, it’s just not a process that is equipped to be fair to the little guy.

    Arbitrations are good for two parties that are dealing at arms-length, like two businesses. Notsomuch for the consumer.

  52. Jiminy Christmas says:

    If only they checked in on the construction progress. If only they had checked the plumbing a little more intensely. If only they had hired a better inspector…People saying these things are just deluding themselves into thinking they are so damned smart this sort of thing would never happen to them.

    Face it: even if you are a diligent and educated purchaser it’s next to impossible to cover all your bases when it comes to complex transactions like buying a house.

    I wouldn’t blame the inspector either. If a builder is determined to pass off shoddy work it’s not difficult to keep things looking good long enough to get by the building officials and inspectors.

    True story: A builder in my locale would lay the rebar for footing reinforcement, and call for the structural inspection. Inspector would come and sign off. The builder would then take the rebar out of the hole, pour the footing without it, take the rebar to the next job and repeat the process. The builder completed about 15 houses like this before he was caught in the act.

    The moral of this story is that there’s not an inspector in the world who could tell there’s a problem with that footing after the concrete is poured. No one would suspect anything until 3-5 years down the road when the house started to shift. Same with the pipes in the walls or the flashing tucked under the roof. If someone is bound and determined to cheat on these things there is no way to tell unless you catch them in the act.

  53. shelleyp says:

    For those defending arbitration, the solution is simple: ban mandatory arbitration, and if arbitration is such a great alternative, the parties can agree to use arbitration rather than the courts.

    See? Simple and everyone is happy.

    Odd, though, but I find it unlikely that Ms. Fogel would voluntarily choose this route.

    As for scratching out arbitration agreements, I’m assuming those of you who do this don’t have a credit card, cellphone account, internet account, cable or satellite tv, don’t fly, don’t go to the hospital, don’t get treated by doctors, haven’t interviewed with a larger company recently, not been offered and accepted a job, or bought a computer online. No matter how much you think you have control whether you’re covered by a mandatory arbitration agreement, trust me: you’re not.

    The only way you know for sure? Tell your congressional representatives to support the Arbitration Fairness Act of 2007.

  54. shelleyp says:

    Sorry, should have read:

    No matter how much you think you have control whether you’re covered by a mandatory arbitration agreement or not, trust me: you don’t.

  55. BrockBrockman says:

    @E-Bell: I agree — they both had lawyers, so this wasn’t a “poor little guy” getting screwed over by the big company per se. Having a lawyer can really level the playing field, as consumer attorneys are usually members of large lawyer organizations that can blacklist unfair arbitrators (the same way insurance companies blacklist arbitrators).

    But, courts typically have very little oversight over arbitrations. You can’t usually “appeal” to the courts if you don’t like how your arbitration turned out.

  56. MPB_WY says:

    People need to know and understand that contracts can be modified, as long as all parties agree, before they are signed and become binding. In other words, take your pen and draw big Xs across any clause you don’t want in your contract, including arbitration clauses. Then initial to the side. If the other party doesn’t accept your change, there is no contract. You are free to add and subtract whatever you like. Everything’s open to negotiation until all parties sign and the contract becomes binding.

  57. Buran says:

    @nequam: “Winning” doesn’t mean getting back less than you paid to “sue” them in fake court. Winning would be an apology, a full refund or mortgage payoff, and a replacement home or at least a down payment on one. At least.

  58. crankymediaguy says:

    Time to go outside the system here.

    *Post a walk-through video of the house showing all of the defects on YouTube.

    *Make a HUGE banner sign saying “This Tremont Home is a LEMON. Call xxx-xxx-xxxx” and put it on the roof. Set up an answering machine at that number with a message about your problems.

    Those ideas should get your situation some press attention, which is exactly what Tremont doesn’t want.

    If you need more than that, I’ll cogitate on it for you.

  59. Citoahc says:

    Did anyone mention a Home Warranty while you were buying the house?

  60. mac-phisto says:

    the problem as i see it is that this is not really a case for arbitration. arbitration generally seeks a middle ground – a compromise in cases where responsibility is convoluted. by weighing responsibility, an arbitrator will consider the parties’ requests for compensation & make a decision that benefits both parties in some way. this is how arbitration differs from the court system where rulings are generally weighted to one party or the other.

    with that in mind, how can the buyers of this property truly be at fault for its condition? they did their due diligence. they are not licensed contractors & should not be held partially liable for faults of the builder.

  61. quantum-shaman says:

    @troublz: Here’s something I learned on my first home buying experience: Don’t rely exclusively on the home inspector. Go through the house yourself because you may find things he missed, or things he isn’t “required” to look at. For example, in my first home there was a rotten spot in the sub-flooring in the upstairs bathroom, in a corner right next to the tub, from years of water leaking over the sides and through a crack in the tile that wasn’t really visible. If you stepped in the corner, you could feel it sagging under foot (which is how I discovered it). On the next house we purchased, I went through testing ALL the faucets, windows, switches, fans, and corners!

  62. gibsonic says:

    @Skeptic:

    i’ve already addressed your attempt at changing the subject.

    i personally can’t do much to help the Fogal’s in there situation.

    What i can do is help point out things that other people can and should do to help keep from getting in this situation in the first place.

  63. CSchnack says:

    CITOAHC you may not be aware of the problems with
    home warranties! They contain an arbitration clause, too, and have so many exclusions that they are “illusory” according to some attorneys. I have personal experience with a warranty co…they’re not worth the paper they’re printed on and are just a marketing tool IMO. One warranty co was using an arbitration firm owned by a disbarred lawyer.

    JRFORDS and SHELLYP I agree with what you said about builders hiding defects from inspectors, and arbitration being in everything. It’s frightening how many people think it’s so easy to avoid these problems because that kind of ignorance is how more and more people keep getting ripped off.

    It can take just minutes or hours to cover MAJOR structural defects. I recommend home buyers have their experts present during construction, too, but that presents a few impracticalities, costs, and a false sense of security. The bottom line on this is that the industry has to be babysat, adding to the cost of a house despite the industry’s smarmy rhetoric about how they care about “affordability.” When the industry says “affordable,” what they appear to mean is, “shortcuts.”

    To the people who said the Fogal’s inspector must have been bad or should be sued…guess what, there is an arbitration clause in most inspector’s contracts, too. Often, all you could recover is the few hundred you paid for the inspection anyway. Inspectors and in fact all in this industry are far less regulated or accountable for their mistakes than most consumers realize UNTIL they have this problem. That especially includes the people who think they’re too smart to get taken.

    BROCKBROCKMAN, re: your comment that having a lawyer levels the playing field. Theoretically it should but not all lawyers are skilled, in fact some stink. Working for a corporate legal dept is a nice job, pays well. Working for individual homeowners going after judgment proof builders in court OR arbitration is unprofitable for lawyers and therefore homeowners are often stuck with less than stellar legal help. IDEALLY, the home buyer hires a good lawyer before they buy, to make sure their contracts are not so one-sided. But that again adds to the cost of a house because of problems in the industry that should not exist on this level. These shortcuts are profitable to builders, and arbitration clauses help insulate the industry from liability. Lawyers know that.

    It’s getting ridiculous how many experts you have to hire (or become) just because this industry can’t or won’t build a house right.

  64. gibsonic says:

    while arbitration clauses may be infested into nearly any type of contract these days, it is relatively inconsequential for things like cell phones.

    People trust too much.

    When there is something significant on the line. Read and understand every last word or the contract. If you can’t understand it don’t just accept the honey glazed version the receiving end is trying to give you. Get your own independent counsel. It’s really not that expensive.

    “An ounce of prevention is worth a pound of cure”

    I don’t mean to keep sounding like I am blaming the consumer on this, but the only thing that seems to be helpful and relevant to this discussion for everyone not directly involved is how to avoid this situation from the beginning if possible.

    Once you are in it, you have to address your situation specifically based on the laws and circumstances of your ordeal.

    My sympathy does continue to go out to the Fogal’s. I hope that they can finally get the real restitution that they deserve.

    In the meantime, let us all learn something.

  65. killavanilla says:

    Some good points were made since I last checked in…
    A home inspector should have been able to find improperly installed windows (especially since it was reported that they were installed UPSIDE DOWN) and a host of the other problems this home faced.
    And there is a non-invasive way to check behind walls – my buddy had this offered to him and he declined it. Essentially, I believe it relies on an infrared or heat sensing camera that can check for leaks. Surely this would have spotted some of the leaky pipes that may have been the cause of some of the mold reported.
    While I am not blaming the victim here, I am starting to wonder a bit about this story – there are times when people turn to consumerist with their story and leave out big chunks of info or change the story a bit because they want to come off shiny.
    Am I saying this happened here? Not necessarily. I truly feel bad for what this couple experienced. However, something doesn’t fit here. I’m not sure why, but my BS detector is signaling. It’s a weak signal, but I’m picking something up.
    For instance, they knew they were bound by mandatory arbitration. However, arbitration requires that the arbiter is impartial – in other words, they cannot be a business partner of either party. And when an arbiter awards damages, they are not supposed to award amounts insignificant to the grounds of the claim. They claim over $150,000 in damages and in arbitration, which cost over $30,000, they are awared under $27k.
    How does that make sense?
    And they say that the builder was a business partner under contract with AAA. AAA is the American Arbitration Association. From their website:
    ‘Once a case is filed, parties may select from the AAA’s National Roster of over 8,000 impartial experts, or “neutrals,” to hear and resolve their cases. Recognized for their standing and expertise in their fields, neutrals, who are attorneys as well as non-attorneys, are nominated to the National Roster by leaders in their industry or profession. The collective expertise of AAA neutrals’ is wide-ranging–all have at least a decade of industry specific expertise in such areas as construction, employment, healthcare, real estate, technology and many others.

    The conduct of AAA arbitrators is regulated by codes of ethics that have been jointly developed with organizations including the American Bar Association (ABA) and the National Academy of Arbitrators; mediators must comply with model standards of conduct jointly developed by the AAA, the ABA and the National Association for Conflict Resolution.

    The AAA is a not-for-profit-organization with offices throughout the U.S. and in Dublin, Ireland. The AAA headquarters is in New York, New York. “
    That’s right, a not for profit governed by rules developed in conjunction with the ABA.
    So it’s clear that they were not under ‘contract’ with AAA. And it also appears that both parties get to choose the arbiter.
    Here is an explanation of some of those rules and procedures:
    [www.adr.org]
    So what happened here that would cause an arbiter with a minimum of 15 years of experience to award such a low dollar amount award?

  66. nequam says:

    @Buran: As others have commented, there is no guarantee she would have done better in court. We don’t know all the facts and we’ve only heard her assessment of the value of things. It may very well be that what she won was all she was entitled to.

    Calling arbitration “fake court” doesn’t advance the discussion. It is enshrined in federal and state law as an appropriate and enforceable way for parties to choose to resolve their disputes. It’s what she agreed to, which is why the court ordered her to pursue her claims there. We can argue all we want about whether arbitration is fair (always or ever) to a consumer, but you cannot sign something and then later claim you didn’t read or understand it. The tragedy here is that the woman hired a builder that turned out to be crappy, not that her contract required her to submit to arbitration.

    A point people are missing here is that she could have struck first by demanding arbitration for her claims against the builder. And it’s probably time to call bullshit on her claim that the builder has a contract with AAA. It doesn’t work like that. (oh, I see KILLAVANILLA just made that point very well).

  67. CSchnack says:

    I disagree with the statements that the American Arbitration Association is going to provide neutral arbitrators simply based on their org’s website claims. If website claims were all true, then these builders that advertise things like “100% Customer Satisfaction!” etc, would not have unhappy customers, but they do.

    When you are choosing from a pool of arbitrators it’s still a pool of people who do repeat biz with the industry…they don’t do repeat biz w/the consumer. Arbitrators are paid as that is their living…they are not in it for charity. Arbitrators/firms do court corporations for their business and I’ve personally seen documents on arbitration firms’ own websites touting how they protect the corporation. They compete for this business.

    Arbitration firms may call themselves a non profit but so does the Nat’l Assoc’n of Home Builders nahb.org and they clearly advocate for profits for their members and rake in lots of money for themselves. I am a volunteer for a non profit org. There is a world of difference between some “non profits” and it’s a shame the IRS doesn’t look into what some of these very well funded org’s do, such as spend millions on lobbying in Wash. D.C. every year. Some other non profits the IRS did look into were down payment assistance programs that essentially laundered money for sellers/builders when the buyer couldn’t afford it. The buyer ended up paying for it one way or another and the loans often went into default. The loan of course was sold before that happened, and that whole mess is now in the news daily, (foreclosures, subprime loans, etc). Don’t beleive all you read on these org’s websites as they are just promoting themselves like any advertorial text does. Dot-org or not, non profit or not.

  68. CSchnack says:

    Re: my previous post about down payment assistance programs as non-profits and the foreclosures that often result…I should add that I don’t condone buyers making foolish choices on home purchases they can’t afford. but really, the industry knew what it was doing even if the buyer didn’t! My main point was that as a “non-profit” arbitration org’s are more trustworthy as that term can be very misleading as can the arbitraiton site’s own text of course.

  69. CSchnack says:

    Good grief…meant to say “As a non-profit, arbitration orgs are NOT more trustworthy, as that term can be very misleading…”

  70. savvy9999 says:

    @Keter: I have to agree that buying an older, solid house is the only way to avoid this mess. If it’s been there for 50, 75 years and hasn’t fallen down yet (but needs a little bit o’ TLC & updating), then it will be enjoyable by you and yours for another 50. Again, thorough inspection by a neutral party is key– find out about asbestos, aluminum or knob wiring, where the lead paint is, how old the plumbing is, neighborhood flooding history, etc, and at least you’ll feel secure in knowing 99% of the story of your investment.

    I’ll take the quirks and well-documented possible issues of a quality pre-existing home, than the complete unknowns (mold? no rebar? weak floor joists? bad PVC plumbing joints? Built over a recently filled-in wetland that may flood during the next month of rain?) of whatever passes for new construction today.

    IMO, one of the great coverups of real estate is the underestimation and under-disclosure of the real risks in buying or building a brand new home. I’d say about half of all builders, developers, and RE agents are slimy and could care less about quality, then are in it for the quick $, and the next deal. Don’t fall for it.

  71. monkey-knife-fight says:

    Jordan needs to call Mike Holmes and talk him into moving down to Texas.

  72. nequam says:

    @CSchnack: I agree with you that non-profit status does not equate with good intentions. However, you are confusing the AAA with the arbitrators themselves. The AAA merely facilitates. The parties select the arbitrator. This is an important point. In other words, Ms. Fogal here had to approve the particular arbitrator. This arbitrator apparently found that the builder had committed fraud. That is a serious finding and sort of undermines Fogal’s insinuations of unfairness. She might disagree (and you might as well) with the amount of the award, but there is absolutely no suggestion in anything she has written that the calculation was the result of anything improper.

  73. killavanilla says:

    @CSchnack:
    You are incorrect in saying that AAA is in any way shady.
    They are a not-for profit oversight agency that assists both parties with finding and retaining arbiters.
    Additionally, arbiters are NOT in the business to repeatedly work against the consumer for one particular company. Doing so would violate the statutes and regulations requiring that arbiters are non-partial.
    Arbitration firms are definitely for profit, but the AAA is not an arbitration firm. Plus, both parties have to agree on the arbiter, hence your argument is off a bit.
    Yes, some non-profits are shady. However, the AAA is not one of them. They are like the ABA for arbiters. Or like the ‘ama’ for dcs. or the Real Estates Association for realtors. They enforce policy and ensure that arbitration is done according to a certain set of standards.
    The reality is that something here isn’t being mentioned. Why would the arbitration result in a finding against the builder without awarding proper damages? What motivation would the arbiter have to undercut their ‘well documented’ damages unless he had a good reason to do so? Arbiters are paid for their work and do not (they are not allowed) to get a kick back from either party. Why wouldn’t they have every motivation to award full damages if they found for the homeowner?
    I’ll say it again – the more I think about what I’ve read and research on my own, the more the foul smell of BS creeps in.
    Something is being left out. Did the arbiter find the damage claims to be fraudulent? Was the builder able to show that some of the damage wasn’t due to faulty building, but rather improper usage?
    I just looked it up – the average bathtub hold 52-54 gallons of water, yet in the original post the couple stated that ‘100 gallons’ of water crashed through the ceiling. How did that happen? Is there bathtub twice the size of a normal bathtub? Most jacuzzi tubs top out at 70 gallons or so. HUGE jacuzzi tubs (not exactly standard fare for third floor new construction done by ‘shoddy’ builders) hold over 100.
    Water weighs 8.3 pounds per gallon, meaning that her 100 gallons of water weighed in at 830 pounds. Add a 200 pound man and you are looking at a weight over half a ton.
    That seems like a bit much to put on a third floor, no? Recommended safe load on flooring is around 40# per square foot live load. A 6*2 tub works out to an acceptable load of around 480#

  74. Sudonum says:

    @CSchnack:
    When you state “you may not be aware of the problems with home warranties!” I believe you are talking about a purchased warranty on an existing home. I am a small builder in Louisiana. I am also licensed in Florida. In both of these states the legislatures have enacted new home warranty laws that protect both the buyer and the builder. Here is a link to the LA statute [66.0.100.36]

    Notice that it states that:
    “The parties may provide for the arbitration of any claim in dispute. Any arbitration shall comply with, and may be binding only to the extent provided in R.S. 9:4201 et seq.”

    It does not require arbitration. I do not have an arbitration clause in my contracts.

    I also do not appreciate your generalization:
    “The bottom line on this is that the industry has to be babysat, adding to the cost of a house despite the industry’s smarmy rhetoric about how they care about “affordability.” When the industry says “affordable,” what they appear to mean is, “shortcuts.”

    I do not have to be “babysat”. I build affordable housing for first time home buyers. I sell houses that appraise for $3-5 per SF over the sales price, thereby giving buyers built in equity. I was installing hurricane straps and 130 mph windows in these starter homes here along the coast before code required it. And my homes are selling between $165k – $200k depending on square footage. I’m not getting rich, but I living comfortably and am building a loyal customer base.

    The NAHB represents the industry, just as many other trade associations do. My dues go to pay the salaries of the officers and employees and pay for lobbying efforts on their (my) behalf. After all the bills are paid there is no “profit”. Hence the term “Non-Profit”. So I am not quite sure what you meant when you stated they “rake in lots of money for themselves”. They are not a charitable organization. But then again not all charitable organizations are very “charitable” either. And the membership of the NAHB consists of more small builders like me than large corporations like Tremont or say K & B and their ilk.

    The bottom line is home builders are just like the general populace. There are some nice ones and there are some jerks and assholes. You don’t have to babysit your builder. Just do some research, like checking with the Contractors License Board in your state or the BBB and avoid those builders that have actions pending against them. Search county records and find people that bought homes from them and ask those people how they like their house. You don’t have to become an expert, just do some homework. I just googled “Tremont Home” and found this site [www.hobb.org] along with links to this story.

    Like everything in life, all it takes is a little due diligence.

  75. mac-phisto says:

    just for ther ecord, there is a VERY BIG DIFFERENCE between a NON-profit organization & a NOT-for-profit organization.

    please do not use them interchangeably. NON-profit tax designation is reserved specifically for charitable organizations, religious groups & such. NOT-for-profit simply defines an organization as not FOR-PROFIT (as the term implies). typically, industry organizations are not-for-profit as their members pay dues to cover their operating expenditures, but the organization itself does not generate a profit for owners or shareholders.

    famous example of a NOT-for-profit organization: RIAA.

    incidentally, neither distinction mandates that a party should be trusted. philanthropy scams are as old as charity.

    & one final note: usually mandatory arbitration clauses reserve the right of “arbitrator choice” for the party mandating arbitration.

  76. mac-phisto says:

    NON-profit =/= NOT-for-profit. please do not use the terms interchangeably as they are not interchangeable. NON-profit designation is reserved for charitable & religious organizations (& the church of scientology). NOT-for-profit just denotes a business as not generating profit.

    example of a famous NOT-for-profit organization: RIAA.

    even so, the AAA’s tax distinction says nothing about whether it truly is a fair industry organization.

    & arbitrator choice is usually reserved for the party that concocted the mandatory arbitration clause in the first place.

  77. mac-phisto says:

    sorry for the dp.

  78. Jiminy Christmas says:

    @killavanilla: First of all, it doesn’t really matter whether there were 50, 70, or 100 gallons of water in the tub. The article states that the tub drain wasn’t connected. I’m sure what happened is that the water filled the ceiling cavity until the weight broke through the drywall.

    Second of all, when you go looking stuff up you have to be careful. ’40 PSF live load’ is actually shorthand for ’40 PSF uniform live load. That means the load is calculated over the entire span of the structural members supporting it, not just, in this case, the piece of floor directly under the tub.

    A minimally-sized full bathroom is 5’x8’=40sf, ergo 40sf x 40psf live load = 1600lbs. A large master bath, 8’x10’=80sf x 40psf = 3200lbs. In reality, the floor of that bathroom likely shares members with other rooms, thereby spreading that load out much further. Lastly, live load is only one variable in a structural calculation that includes several other factors and multipliers, so it’s not like the floor goes crashing down when you hit 41psf live load.

  79. infinitysnake says:

    @magic8ball: Might be common…my mom’s condo came with a crack pipe in the kitchen cabinet, and I found someone’s coke kit in my bathroom when I was installing a light.

  80. killavanilla says:

    @jrford8:
    Good points all.
    But why wouldn’t an inspector be able to tell that a tub drain isn’t connected?
    Isn’t that their job?
    I still don’t buy the story.
    And I understand the whole live load thing, but the bathroom also holds people, sinks, cabinets, etc. My point was that 100 gallons is an example of possible proof of exaggeration. If someone is willing to exagerate a small part of the story, what else are they willing to exagerate?
    Thanks for the info. Very enlightening.

  81. MrEvil says:

    I feel for the Fogals posistion on this. My mother purchased a house whose previous owners had hidden a VERY serious mold problem caused by a spring that had developed underneath the house near the furnace. She hired an inspector on her own whom had nothing to do with the realtor nor the previous owners. Unfortunately the inspector is only going to catch so much that’s wrong with the property. The house is uninhabitable and she’s spent an additional $15,000 getting a mobile home moved onto the property and hooked up. It was a good thing the house sat on 10 acres.

    She’s never going to get a cent out of the previous owners (who skipped town) nor the guy who inspected the house. She’s stuck paying for a house she can’t live in.

    The thing about binding arbitration is, if the guy you’re dealing with wants it. Odds are there’s a good reason for it and that should be reason enough for you to walk away from the deal. An honest builder shouldn’t need to tie one hand behind your back should problems with your house come up. It might take you longer to find a builder that doesn’t pull this bullshit, but its in your best interests in the long run.

  82. willlitigateforfood says:

    I’ve gotta say that she got hosed on this deal.

    That being said, she (1) signed a contract she didn’t understand (2) didn’t get a lawyer to help her understand it (3) didn’t pay the bill for arbitration (4) didn’t get comprehensive home owners insurance (5) repeatedly fired her lawyers.

    I’m not saying what the builder did was right, but you have to take some responsibility for making the situation worse.

    As a side note, arbitration and the AAA have been around a long time. The AAA is very well respected in the legal community. Calling it a “Kangaroo Court” and “rigged” I think is terribly unfair.

  83. jg53 says:

    Contracts of this nature should not be so difficult that all citizens in this country need a lawyer to execute a sales agreement – and 70% of the American people cannot afford one anyway.

    As far as comprehensive homeowners insurance, are few that cover the extent of the damage she experience on a ‘new property’ since the ‘warranties’ in some states are supposed to be ‘good’ for two years, at least.

    And ‘privatizing’ the courts and legal system by industry attorneys really not ‘kosher’ to begin with.

  84. David Millar says:

    It’s really sad that she’s in this situation. Best of luck.

    For those of you in the comments stating that a case in court would be way more expensive than arbitration, this reminds me of the figurines from the game Legend of Zelda: The Minish Cap. If you choose to pay more, you are likely to have a more favorable outcome. Not to mention she could sue for court costs too…

  85. Boberto says:

    @nequam: Let’s see, $30k in costs and a less than $30k award. And it took how many months? Yeah, they won. Sure.