Can My Neighborhood Fight the Big Box Builder?

When a whole neighborhood has defects, how do you proceed?

Years ago, homes were typically built by local builders. Often, the builder wasn’t a company, but an individual. But today, as with most industries, big corporations have taken over. Homes aren’t built one at a time, but in large neighborhoods. And the homes aren’t constructed by Tom Smith, but by big companies – D.R. Horton, Ryan Homes, Clayton Homes, Lennar Homes . . .

As a result, many homes are part of large neighborhoods with homes that were built based on similar floor plans by the same set of subcontractors. There is nothing wrong with this, but it often means that when one home in a neighborhood has a construction defect, the others do as well. For example, if one home is experiencing water intrusion, other homes in the neighborhood likely have that same defect and are likely experiencing the same issue, whether the owner knows it or not.

This is where a simple construction matter becomes a complicated one. How do many homeowners in a neighborhood file construction defect claims? Should they do so individually, or all together? And how can a group of homeowners hope to succeed against such national and international giants as D.R. Horton or Ryan Homes?

It seems like a tall order – and it is – but it can be done. First, understand that there is an advantage in numbers. Construction cases are often expensive. An attorney representing the homeowners will almost always need to hire an expert witness – usually an architect or engineer. Often, it’s necessary to do so at the outset of the case, as state law sometimes requires an affidavit from an expert in order to file the lawsuit. The expert will then assist the attorney in preparing the case, often through inspections and destructive testing. The expert will be paid by the hour and contractors may need to be hired for the testing. This all gets expensive, fast.

Sometimes, the attorney representing the homeowners will agree to advance the costs of this work. However, the costs are reimbursed at the conclusion of the case. Consequently, it may be difficult for a single homeowner to justify such expense, since the recovery will ultimately be reduced by this cost. However, a group of homeowners can divide the expense, making it much more reasonable.

A good construction attorney can also take advantage of the similarities in the construction, performing destructive testing on a sampling of units rather than on all homes. This is another benefit of bringing a case as a group of homeowners, rather than as individuals.

It is sometimes advisable to form a Litigation Committee, among the homeowners. This allows the attorney to communicate with the homeowners in an efficient way – getting feedback on decisions about the case without having to reach out to every homeowner. The Litigation Committee then reports back to the larger group.

If you are a homeowner in a large community, or a member of an HOA, and you believe that your home has construction defects, reach out to a construction lawyer. The lawyer will typically not charge you just to talk, and you can consider whether your problem exists in the larger community, and how to deal with it.