Report on TV KARE11 in MN

[Guest guest]

I saw this with an update last night on TV. The legislature is going to try to

change this

loophole, as they think it is unfair. Now, if they would make it retroactive, it

would be even

better.

***********************************************

A quirk in the law that could cost homeowners everything

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

" 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.

www.epa.gov/iaq/molds/moldguide.html

By (Copyright 2006 by KARE. .)