Monday, May 5, 2008

Hyde Park by Tremont Homes (Stature Construction) Issues in the Houston Housing Market

For years, neighbors in a stylish Montrose cul-de-sac named Hyde Park Crescent fought to get something out of the developer they claim failed to fix faulty windows, water-soaked balconies and defective roofs that spawned leaks, mold and rot in their nearly new $350,000 homes.

Families alleged in a lawsuit that they were sold flawed town homes and then stuck with thousands of dollars in repair bills. They also contended that the men behind the company committed a kind of corporate identity fraud to avoid responsibility and keep right on building on other fertile ground in construction-friendly Houston.

Over the years, the builder, and other companies associated with it, have left a trail of documented damages and unresolved consumer complaints involving at least four other Houston housing developments, according to documents reviewed by the Chronicle, including lawsuits and Better Business Bureau and government records.

Texas laws offer minimal recourse for homeowners, and their complaints often drag on for years with disappointing results, advocates say. Some owners lose money fixing their homes or lose their homes because they can't afford to fix them.

Jordan Fogal, a homemaker and autobiographer who lost her Hyde Park town home to foreclosure, eventually won a finding of fraud against the builder, Stature Construction, in a costly arbitration proceeding that further depleted her retirement funds.

A neighbor, Susan Ellis, pursued a lawsuit that forced the company into settlement negotiations — after a four-year fight. Ellis and her husband were joined in their suit by four other families at 1515 Hyde Park Blvd., where nine of 44 units built in a tight 2 acres off Waugh Drive have been lost to foreclosure since 2003. The Ellises alone have paid $50,000 in repairs.


'We tried to fix things'
The Ellises and two of the other families recently settled for confidential amounts, their lawyer, William Ferebee, said. The other two couples expect to go to trial in May.

But the builders have never paid Fogal and her husband the $37,308 that an arbiter awarded in October 2006, according to the Fogals and their attorneys.

"I always wondered what life would be like in our sixties. However, I never envisioned ... being homeless, a restraining order against us, being sued ... and having to share a closet," Fogal wrote in one of several online journal entries she's penned about her experience.

Meanwhile, Jorge Casimiro and Thomas Thibodeau, who ran the company responsible for Hyde Park, blamed most of the mess on a subcontractor, saying roofs had been improperly installed, according to legal documents filed when the two sued the roofer.

Casimiro, former CEO of Stature, said his company made plenty of repairs, yet the problems kept mushrooming and homeowners kept complaining, according to court records. "And I do remember that we went out there and we tried to fix things. And I believe that we fixed them at that time," he said in a deposition.

Casimiro and Thibodeau did not respond to repeated requests for interviews.

William Chesney III, an attorney for Casimiro and Thibodeau, said he expected the Ellises' lawsuit to be settled. But he attacked Fogal's claims as lies, as frivolous and as unreasonable, documents show.

Casimiro and Thibodeau continued to develop property under myriad names.

One company Casimiro ran botched the Memorial Villages police station that serves three small towns just west of Loop 610, public records show. In 2002, Stature Commercial Construction was fired from the $3.2 million project.

While under construction, the station filled with mold. The company blamed a roofer but Stature's bonding company paid more than $1.5 million for repairs and other expenses related to the debacle, documents show.

Another related company developed Montrose's Tremont Tower, a troubled condo project that bears the dubious distinction of having one of the region's highest 2007 foreclosure rates, according to a Houston Chronicle analysis of data collected by the Foreclosure Information & Listing Service.

Last year, nearly two dozen Houston homeowners who live in three other developments built by Stature or Tremont Homes asked the Harris County District Attorney's Office to investigate the companies. Their town homes were built in and around Montrose and near Memorial Park.


No criminal action
The homeowners took photos of tell-tale brown stains under leaky balconies. They collected inspection records showing how the builder had sometimes skipped getting required permits.

They documented how the company changed names and then denied warranty claims.

And they provided their own mounting repair bills.

The District Attorney's Office refused to take the case. In a letter, consumer fraud division attorney Valerie Turner said she thought it would be too difficult under Texas law to prove Tremont "intentionally and knowingly promised performance to the consumer, which they knew would not be performed."

"Your complaint, while very serious, is not criminal," the letter concluded. "We are sorry that civil remedies afforded to you and other homeowners under Texas law ... seem inadequate."

Sarah Reid Ford, one of the homeowners, was confounded by the response.

"We could get dozens of witnesses to say: 'These people cheated me, they defrauded me,' ... and at the end of the day, the DA's office does nothing," she said.

Several years earlier, the Better Business Bureau of Greater Houston also unsuccessfully urged prosecutors to investigate after Stature/Tremont failed to respond to consumer complaints and then changed names, said spokeswoman Carol Ritter.

The BBB ejected both companies from its membership rolls.

Though construction complaints are common, Ritter said, allegations about a pattern of substandard construction and deception by Stature were disturbing.

"They know that if they can string this out for as long as possible, they will just bankrupt everybody," she said.


Complaints increase
Though it's possible in Texas to make a criminal case against a builder or remodeler who repeatedly takes homeowners' money and never performs any work, state laws are not strong enough to protect homeowners in many other situations, said Russel Turbeville, chief of the Harris County district attorney's consumer fraud division, who has seen construction-related complaints surge.

"Texas is a bad place to be if you've got a construction problem with your home," he said.

Tort reform and lack of legal protections have left homeowners who believe they have been victimized by builders with fewer ways to fight back, advocates from Home Owners for Better Building and Texas Watch say.

"To the extent there are builders who are gaming the system and preying on consumers we need to have significant reform," said Alex Winslow, of Texas Watch.

But Lee Parsley, an Austin attorney for Texans for Lawsuit Reform, said, "Lawsuit reform is not related to the problems people may be having collecting judgments or arbitration awards, and it has nothing to do with whether the district attorney can attempt to punish a person or company that refuses to pay."

In 2001, Stature Construction had been listed by Hispanic Business Magazine as one of the nation's largest Hispanic-owned businesses, with $28 million in revenue.

For years, the company steadily pumped out more than 50 homes a year in the burgeoning Houston market, according to depositions given by Casimiro.

But Casimiro has claimed his company was a casualty of the lawsuits and subcontractors' substandard work. Casimiro, a former member of the Harris County Housing Authority, has been building in Houston for years — first fencing, then affordable homes and then upscale inside-the-loop developments.

His partner at Stature was Thibodeau, a Houston builder who founded the company with Casimiro's father in 1989. Thibodeau oversaw construction; Casimiro was the business manager who oversaw warranty matters, according to depositions.

Casimiro used Norman Chapa, his brother-in-law, as his go-to guy for dealing directly with homeowners' warranty issues.

Chapa, who has no construction experience, went to federal prison last year after pleading guilty to taking part in an international visa fraud ring involving Chinese citizens, according to his sworn statements and federal court records.

In 2001, the year Stature Construction became inactive, Casimiro and Thibodeau founded other companies, including Tremont Homes. Initially, at least, Tremont Homes used the same offices and many of the same employees.


The hidden defects
The Hyde Park Crescent project, started in 1999, featured a three-story boxy design with steep-pitched roofs and decorative accents. Several couples, like the Fogals and the Ellises, were captivated by what seemed like a sure-thing investment.

"By outward appearances the homes were masterpieces with spacious rooms, hardwood floors and detailed interior finishings," said the Ellises' lawsuit. But in reality, they were "nightmares in the making."

The first problems seemed small — it rained in a few windows; a bathtub leaked.

It took several rounds of repairs before the Ellises and others learned about the mostly hidden defects, their lawsuit says. Roofs and balconies accumulated moisture that slowly discolored and undermined stucco facades.

The Fogals eventually learned their own home had been filled with mold before they bought it for $368,564 in April 2002. There had been nothing in the paperwork at closing that disclosed leaks or roof problems, according to arbitration documents.

Unable to pay needed repairs, the Fogals lost their home to foreclosure in June 2005.

1 comment:

Anonymous said...

We have lived in Hyde Park since the begining and its unfortunate that just 4 of the homes had problems. To cry foul on the builders because 4 out of 44 units had issues seems like there is something wrong with your story.
We are sorry that you happen to get one of the bad units, however all the other tenants are pretty happy with the reminder houses.