Thousands of home owners in Southern California are finally going to get their plumbing fixed thanks to a $41 million mediation settlement in a defective galvanized steel plumbing case.

Earlier this week, a Los Angeles County Superior Court Judge approved the class action settlement granting thousands of home owners money to fix plumbing in homes built from 1986 to 1994.

Home owners in 3,552 single family homes and 1,124 condos in 15 new-home communities in Santa Clarita Valley, north of Los Angeles should soon receive up to $9,000 each, to replace bad pipes in their homes and, in some cases, pay for past repairs.

The settlement, in a case brought by six home owner groups, is the latest action revealing growing dissent among consumers over new home defects, but a national trade group says it offers an avenue of help.

The cost of the defective plumbing settlement is being shared by some 40 builders and developers including the original land owner and developer, Newhall Land and Farming Co., as well as American Beauty Homes, Dale Poe Development, Presley Homes, Pacific Bay, Paragon Homes and Monteverde Development Co., and the pipe manufacturer, Korea-based Dong Du Steel Ltd., among others.

"We don't know why our name keeps coming up. We built a small portion of the homes. We are a very small part of a global settlement," said Marlee Lauffer a spokeswoman for Newhall Land and Farming Co. a commercial real estate developer and former home developer.

"We are probably the biggest recognizable name. We probably built about 10 percent of the homes. We stopped building homes in the late 1980s" she added.

Corrosive soils

The home owner plaintiffs alleged the homes were built with substandard plumbing materials that leaked, produced rusty tap water and corroded to clog pipes and reduce water pressure.

The class action group's attorney Ross Feinberg, with offices in Newport Beach, CA and Las Vegas, NV said the developers saved money by installing Korean-made galvanized pipes that prematurely corrode in the corrosive soils in the area and that builders should have known to use more expensive copper or steel plumbing instead. The pipes developed pinhole leaks causing drinking and bathing water to turn a yellowish brown color. Also, the piping was manufactured with a seam that hastened the corrosive effects.

"Ultimately it's the builder's fault for putting the wrong kind of material in the soil. They should have determined this kind of pipe wouldn't work with this type of soil," said Feinberg.

The settlement comes on the heels of a $32 million settlement against Farmers Insurance Group for mishandling black mold claims for a home that must be demolished in Texas.

Earlier this month, former new home marketers, Jeff and Susan Treganowan, set off on an coast-to-coast "Stop The New-Home Nightmare" campaign to survey home owners about problems with new homes and to inspect new home selling techniques.

The authors of "The Ultimate New-Home Buying Guide," (Maple Leaf Press, $15.95) say recent settlements are examples of the building industry's unwillingness to quickly respond to new home owners complaints about defects and dishonest practices.

"We saw plumbing defects in the homes we sold all the time. There are a lot of plastic systems and what ends up happening builders hire subcontractors to put it together and if you don't put it together properly it voids the warranty and the builder is not liable and the manufacturer is not liable," said Jeff Treganowan. "We are doing this tour because we've talked to a lot of people and we think this is a national problem," he added.

Industry help for home owners

The National Association of Home Builders' Research Center offers a channel for consumer complaints about building materials and techniques, the "Tool Based Hotline", available on the Web, by e-mail, by snail mail at ToolBase Hotline, NAHB Research Center, 400 Prince George's Blvd., Upper Marlboro, MD 20774-8731, by telephone (301) 249-4000 and by FAX (301) 430-6180.

The service was used to root out problems with EIFS (Exterior Insulation and Finish Systems) and is currently looking into increasing reports of mold.

"Consumers can call if they see problems cropping up. We try to be a resource for consumers by going out and finding out if there are defects with materials and techniques. We also advise builders," said Donna Reichle, NAHB's spokeswoman.

"Mold is an issue we are taking very seriously. It's not really a smoking gun kind of thing. Mold is a problem in all different areas, residential and commercial. We are writing a white paper on the causes and effects of mold, clean up, mitigation. We don't know right now if its a combination of new building products and techniques or if more people are just more aware of it," she added.

Feinberg also said consumers must complain to builders first and follow the builders complaint process -- in writing -- to establish evidence and to seek a solution through the builder's home warranty.

"First contact the builder and try to get it worked out. When we get a new case the first thing we ask is 'What have you done with the builder and the warranty?' What often happens, however, is there is a one-year warranty and it's now outside the year so the builder says 'We aren't going to do the repairs.' I've worked with a lot of builders to give them an idea what homeowners end up suing over. I'm happy to see that avoided and that things are worked out," said Feinberg.

For more articles by Broderick Perkins, please press here.

Published: July 11, 2001

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.