Smart Buying in New Construction Do Your Due Diligence

Everyone's heard the old saying about how "They don't make 'em like they used to" applied to everything from cars to appliances. But does the same hold true for residential buildings? A spirited debate surrounds the issue of whether today's glass-and-steel (or zinc, or titanium) condo towers are less well made than the stone-and-mortar edifices raised at the turn of the last century.

A spate of recent news items in a number of publications has raised red flags about the potential risks and hassles of buying brand-new apartments—but is the alarm justified? What should a homebuyer know—or know to look out for—when buying into a newly constructed building?

The Airing of Grievances

Problems in new construction range from builders swapping promised luxury finishes for cheaper substitutes to leaving wiring dangerously exposed.

"Sloppy workmanship creates huge issues," says C. Jaye Berger of the Law Offices of C. Jaye Berger, a Manhattan attorney specializing in construction-related issues. "There are things that violate codes—like vents being put in at the ground level instead of the roof—and there are also a lot of problems with leakage. Some developers are on top of it, and build precautions into the developments like pumps and waterproofing, but others don't."

Other complaints arise out of poor planning and execution, continues Berger. "In one case, my client bought an apartment where all the cables for the entire building were in my client's unit. That means any time anyone in the building needs the cable guy to come in, they have to get access to my client's apartment. That's just stupid. It's bad construction," she says.

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Comments

  • Actually suing isn't an option for many, thanks to the mandatory arbitration clauses common in real estate contracts now days. Arbitration clauses take away a consumer's right to file a lawsuit. Instead, disputes are heard by private arbitration firms that often do repeat business with the companies. Consumer advocates have reported bias in favor of companies, or ridiculously small awards if consumers do win. Since private arbitration is not a public record, numerous complaints are hidden this way, misleading future consumers who are doing research before buying. Only one state, CA, makes any arbitration outcomes public info and that does not reflect important details that would influence consumers' decisions if they knew the whole story. Also, shoddy construction in new homes is a national epidemic. The FTC warned the industry back in the 70s to clean up its act but it didn't. Defects in new homes can be severe, causing families to lose everything. Justice is hard to come by once you've closed on a defective new house. Definitely get a good inspector/engineer, preferably DURING construction, and do not sign a purchase contract before having your experts verify the builder knows HOW to build properly first. Also have your own attorney review and change contracts as they are usually one-sided if accepted as is.