In CA, builders are NOT required to carry general liability ins. (protecting buyers in the case of major construction defects). CA contractors board relies on the builder/developer's financing (bank) who place this requirement upon developer/builders. Builder/developers who are able to build w/o financing CAN & DO build multi-family condo bldgs in CA w/o ANY general liability ins.

Our very small condo bldg was negligently constructed (including many bldg code violations which got past city inspectors!), and we are now the victims of over $1 million in construction defects. The builder/developer was uninsured, and he's saying that all the subs he hired were uninsured as well (most were unlicensed). We're in litigation, and this is a horrible uphill battle...a virtual Nightmare!

The same builder/developer has built another condo bldg nearby, and he has told us he built this new bldg w/o liability insurance as well. (These units are in the 750K range) The developer/builder's daughter is the real estate agent -- working for one of the largest and well-known real estate companies in the nation!

We are picketing in front of his bldg & handing out flyers advising prospective buyers to (#1) get the builder's name & ck references, and (#2) to get proof that the builder carried general liability insurance during construction of their condo bldg.

The daughter/agent (who is also married to the builder/developer's partner) KNOWS that her father & husband built this new bldg w/o liability ins.

So far, we've had at least 4 couples come up to us & tell us that the name they've been given for the builder is "LLC," when in fact the agent's father is the builder and that is NOT his nor his company's name. We've been told that the agent is also apparently telling these folks that the bldg has $2 million in general liability ins., and that that is the same thing as builder's general liability ins. Another false representation, of course!

This developer/builder & his daughter are currently taking $25K deposits on these units, while making obviously false representations in order to lure more innocent folks into purchases.

Sad thing is, our hands are tied while we hope to settle OUR bldg's nightmare, and we have a very long way to go before we see even a glimmer of hope in that regard. I guess all we can do at this point is possibly tell these folks to get EVERYTHING that the agent is saying in writing

Sounds like a REAL nightmare.

Given the lobbying power of the NAR and the ad dollars spent by the big brokers, I feel the consumer generally gets the short end of the stick when it comes to trying to get proper protection from state governments or getting local media to run stories about the anti consumer practices of the real estate industry.

I'd say it falls more under the governments builders/construction and insurance regulatory agencies, than the real estate industry.

Are you saying that the NAR has all the state governments under their thumb? I think that is a little far fetched. Oversite in the the developement area is often lacking but the developers and local politicians always seem to know each other.

No, that is not what I am saying. What I said was that the NAR spends billions of dollars on lobbying efforts and media advertising, that is a fact. If you think that doesn't have an effect on politicians and media outlets you are blissfully ignorant to how our political and media systems operate.

I will give you a first hand, real world example:
Last weak there was an story in Chicago's Daily Herald critical of the NAR. I was interviewed for this article as a one of the "newfangled breed" of brokers. I know for a fact that the publishing of the article was delayed several days while the ad department "reviewed" it. I don't know if they made any changes or not.

Realty Freak, I and probably many other brokers don't care how you run your business and what you charge for your services. My responses to the twisted truth newspaper article would be:

"The NAR “obstructs real estate brokers who are using the Internet to serve their customers, and who are developing innovative business models that take advantage of Internet technology,” argued J. Bruce McDonald, a deputy assistant attorney general. The suit alleges that the NAR prevents nontraditional brokers from gaining equal access to the massive Multiple Listing Service registry."

NAR does not care what a Realtor charges for their service and the local MLS provides access to any paying member, regardless of traditional vs. non traditional service. (just look at my MLS)

"But Levitt predicts a new market where flat fees and hourly rates become the rule, and we end up with fewer agents who make less per sale, but sell more properties."

Quality and service will suffer, but if the consumer says it’s ok, who are we to deny them. (lack of disclosure of how much/little service is provided has been recent feedback by consumers of non traditional berokerages)

Have a question for real estate brokers. Does a broker have ANY duty whatsoever to investigate significant issues in dispute re sale of newly constructed condos? We're picketing at an unscrupulous/negligent builder's latest project (as described earlier), with signs warning what he built/sold us. We're also naming him in our signs. Brokers selling the project are handing out flyers to prospective buyers saying that's not the builder on this project for sale. This is an outright lie, which is easily verifiable, by simply taking 5 minutes to contact the city bldg dept (who in fact very quickly & easily informed us). Does not this broker have ANY responsibility to disclose accurate information, especially something as important as this?

Folks have told us that the broker, when asked specifically who the builder is, have been told either (1), that he isn't at liberty to disclose such information, or (2), does disclose the FIRST name of the builder, saying *that's the name of the builder's company.

ANY responsibility?

Thanks!

One quick addition to my last post. The builder/developer's daughter is NO LONGER handling the sale, and now another very large local broker is handling it.

As the builders representative, the broker is obviously increasing his liability by refusing to disclose the builders name.
I hope they have good E&O insurance.

My suggestion is that you contact your local district attorney's office. Every local DA is different, and all have limits of staffing and budget but there is a chance they can have an investigator look into the situation if you explain your suspicions of active ongoing fraud. A deliberate misrepresentation indicating available recourse to insurance for later discovered defects is a material fact to any transaction. Buyers may not buy if they knew the truth, that there is no coverage in place. Misrepresentations about ownership are also relevant. If the DA's office is reluctant to investigate, remind them that the DA is an elected official and has a responsibility to be pro-active to protect the public.

Additionally, you could bring up what is happening at a City Council meeting and ask what will be done about.

Get a copy from the Building Department showing who the name of the builder is if that will help your picketing efforts.

In everything you do above, just be very clear of your facts and always state the truth.

Since you are in litigation over one of the buildings involved, get some advice from your attorney about how your other complaints can be most effective. Also make sure nobody in your group are doing things they shouldn't be doing while picketing. Your attorney can advise you about conduct while picketing, etc.

Talk to your attorney about seeking a temporary restraining order or injunction to stop the sales unless strict guidelines are adhered to, including prominently posting the lack of insurance during construction, indicating accurate builder identities, providing waiver forms whereby buyers acknowledge they are assuming such risks, etc.

Not giving legal advice, just suggestions. Speak with your attorney for advice.

what county are you in?

Oakenfold, we're in Los Angeles County. This fraud is taking place in the city of Burbank, and now, by the same broker, at another brand-new multi-unit condo project located in Montrose, California.

http://www.dre.ca.gov/filecomplnts.htm

http://www.dre.ca.gov/complnts.htm

Why isn't your attorney doing all this for you?

COMPLAINT AGAINST THE SUBD/DEVELOPER

1) As far as the daughter of the developer, do you have any proof that they are related? (overheard conversations etc?)

2) Do you have proof that the agent is making representations to others of the insurance being in place in hopes that they would buy the place?

3) Is the "developer/builder" the general contractor as well? I say this because you otherwise only mentioned subs. Do you have the names of the subs? Company names?

If you don't know the name of the developer, you should the Department of Real Estate's Subdivision Office and ask to see the "public report."

Subdivisions Office–South
320 W. 4th Street, Suite 350
Los Angeles, CA 90013-1105
Telephone: (213) 576-6983

You can do some reading re: public reports here
http://www.dre.ca.gov/subs_sub.htm
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COMPLAINT AGAINST THE AGENT

You can file a complaint against the agent for misrepresentation and go forward with the Department based ONLY on the misrepresentation you can prove/have paperwork for.

Also DRE will look at violations within the last three years, so you can still file.

http://www.dre.ca.gov/forms/re519.pdf

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You can file a complaint against the contractor for construction defects

http://www.cslb.ca.gov/consumers/infocomplaint.asp

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The LA County DA has a consumer fraud unit
http://da.co.la.ca.us/cpd/default.htm

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Before filing these complaints, I suggest gathering ALL completed forms from your neighbors. Unless you are their attorney, you can't speak on their behalf.

As you mentioned, you are in litigation so please hand this info(which I'm sure your attorney already has)to your rep.

Oakenfold, re your 1st question, why our atty isn't doing all this for us: He's been retained for the action against this developer re the shoddy construction of OUR condo project. The issue I'm writing about here has to do with the way this developer & hired real estate broker do business with respect to other projects: luring unsuspecting folks into purchasing condos & rolling the dice re quality of the developer's work.

Your 2nd question: I am 100% certain that the 1st agent used (from REMAX) was the daughter of the developer.

Your 3rd question: Proof of comments made by the present broker (thecondopeople.com) to that effect, no. Just specific comments from 3 individual potential buyers who came back to us & told us the same thing: the seller/developer/builder says he has $2 million general liability, and saying the broker showed them some type of proof. That proof, though, was NOT the developer/builder's general liability, but simply proof that the HOA has $2 million general liability coverage. The broker knows the difference, no? But the potential sale is all that really matters to him, so ...

The last question, is the developer/builder the general contractor as well. Yes, he was, according to all bldg permits obtained from the City of Burbank's bldg division. As far as the subs, I saw the same stucco sub working on the new condos in Burbank, as well as the same waterproofing sub.

The developer/builder also does NOT carry worker's comp insurance (according to the State of CA contractors license board info), paying everyone in cash probably.

It's all been working out so well for them, isn't it? No one can/will stop them, it seems.

Also, as an FYI: I understand that it is illegal for a bldr to be a member of the LLC (subdivider/seller's corp). Well, this builder/developer is also a member of the LLC (subdivider/seller), according to Secretary of State docs.

I suggest filing complaints with the various entities I listed previously.