Alleged shoddy home construction investigated nationwide

CHICAGO (WLS) -- Jason Knowles of ABC7's I-Team and ABC News' Brian Ross discussed what they found in a nationwide investigation into homeowners who don't have the right to sue over alleged shoddy construction in their new homes.

The problems ranged from serious defects to minor annoyances, but no matter what the issues were many homeowners said they're angry because they don't have the legal right to sue.

Local families showed the I-Team what they call poor construction in their homes; flooring issues, water damage, ice inside - on light switches and interior windows - and black soot. But their builder contracts state that instead of suing they must go through an arbitration process, which some critics question.

The families bought from developer Ryland Homes, which was recently sold to the Cal Atlantic Group, which said: "We welcome any customer with a concern to please contact our customer care so that we can respond to them directly and address their concerns, as we have, and continue to do, each time these families have reached out to us."

ABC News and Brian Ross investigated the same issues nationwide.

Brian Ross: The work you did at WLS and across the country, we see the same problem. Shoddy, brand new homes that may look great on the outside, but, in fact, have problems and serious defects on the inside. Often times the builders are slow to come back and fix them, or try to ignore the problem until the warranty has run out, and then what most home owners don't realize is that the contract they sign almost always prevents them from suing the company. They instead have agreed, but may not know it, to mandatory arbitration. With the outcome a secret, can't be repealed, arbitrators are generally people who deal with the home builders all the time and they know which side their bread is buttered on.

Jason Knowles: But the industry experts are saying arbitration is actually faster for the consumer, in some ways better for the consumer. What are they telling you?

Brian: That's the argument they make that you don't have to expensive lawyers. But, in fact, in arbitration the home owners is initially obligated to pay the cost of the arbitrator. What they don't want are the big lawsuit judgments they've received from verdicts around the country.

Jason: What can homeowners do to protect themselves?

Brian: It is not a waste of money to go out and hire an engineer or a building inspector to give you his own version of how they're built.

If you are buying a home you should get an independent inspection and have someone look at the foundation and drainage system. You should also always use a realtor and real estate attorney to help protect you and catch clauses like the arbitration clause in contracts.