Buying a new or renovated house? Do your homework first.
Many buyers of new construction or flipped homes, dazzled by gleaming hardwood floors and sleek stone countertops, don’t bother to read the fine print. Some end up regretting it.
Many buyers of new construction or flipped homes, dazzled by gleaming hardwood floors and sleek stone countertops, don’t bother to read the fine print.
Some end up regretting it when they discover construction defects, shoddy workmanship, or water infiltration that can cost hundreds of thousands of dollars to address.
Here, a lawyer, an architect, and a builder offer tips on how to protect yourself.
Research your builder and architect.
“Many times, people in the city have no idea who actually built their home ... and that hurts down the line for a variety of reasons,” said Jennifer Horn, whose law firm, Horn Williamson, represents homebuyers in construction cases.
Before buying, ask who the builder is, who drafted both the architectural and engineering plans, and who is responsible for overseeing the work. Then do your research: Check LI.phila.gov or state disciplinary boards, at pals.pa.gov, for violations or discipline. For even more about a contractor, file a Right to Know request for any violation notices, allowing 35 days for a response. Find instructions here: openrecords.pa.gov
Other research could include requesting a copy of the builder’s certifications in building envelope management (ensuring that a building is air- and watertight), reading online reviews, or talking directly to other homebuyers. Court dockets — such as the Philadelphia Court of Common Pleas’ civil dockets — will also turn up any litigation by unhappy customers.
Horn also advises researching building materials proposed for new construction homes, such as water-resistant barriers and siding, because some products — such as certain brands of fiber cement — may be particularly troublesome.
For flips, check city databases — and talk to the neighbors.
Katherine Dowdell, principal at Farragut Street Architects, urges against buying a flipped or newly renovated house. “There are some good ones, but they are so outnumbered by the bad ones. And once it’s all covered up by HGTV white and gray you can’t really tell the difference. It doesn’t come out for a few years.”
For those committed to a move-in ready renovation, she suggests making sure permits were obtained and closed out. On Atlas.phila.gov, you can view all permits, as well as any violations flagged during construction. On eCLIPSE.phila.gov, you can also see whether city inspectors approved each step of the process. If any permits are still open, ask the seller to get them completed before closing.
You can also file a Right to Know request for the permits, plans and inspection records for the property.
The best way to get intelligence on a builder’s work, Dowdell points out, might be to check in with neighbors by knocking on doors or on social media. They might have noticed any problems during construction, or issues with other projects by the same builder.
Watch out for Philly renovation red flags.
Architects and builders who work on rowhouse rehabs say there are hyperlocal considerations.
Dowdell mentioned the trend of excavating basements to create more livable space: “It’s dangerous. It’s unnecessary. It’s turning basements into something they were never meant to be.”
Sasha Certo-Ware, who owns Subversive Building and posts how-to renovation videos at Philly Green Building, added that he avoids stucco-coated buildings because they are prone to failure in this climate — and may hide structural defects.
Just as important, he said, is what else is happening on the block, in a city where excavation has repeatedly undermined adjacent rowhouses.
“We want to make sure that there isn’t any settling or cracking that could have resulted from construction [next door],” he said. “And if you’re next to a double lot with a house that might be falling over, you have to think about what somebody might put in to that lot two, three, four years down the road.”
Hire a home inspector — and not the one recommended by your agent.
Some real-estate agents advise clients that new construction or fully renovated homes don’t require inspection because any issues can be addressed under the warranty. Others work closely with home inspectors, raising a potential conflict of interest in that reporting issues that halt a sale would affect the agent’s income.
Horn, the construction lawyer, urges clients to find an inspector on their own who won’t be afraid to identify problems. If you’re considering purchasing a house that’s still under construction, Certo-Ware suggested hiring a contractor or inspector to serve as your representative.
Review the sale contract and warranty with a lawyer.
Horn said even a brief consultation with an experienced construction lawyer can help buyers identify issues in the contract and negotiate more-favorable terms.
For instance, many homes are sold with a one-year warranty. But in agreeing to that, buyers may actually be signing away some of their rights. Without a warranty, new homebuyers in Pennsylvania can benefit from implied warranties of workmanship that let them bring a claim within four years.
Other sales contracts require arbitration, which can be extremely costly because plaintiffs must pay the arbitrator by the hour. Some mandate confidential arbitration, which could bar the buyer from taking concerns public or even filing a complaint with the attorney general.
If problems arise, call a lawyer right away.
According to Horn, common barriers to filing legal claims against builders are spoiled evidence and missed deadlines.
If your home has possible construction defects, you’ll want to call a lawyer early — before repairing any damage. Photos alone are often not sufficient evidence, she said. As well, keep in mind that the statute of limitations for certain types of claims may be two to six years from the time the homeowner is aware of problems in the home.