A quirk in the law that could cost homeowners everything

[Guest guest]

A quirk in the law that could cost homeowners everything

http://www.kare11.com/news/news_article.aspx?storyid=117836

KARE, MN

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" For most people, their home is the largest investment they'll ever

make, " says Ann Betts of Roseville. " And this is giving them

absolutely no security. "

The Betts' spent years thinking about and planning their dream

house. But roughly a decade after it was built, Ann and her

husband Duane discovered their home, the four-walled fruits of their

labor, was quite literally rotting.

" Well, when we removed the stucco here we found some major moisture

intrusion, " says Mark Reuter of Sundance Exteriors.

" I've sold real estate for 25 years and knew there were a lot of

stucco issues out there, never thinking that I was going to be one

of them, " says Betts.

Given the age of the home, Ann assumed she was covered by a

state mandated statutory warranty, a 10 year window of sorts,

allowing homeowners to hold builders accountable for structural

damage stemming from major construction defects. There was just one

problem. Her builder's corporation had dissolved, filing their

intent to do so six years before the damage was discovered. Further

complicating the matter; a recent ruling by the Minnesota Supreme

Court.

" Two years from the date they file their intent to dissolve their

corporation, all liability ceases, " says Andreson, an attorney

specializing in such matters. " So effectively they have put all of

the power in the hands of the builders to unilaterally shorten the

10 year warranty period to as little as two years. "

What's more, the builders don't even have to notify the homeowners

they're dissolving their corporations.

" It's totally unfair, " says Ann.

" Ann has been caught in a legal system that's basically failed

her, " says Sauro, her attorney.

" During the course of their battle Duane Betts, a respected

physician, found himself battling for life itself. He succombed to

cancer last March. "

" He really could not deal with it a whole lot as he became more

ill, " says Ann. " So I ended up handling quite a bit of it. "

In the end, Ann was forced to pay for the repairs herself. The

cost was well over $100,000. This, despite the fact the building was

insured when her home was constructed.

" In Minnesota, you have to sue the builder first before you can

access their insurance policies, " says attorney Sauro. " If you can't

sue the builder because it has dissolved, then there is no recourse

against the insurance companies. "

" For people who are unethical, it's an escape route, " says

Ann. " Because if they dissolve their corporation in order to avoid

the warranty that should be on their product, it has made it very

easy for them to do. "

" Absolutely. " says Reuter, who made the repairs to Ann's

home. " There are builders that are dissolving just for this reason,

and then starting building again under a different corporation. "

" I'm aware of builders that are on their third, fourth and fifth

corporations, " says attorney Andreson.

In the meantime, Ann is stuck in the middle between a catch 22

and a loophole in the law, each with staggering ramifications.

There are ways to protect yourself against unscrupulous contractors.

First, stay current on the status of your builder's corporation. You

can do that by calling the Secretary of State's office at 651-296-

2803.

Second, consider an inspection to look for mold, moisture or other

problems There are several reputable firms which do that work in the

Twin Cities.

For more information, visit the EPA Web site about mold in newer

homes.