Soiled Hands

It's no surprise that builders take shortcuts to make money. What might shock you: Government officials -- from regulators to legislators -- do little to stop them

By May, almost a year will have passed since Westcott filed her complaint. She's still got the crickets. She's still got the cracks and, ostensibly, the curling foundation.

But she knows she doesn't really have a choice other than to keep negotiating.

It's not like she can sell the place.

"I talked to some real estate people, and none of them would list it," she explains. "They said, 'It's not sellable. Even if you went with a reduced price, you'd have to disclose it. And once it starts cracking more, they're going to sue you.'"

She sighs.

"This is the first brand-new home I've ever had, and it's been a nightmare."

She thinks she's close to an agreement, and her goal is to take it, get the house fixed, and get out. She thinks she'll move back to Prescott.

"I want to sell the house and get out of here," she says.


For years, lawyer Jim Eckley has been fighting with the Registrar of Contractors. Because he fights for homeowners -- and because he's a true believer when it comes to that cause -- he's long believed that the agency has been co-opted by builders.

He blames political pressure. The builders are pals with the Legislature, he says, so Governor Napolitano has no interest in picking a fight with the builders.

And she's got the power to fire the Registrar.

After awhile, he says, the Registrar's interests become the builders' interests.

"This is like Animal Farm," he says. " The pig starts to look like the farmer before long."

Last month, Eckley got some information that made him shift his original focus. He learned that the Arizona Department of Real Estate had quietly established a special task force.

The focus was on subdivision reports, which builders must file before construction. Since they must include a soil report, the subdivision reports are often key in expansive soils cases. (The report checks for expansive soils and tells the builder how to deal with them: gutters, or a stronger foundation, or excavating the soil entirely.)

Real estate staffers make sure the report is thorough and professional, says Cindy Ferrin, deputy director of the agency's subdivisions division.

But even though builders hire the engineers who write the reports, construction defect attorneys say that, time and again, the engineers' recommendations are not followed.

It seldom becomes a governmental matter. Ferrin says that only "once in a blue moon" does her office refer a case to the attorney general because the report hasn't been followed.

Lawyers like Eckley would like to see that change. They'd like to see consequences if the report is ignored.

That would be a good topic for a task force. But that's not what the "Subdivision Stakeholders Task Force" had in mind, not at all.

The task force's goal, admits its chairman, Gary Brasher, is speeding up the reporting process. As Ferrin has acknowledged, report review can take up to 100 days -- something the builders haven't been crazy about.

The task force chairman, Brasher, says it will be two weeks before the task force's own report is ready. Until then, he won't talk specifics.

(Nor will the department's spokeswoman, Mary Utley, who says she doesn't even have access to the membership roster.)

But the title makes one thing clear enough: It's the "stakeholders" who are running the show.

And by stakeholders, the real estate department doesn't mean consumers, who have to deal with what happens when builders don't follow the reports.

Or construction defect attorneys, who litigate these matters every day.

Or even the Registrar of Contractors, who's had to handle thousands of cases after soil reports are ignored.

Instead, according to the membership roster, which New Times obtained, it's got one real estate analyst and a representative from the Arizona Association of Realtors. It's got one title company executive, one real estate broker, and one broker/developer.

And it has no fewer than three representatives from the homebuilders' trade associations.

There's one from Flagstaff. One from Tucson. And one from Phoenix.

"The Department is handing developer regulation over to the developers," Eckley says.

He's most aghast that the real estate department refers to the homebuilders as its "stakeholders."

"Nothing whatsoever is owed them. It is they who owe the public a sound project, with full and accurate disclosure of any shortcomings in it, and the real estate department is there . . . without mercy for anyone other than the consumer, to see that this happens."

But Brasher cautions that no one should worry. The task force report will hardly become law overnight. The group's focus is on speeding the process; the real estate department, he says, surely has a different goal.

"The Real Estate Department must, above all, protect the public," he says. "I'm sure there will be some tweaking done so we accomplish both goals."

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