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Homeowners win lawsuit against builder for fraudulent nondislosure

Dream home turned nightmare

In 2005, Mark and Marilyn Hess moved into their brand new Utah home after years of planning and saving. Shortly after they moved in, cracks started showing up in walls and in the concrete and not long after, their home began to separate and sank five inches.

In 2005, the Hess family filed suit against the builder alleging the developer knew of the unstable land. During discovery, they learned of a 1997 environmental report that detailed collapsible soils which was never disclosed to the homeowners.

They tapped all of their financial resources to keep the house inhabitable, believing they would never be able to sell it. When windows broke or ceilings gaped or walls came apart allowing wildlife indoors, the couple maxed out their credit cards and even sold Marilyn’s wedding ring to pay for repairs for the family home. They were able to have the home lifted and leveled, but are unable to pay for many of the internal repairs and cracks.

Their lawyer calls this case the most frustrating of his career as he carried the cost during the ordeal, nearly bankrupting his own private practice.

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Fraudulent nondisclosure

In 2008, for their “fraudulent nondisclosure,” a Utah District Court jury awarded $3.2 million for repairs with $2.65 million of that going toward pain and suffering.

Now, the Utah Supreme Court has reduced the amount of the award to $3 million and upheld the fraud ruling. Canberra Development Company, the named defendant, appears to have little money in the bank and the homeowners are unlikely to see any funds soon if ever.

In real estate, it goes without saying that everything must be disclosed. This builder has said they will appeal and the homeowners feel violated and stuck in a nightmare. This is a lose-lose for everyone involved.

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Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

18 Comments

18 Comments

  1. MH for Movoto

    May 3, 2011 at 11:56 am

    3.2 million is NOT enough. Horrible.

    • Lani Rosales

      May 3, 2011 at 12:29 pm

      I agree. Plus, I hear the builder has basically said they "can't" pay. Industry insiders sometimes forget to look past the framing and into the value of a home to a homeowners- there is NOTHING more personal than where you live. How crushing.

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