In cases that could send a stern warning to the construction industry, builders are paying nearly $12 million to settle two lawsuits over allegations of construction defects in Scottsdale and Surprise.

Homeowners say they lived with air-conditioners that vibrated across condominium roofs, homes that flooded, and a community clubhouse that had a cracked foundation and a bad roof, among other problems.

The lawsuits by residents of the Scottsdale Mission Homeowners Association and the Sun Village Community Association in Surprise identified the same kinds of problems experienced by homeowners throughout the Valley.

"Just look at Maricopa County today. There is a ton of new construction. Hopefully, this will send a message: They have to build quality homes or they're going to be held accountable for it," said Curtis Ekmark, the attorney who represented both associations.

He said the settlements are the largest in state history involving lawsuits by homeowners associations over construction defects.

The Surprise association has received $6.3 million. The Scottsdale group is getting $5.6 million.

Ekmark hopes the cases will give hope to other home buyers who run into similar problems.

The Home Builders Association of Central Arizona said the settlements could have a more practical effect on builders.

"I think what it does is require them to spend more time documenting everything," association President Connie Wilhelm said.

She said builders likely will take steps that include videotaping construction and keeping better records to guard against lawsuits.

Rise in complaints
From July 1998 through June 1999, there were 7,781 statewide complaints filed with the Arizona Registrar of Contractors, mainly for workmanship on residential buildings. That is up substantially from about 5,000 statewide complaints from July 1991 through June 1992.


None of the builders involved in the two lawsuits was active, at least in the past 12 months, according to Home Builders Marketing Inc., which tracks the housing industry.

In the Scottsdale case, Ekmark said the developer was Scottsdale Mission Associates Limited Partnership and the builder was Miramar Development Co.

In the Surprise case, the developer was a partnership of Estes Homes and the Radnor Corp./Sunoco.

Scott Sherman, an attorney who represented defendants in both cases, was reached by The Arizona Republic, but said he could not comment immediately. Later, calls were not returned.


Representatives of the builders have said the homeowners' complaints were exaggerated or were not defects at all.

The problems hit

At the 1,400-home Sun Village Community Association, near Bell Road and Grand Avenue, residents such as Gerri Kiessel say they were impressed by the clubhouse and the golf course and the like - until the problems hit.


"Everything looked wonderful," recalled Kiessel, president of the community association. The pool looked beautiful. Five months later, "you'd have a special assessment because it was leaking and had cracks."

The association's lawsuit, filed in 1996, focused on problems in such common areas as drainage and irrigation on the community's golf course, and roof and foundation defects at the 40,000-square-foot clubhouse.

The complaint said the developer also failed to set up a reserve account and set assessments too low to cover the costs of running the development.

"Now. everyone is happy to be living here," Kiessel said. "The conclusion was a very happy day."

At the 248-condominium Scottsdale Mission Homeowners Association on 92nd Street north of Shea Boulevard, residents say they lived with leaking roofs, windows and decks, even though the condos were only a few years old. The parking lot flooded, they say, and so did their homes. They also reported other problems.

The lawsuit was filed in 1997.

About two-thirds of the money, which will be paid mainly by the builders' insurance companies, will go to correct the construction problems, Ekmark said. The rest will go toward court costs (lawyers fees).

And in the Surprise case, Ekmark said Radnor Corp./Sunoco paid about $3.2 million in cash and $500,000 worth of land. Several insurance carriers of Estes' paid about $2.8 million.

About two-thirds of the money will go to correct the Scottsdale problems, Ekmark says.

Some partial settlements began in the cases as early as 1998. One of the homeowners association cases was completed last month; the other was completed earlier this year.

Reach the reporter at Chris.Fiscus@ArizonaRepublic.com or (602) 444-7942.

Copyright 2000, Arizona Central

---

to go to the Arizona Republic

• 1. Violence begets violence (4/22/2000)

• 2. Heroes stop rampage (4/20/2000)

• 3. Suspect known in neighborhood for bad temper (4/20/2000)

• 4. Violence mars community's quiet lifestyle (4/20/2000)

• 5. Violence by seniors likely to escalate (4/20/2000)

• 6. Good folks, nice neighbors become violence victims (4/20/2000)

• 7. Gunman told victims he was getting even (4/20/2000) 

• 8. Home foreclosure racket causing violence (4/20/2000) 

• 9. Complex's shooting puts homeowners groups in spotlight (4/20/2000) 

• 10.. 12 millions dollars for faulty buildings (4/15/2000) (Association lawyer Curtis Ekmark)

• 11. Owners groups - ogres or godsends? (4/15/200)

---

---

Homeowner associations: Witnesses & Experts and Victims of political, legal and judicial corruption and abuse, including several of the victims mentioned in the above AHRC article, are available for broadcast interviews, government hearings and investigations. Please call, write or email requests to American Homeowners Resource Center.