Awful Update to “Lessons of a Bad Home Purchase”

Photo by PoPville flickr user Peter Bjork

In August a reader wrote in sharing their Lessons of a Bad Home Purchase. WAMU did a follow up report this morning that is incredibly depressing:

“An October 2014 inspection of the house by Delaine Englebert, an illegal-construction inspector at DCRA, confirmed that there were numerous problems. She catalogued three dozen violations, including unpermitted work, unfinished inspections, insufficient fire-blocking throughout the house, new structural beams that are not properly supported, a deck not correctly attached to the home, a failure to insulate the house, and more.

To make the house livable again, Landis estimated the couple would have to spend $407,000 to correct all the existing deficiencies and code violations.”

Read the full report here (Part 1 of 3).

173 Comment

  • I’ve been very wary about a lot of the rehabbing and flipping lately. Watching work go on in the Bloomingdale/Shaw houses leaves a lot to be desired… Glad WAMU is bringing this to the forefront, because it’s a serious issue that needs some coverage.

  • justinbc

    Might be a good reference for that reader who was inquiring a week or two ago about whether they should consider a house that had lots of work done without permits.

  • PoP, that photo is a wonderful allegory for the U.S. housing market. Well done.

  • While I hope the flipper in this case loses their shirt and is driven out of business permanently by life long debt, I have never been able to really feel any sympathy towards the people who buy these places.

    Flipping by its very nature is a con game, and people who want to buy these places need to go into it with a serious “buyer-beware” bumper sticker stuck to their foreheads. And “house inspectors” are a complete joke, simply by what they cost. If you think paying some guy $350 bucks to come walk around your house for 45 minutes is sufficient due diligence, then thats on you. They aren’t going to be knocking holes in your walls to look behind them, and they aren’t going to look up the permits for you.

    I find that people I’ve known that have fallen for the flipper trap, generally spend more time on yelp researching new restaurants to try, than they spent in total researching the largest purchase of their lives.

    Simply googling the name of the LLC they bought from would have revealed previous lawsuits.

    The clogged sewer line is such a given with a flip that DC should amend the building code to require it as the last step to the process. The contractor, and all their subs (tile guy, etc) simply dump all their junk down the drain after doing their work. All the tile grout, or floor leveling compound goes down the drain, hardens before it gets to the street and voila, the capacity of your sewer line is now at 20% the day you buy your house.

    There have been 3 row houses flipped on my street over the past few years. The buyers of EVERY single one had to spend thousands of dollars replacing their sanitary sewer line to the street within months of buying because the first large rain storm reveals the issue.

    Did you not stick your head into the attic? If you had done so, you would have realized there wasn’t any insulation to be found.

    Did you not look up (or better yet, ask for copies of) the permits issued for your house. Even a lay person would know that a permit issued for a new heating system, and a postcard permit for 2 new plumbing fixtures in the kitchen wasn’t probably sufficient to cover completely “gutting” a new house. Everyone for the past 15 years has known to ask for the “carfax” when buying a used car, but nobody seems to think to ask for the equivalent when plopping down 600K for a house.

    I will get off my soapbox now…

    • Nice way to blame the victim there.

      • Yeah, it’s certainly beneficial to know a lot about the permitting system in the area you’re buying, and a lot about home construction, just as it’s good to know about cars, so you can double-check your mechanic’s work, and your computer, so you can be sure the person at the genius bar is telling you the truth, and medicine, so you can tell your doctor is looking out for you and not the insurance company, etc. etc.

        We have consumer-protection laws because we recognize that it’s not efficient to make everyone learn everything about everything in order not to be taken advantage of. The issue here seems to be that homebuyers assume they’re better protected than they are, because they assume the law works in a sane manner and doesn’t allow builders to violate building codes and then hide behind LLCs. Sure, it would be better for THEM if they knew all of those things you mentioned. But it would be better for ALL OF US if they didn’t have to.

        • You don’t have to know anything about permitting, construction, housing finance or contractors to google a companies name do you?. Doing that bare minimum would have revealed previous lawsuits for poor flips.

          I ask you, what would have been your reaction anon had you googled the name of the company you were about to buy a house from and saw that?

          • No, you don’t. But you also wont’ find anything if you google this particular company. It turns out that if anybody knows how to manage an online reputation, it’s people who have a material interest in doing so.

          • Do you think it’s hard to make a new LLC that is fresh and shiny and has no litigation history?

          • When I was working at an architecture firm in Chicago, the developer would create a new LLC for every new project that they did. They happened to get inspected once and got flagged for a particularly egregious structural omission. He called screaming at us that he had NEVER done that…No one had EVER told him he had to do that and it was totally our fault! We produced for him the structural drawings of the last 5 buildings that we had gotten permitted for him by 3 different structural engineers. Of course every one of them had clearly labeled the structural requirement. We also sent him copies of all of the letters that we had sent to him documenting that we had seen in our walk through that he hadn’t done it. He generally didn’t pay attention to our mail…including bills. Anyways…different LLC for each crappy building that literally didn’t look anything like the plans that we drew for them. I have been ruined for life from buying anything that I didn’t watch go up.

        • +1

          One of the most horrifying parts of the story was that they also found lead and asbestos!

          • Isn’t that par for the course in older homes regardless of whether they are flipped? I own an unflipped, mostly unrenovated home and we have both lead paint and asbestos in various parts of the home. Even my parents’ home built in the 70s has asbestos in it.

          • Finding asbestos or lead isn’t the end of the world, necessarily. LOTS of DC homes have vermiculite insulation in the attic, and this stuff isn’t going to kill you if left alone. The problem in this case is that it was disturbed, which is when it can become really dangerous.

          • Those are both not good things, but are just going to be present in these old houses. In many cases, it is safer to leave the offending thing in a state it can’t be disturbed then try to abate it. I trust the flipper to encapsulate much more than I trust them to correctly abate.

      • Victim blaming? Victim blaming!

        No one is just walking down the street and suddenly, BAM! someone forces them to buy a house.

        This is a business transaction, the onus is on the buyer to be aware of everything that is going on. When I have looked for apartments to rent, I did a large amount of research of each building, visited them, did a walkthrough, and talked to people who lived in the buildings. Buying a house is vastly more responsibility and as Becca said, it is the biggest purchase of your life, so going out of ones way to be cautious is incredibly important.

      • palisades

        This response is getting so old. This isn’t victim blaming. They’re just saying the buyer holds accountability too. It’s a big purchase – do your research.

        • But I don’t think the buyer has accountability. Yes, doing things differently and skeptically can help one to avoid some scam pitfalls, but this IS fraud, and the buyer is not accountable. Suggestions given are good pointers to maybe help others to avoid having these issues – which is why the person who bought this house is sharing – to HELP others. So no need to dump on them for altruism.

        • Yeah, I think it’s possible to hold both thoughts in one’s head. Like, “Wow, these developers should have the book thrown at them” and “Hm, maybe we can all learn from this.” But, most of the people who buy these renovated homes are probably first time homebuyers. You’re not born knowing this stuff, and by definition, people who have been operating in this space for years know how to hide their activities. It’s very comforting for us all to sit in our armchairs and congratulate ourselves on how we would never fall for this nonsense. But home-buying is emotional, especially the first time. So maybe have a little sympathy for these buyers, and a little outrage at the system that allows developers to get away with this. Setting up a system that punishes violations of our city building code has to make more sense than teaching every first time home-buyer how to check for for the infinite number of things that can go wrong with a renovation. Because, seriously, people can manage their internet reputation — Google is not infallible.

          • palisades

            I’m not saying don’t have sympathy for the buyers, I’m just saying I don’t have sympathy simply because they got screwed over. It’s a tough market to understand, but there are also plenty of free resources at our disposal.
            I also agree that these flippers and the building codes need more oversight and regulation.
            I’m just tired of people automatically blurting out “victim blaming.” It’s a complicated situation.

    • Jeez — a little harsh. I’m not a huge victim-blamer, particularly when it comes to a renovated house. I don’t think it’s unreasonable to assume that the renovation was done correctly. Do you have suggestions on what type of consultant to engage to help avoid the lemons?

      • Unfortunately, in this market, it is unreasonable. Those who don’t know this and get scammed do good by sharing their experiences for others’ benefit.

    • I totally agree with what you say.
      But my guess is that the housing industry – from the agents, to the flippers, title company, loan officers, big developers, contractors, and Wall Street – has a HUGE incentive to keep credit cheap and people dumb. No one is ever taught how to buy a house. Even smart people with advanced degrees are dummies with the most important investment of their lives. The whole industry is no better than the con artist playing 3 card monte in Times Square.

      • If people are unwilling to educate themselves, that’s on them. Popville advertises first-time home buying classes all the time. Let’s not pretend that the information isn’t available for those who seek it, instead of crying foul after the fact.

        • “Popville advertises first-time home buying classes all the time.” Come on — those classes are given by a real estate agency. I’d imagine they cover the basics — how to figure out how much you can afford, how to get prequalified, etc. — but I would be very, very surprised if the classes went much beyond that.

        • Textdoc is right. None of these classes will train you how to asses wether the developer has properly supported the joists after removing a load-bearing wall to create an open floor plan. Especially if it’s covered by drywall. Unless you have years of experience as a contractor you will never know any of that.
          An observation: Most of the most expensive repairs here will be the structural work. I sort of wonder if open floor plans will be a bit of an albatross for homeowners 6-8 years from now unless they can prove the structural work was done properly.

        • Textdoc is absolutely right. First-time homebuyers classes are all about mortgage products for various levels of down payment, closing costs, home inspection, etc. I went to one and it had nothing about how to research government records for permits and how to reconcile those permits to renovations do to your house. Silly comment Logan.

    • I agree with you on most of this, but the blanket statement that “Flipping by its very nature is a con game” is completely ridiculous. Washington DC, like many cities, has an aging housing stock with many houses in poor condition in high value areas. The vast majority of home purchasers do not have the time, experience, or financial resources to rehab a house in poor condition themselves. Furthermore, an inexperience homeowner is just as likely to get fleeced by a contractor preforming subpar work as they are a flipper. Perhaps more so.
      If we want to retain historical structures and renew urban neighborhoods “flippers” are an important part of the process. There is nothing evil or wrong with rehabing old structures and vilifying people trying to make an honest living does nobody any good.
      The people in the wrong here are the subset of flippers who perform work without permits, outside the scope of permits, or otherwise not up to par. Reform of the process should be a conversation between developers, DCRA, and homeowners, not a villifying of “flippers”.

      • What you say is true, except that the subset is large, and thus it is best approached by a buyer as a con game.

    • @Anon,

      If this was a story about someone buying a used car that turned out to be a death trap that had been in 5 accidents , don’t you think you would be in part, blaming the buyer who didn’t ask for the carfax?

      You are making the largest purchase of your lives. I don’t care how little you know about buying a house, it is up to you to do as much research as possible before doing so. As I said before, simply googling the name of the LLC they were about to buy from would have revealed prior lawsuits for exactly this. That alone should have been enough to warrant severe skepticism. And everyone, unless they’ve been living in a cave for the past 20 years knows how to “google” something.


      The only thing you can assume when buying anything in life, is that the seller is going to go out of their way to maximize their profit from you, and will cut every corner to reduce their costs to do so. I don’t care if you are talking about buying a loaf of bread from the grocery store, or a car, clothes or a house. Making sure you get what you are paying a fortune for is the buyers responsibility.

    • Con game? There are honest companies that do work by the books here in DC. The houses that I flip have all permits done and we provide quality work. Not flippers are honest, but many that I do business with are.

      • Not all***

        • Good for you, really. But with the dozens of investigations and articles over the past decade about the crap that goes on with flipping a house, it is easy to assume you are in the minority.

          Even if you weren’t, spending 600K to buy a house from a guy who had just bought it for 280K mere months before should induce a level of protective suspicion in the buyer, atleast enough to poke their head in the attic to see if there is some insulation, or to google the name of the company, no?

          • Isn’t this the job of Realtors? To guide people through a home buying process that they are likely unfamiliar with?

            The buyer’s Realtor is getting paid big money to help this person buy a home. You hope that they are able to recommend a reputable home inspector or would be aware with issues seen from certain flippers.

          • Honestly, I’ve never met a real estate agent who’s number 1 priority wasn’t closing the commission as quickly as possible. The whole spiel of “helping you find your dream home!” is just marketing shlock. And the bad part about agents is that they are sort of like the wedding industry – you’re most likely only using the vendor (agent) once. It’s not like you can threaten to withholding repeat business, if they do a bad job.

          • Steve

            Most realtors aren’t getting paid “big money.” A 6% commission on a $1,000,000 house is $60k. At most, the buyer’s agent share is $30k. Most agents work with a brokerage house that splits that commission 50/50 if they are one of their top producers. Assuming that he/she is one of the top agents, then that commission is now $15k. It’s more like 70/30 if they are not a top producer (%30 for the agent). Most agents that I know work with a partner-now the commission is $7500. Pay income taxes, both sides of social security, out of pocket expenses for listing materials and gas and one now has next to nothing. While there are many knowledgeable agents out there, most know next to nothing. You should never assume that an agent can properly advise you on a real estate investment.

          • The days of buying a house for under 300k and flipping for 600 are over. As the housing market has recovered, low prices are out. The only way you are going to get a house under 300k is if it is completely distressed. And then the house HAS to be flipped. Because a conventional mortgage won’t back it and the only way to get it to that level is through an investor. The standard homebuyer won’t have the experience or ability to buy that house and get a traditional mortgage to back it.

          • It is a mistake to think that the agent represents the buyer. In most places, the buyer’s agent is legally a sub-agent of the seller’s agent, with duties that run to the seller. Yes, they have a duty to disclose things they know that is an attempt to even the situation out somewhat for the buyer. But this is merely an inducement not to know things about a house – otherwise, they’d have few sales.

    • In vacuum I would agree with you, but the real estate market in DC does not allow the time to give this level of scrutiny. The market realities are that places go up for sale on Wednesday, open house on Sat/Sun, offers due Monday, and under contract Tuesday. Offers range from all cash, to full waivers, to tens of thousands of dollars over asking. In a calmer market, you might have the luxury to get a top-to-bottom inspection and research on all flippers and sub contractors, but that is not the case here. That’s why better regulators should be there to ensure this type of product isn’t sold.

      • True, in hot housing markets, time is an issue.

        But as I’ve maintained, simply “googling” the name of this LLC would have revealed problems, and doing that takes all of 4 seconds.

        Researching the permits issued on the DC permit database takes all of 5 minutes. Neither of these things are process restrictive.

        But in the end, even if you lose out on a house you were unable to verify the work on, what would you rather have…

        1. A house that the day after you purchase it is worth half of what you paid, or requires you to spend hundreds of thousands more to bring up to code, or

        2. A situation that takes you a few months longer before you find a house you can feel comfortable that you’ve verified the work to a base level?

        I know my preferred options.

        • Having lived next to a flip with bad flippers I know for a fact that pulling permits is not enough to know if the work was done correctly. The flippers next door paid out numerous bribes to DC inspectors to prevent stop work orders. DCRA is very corrupt.

          • Second, third, and fourth this! The notion that DCRA is “under-resourced” is total BS. The true problem is that the agency is filled with corruption. A better investigation of this issue would focus both on cases where sleazy flippers did illegal/unethical things and where DCRA was bribed to ignore the entire mess. The DC council can pass all the laws it wants to try to protect consumers, but until the regulatory agencies of DC clean house there will continue to be problems with people getting ripped off.

          • I think you are mistaken most projects (especially flips) DO NOT USE DC INSPECTORS, they use 3rd party inspectors who do not work at DCRA you sound utterly clueless and bitter about your next door experience (I can empathize but that doesn’t make you any less clueless).
            I certainly don’t love DCRA they can be a real pain in the ass even if you’re trying to do things right; I had a structural reviewer there hold up my plans for almost 2 months because she was incompetent and thought my 1st to 2nd floor stairs were the basement stairs (which made the stairs on the basement level what?!?!? and why does it say “UP” on them) as well as some other elementary error that even someone who can’t read plans could figure out after a decent head scratch. She then took leave, returning the day before they kicked her jobs over to someone else and then took emergency leave. When I was finally able to reach her she said she didn’t have time to look at my job because she was behind (SHE WAS BEHIND!?!?!). I think this was the first time I caught a fly with vinegar at DCRA (usually honey works best), I threatened to bring her incompetence to the attention of her boss and she found the time (no time at all really because there were no issues)!
            My dad was a builder, he said DCRA was very corrupt, it has changed. There used to be corruption at all levels but I do not think that is the case anymore.
            Fudging permits is a tried and true developer strategy. Here let me explain: that WAMU piece had several mentions of illegally moved gas lines. I had a gas line legally moved, it took at least 4 months. When your business model requires a 2 month flip you can not do it legally (the developer and contractor both know this) so if they need to do it they will find a way to do it on the sly. Permitting certain things triggers other reviews which add time/inspections/costs, if you can convince the city you aren’t doing much then they don’t look over your shoulder as much, even those of us operating honestly do not really want that. Lying about the amount of work you are doing also reduces your fees to DCRA so you have that incentive as well. If you tell DCRA you are building a new bathroom they will push your application over to DC Water to check your demand, if it will exceed your supply they make you increase the supply. Flippers generally couldn’t care less if you don’t have adequate water pressure to run your dishwasher and shower at the same time so they lie about existing bathrooms. No need to bribe anyone at DCRA, they do not know the state of the housing stock when it is purchased.
            IMO this would be the solution, preinspections prior to work, before demo to look for hazmats and after to see behind the walls. My solution would be expensive though, inspections when done right are time consuming and often require repeat visits, no one uses DCRA inspections because they are unreliable and you end up losing more money paying people to wait around for them than you would to just get a 3rd party inspector. Amazingly, just like there are always people who will try and save a buck by going to TJ for a boobjob there are people who will try and save a buck on a ‘nice’ house from a flipper even though they know most TJ plastic surgeons and flippers are notorious for shady business practices.

        • “But as I’ve maintained, simply “googling” the name of this LLC would have revealed problems, and doing that takes all of 4 seconds.”

          Really? Did you try it? I just googled “Real Manor ZLK” and no results about lawsuits came up. I then searched “Real Manor ZLK lawsuit” and nothing came up. What are you googling to get the lawsuit results? Or are you just making this up to blame the victims?

        • Becca, did you read the original article? It says the people behind it have over a dozen LLCs – so they can make a new one as soon as one of the old ones gets a sullied reputation. Google will not tell you the names of the people behind the corporate mask. Only a costly law suit will do that – by then it’s too late.

      • Yes, but no one is forcing them to buy a house in this market, or a flipped one, under such pressure. It is a choice to do so. If buyers (en masse) refused to go along, things would change a bit.

        • How many years should you wait for the market to cool? The subject of this article bought in 2011. Should we just keep putting the weight solely on the buyer or is it relevant to hold the government accountable for coming up with solutions to a housing shortage with poor regulators that creates an environment that allows for corrupt flippers?

          • I wasn’t suggesting that one wait for the market to cool. Just that one be cool-headed, and not allow oneself to be rushed into anything precipitously. I did when buying in a similar market – it can be done. I was only reacting to the post above that said, hey, in this market, you have to move fast and so can’t do due diligence … it isn’t so. It strikes me as our parents used to say “if everybody else is going to jump into the lake, it doesn’t mean you have to…”

            With you 100% on fixing the problem with the responsible gov’t agency.

    • I think everyone else has adequately addressed your ridiculous victim blaming here, so I won’t add on to that, but I would note that these flippers hide behind LLCs. They bear no personal responsibility if sued and can simply file for bankruptcy and move on to open a new LLC.

      That all said, they paid $540K for that house, which seems fairly large. I wouldn’t be surprised if they couldn’t find a developer to buy it for close to that and flip it into multiple units. Most flippers are paying $400K for a lot of the shells they are buying in the city now.

      Another scam that should be addressed are home inspectors. I bought a home recently and was happy to get an inspection contingency in the contract, but after talking to friends realized that is not incredibly useful since most home inspectors are not worth the $600 you pay them. Mine found some issues that I was grateful for, but since moving in I have noticed many he missed that should have been obvious. My realtor reminded me that what I paid for was really someone to ensure the house wasn’t going to fall down or burn down as far as he could tell by glancing at it. The reality is that in this market, you have very few options. I was lucky to even get the contingency when so many people get into situations where that isn’t even an option if they want to buy a home. The demand is just too high. I found several things not up to code when I bought and my realtor said, they aren’t going to fix it because they could sell this house tomorrow to someone else who would gladly pay what you’re paying for it. It’s all a gamble. This couple made a bad one. And as far as I know, I’ve been reasonably lucky that in my house (also a gutted flip job), I’ve only found small addressable issues (for now). The developer sent their crew out several times to address some issues covered under my inspection contingency and I noticed that most of the crew seemed to cut corners and do everything cheaply. It worried me. Still does. But I’m not sure unless I could have bought a home and done renovations myself (which you cannot unless you have the cash up front because most lenders won’t front you that money), I had a choice but to take the gamble.

      • I should also add this developer who sold me my home was very interested in working with my agent and so seemed to care about their reputation, which provided some comfort to me. They have also been good about addressing some issues not even part of the inspection contingency. There are bad flippers out there and plenty of good ones that have crews that tend to cut corners and do things cheaply. I don’t think good ones are a minority, or you’d hear a lot more about the issues this couple has than you do. It happens no doubt, but with the rate of flips in this city, I have a hard time believing most are really awful.

        • Based on your description, I would not call your developer a “good” one. Things not up to code, shoddy work are not signs of a good company.

          • Where did I say the work was shoddy…I just said they cut corners and did some things cheaply. All small stuff and not representative of the total work done, which is pretty nice. The idea you’re going to walk in and not find issues is silly. Even good developers still mostly use cheap labor to do the work.

            And some of the things not done to code were done for aesthetics (e.g., no handrail on the stairs, because it would have looked stupid to have one). My realtor pointed out that you’ll rarely walk into any house, new or otherwise, and not find something not up to code in some fashion. Where you have to worry are things that are structural or relating to utilities like this couple found after they moved in. For anything large that I wanted fixed, the developer fixed everything before closing. But that was again because I was fortunate enough to have an inspection contingency and did catch those things. The issue is sometimes less about the developer and more about the contractor they hire. Overall I’m happy with the work, but there are some places where they cut corners and I caught the big ones before closing. I think you’ll always find things you don’t like after you move in.

      • +1 on the unless you have cash up front to do your own renovations, your only option in DC is to take a gamble on the work that’s already been done. I would have loved to buy a house and managed the flip myself (so that it’s done “right”), but that’s just not an option.

        • Same. I get it although it is weird a bank will give you $700K to buy something you know nothing about rather than give you $500K + $200K to buy something and allow you to carefully do the renovation. I get it though. If they give you $200K and whatever you do only adds $100K in value, then they get screwed. Then again if they give you $700K based on an appraisal and the house ends up being a money pit, they take the same risk.

    • Most people who buy in DC are college boys/girls who don’t know much about anything practical. The usual homebuyer prep stuff (which most people don’t read) doesn’t provide tips for tracking down flippers, reading permits or ways to detect problems behind drywall.

      It does help if realtors have experience with the flippers who’ve done houses in question, but that’s no guarantee.

      Inspectors have varying expertise and my experience with them has been that they all miss something—significant water/drainage problems in a home I owned in Atlanta, minor electrical issues here.

      Having lived elsewhere and sold real estate to settle an estate, I can tell you that it’s worse in other places—I looked at dozens of homes before I bought in Atlanta and the housing stock was definitely worse than here, with cheap siding materials ineptly applied and obvious code violations. During the boom days in LA people had little recourse–inspections were not a contract requirement and despite many pages of disclosures (mold, etc.) there were gaps in disclosure that easily could screw a rookie buyer.

      Given that all of this comes on tops of problems with mortgages—I’ve gone through multiple closings including refinances, and most have had surprises (the wrong term on the mortgage, for example) for either me or the other party.

      people are poorly prepared for buying real estate, but it’s only through real life experience that all the gaps become apparent. I’ve gone beyond what a lot of people do–dragging along people with real estate and renovation experience, carefully choosing realtors, etc. and still there are bumps in the road.

      • “Most people who buy in DC are college boys/girls who don’t know much about anything practical.”
        Wow. That’s a sweeping statement. Made me not want to even read the rest of your comment.

        • What on earth is a ‘college boy/girl?” Someone with a college degree? I imagine that people with college degrees engage in internet investigation and permit record hunting at basically the same rate as the rest of the population, and if anything probably not LOWER.

          • It’s as a much a social category as educational attainment. I have a PhD, btw, and poostdoctoral training on top of it. OTOH, my dad worked in a factory and I’ve retained the skepticism about “experts”, managers and the like from my youth. Joining their ranks has, if anything reinforced it even more.

        • It’s harsh, but pretty close to the truth. You got people with six figure salaries taking out $700K debt on a house of cards, not really knowing much about what they’re buying other than proximity to “hot” amenities.

          • WHOA WAIT What “college boys/girls” have SIX FIGURE SALARIES?!
            Someone please tell me because I really want one of these jobs. Clearly I am doing something wrong.

    • My Google must not be as good as yours because when I Googled the name of the construction company, the LLC, or the names of the principals, the only bad things I came up with were links to the original PoP post from 2014.
      In any event, you can get burned by a flipper with a history of bad conduct. You can also get burned by a contractor who had a sterling record when you hired him or her. I know someone who bought a condo in a new, multistory residential building on U Street, built by a reputable builder. Within a year, there was water damage in multiple units throughout the building. There are no guarantees.

    • If it isn’t illegal, I can’t believe that it is legal to dispose of building materials that way. Whoever dumped it should absolutely be on the hook.

      As for attics, I haven’t seen an attic in this city. The only way to know what’s behind the walls requires x-ray vision.

      Googling Gulati wouldn’t help. I just did and only got this blog.

      DCRA assisted this company in breaking the law and you blame the victims?

    • houseintherear

      I agree with you a lot, but as the daughter of a great home inspector I have to fight you on that one point! The contract with any home inspector tells exactly what they’re inspecting and not inspecting. A good home inspector sends a very detailed report with pictures and suggested updates/repairs. They also pay out the wazzoo for insurance, like a doctor would for example, to back up their work. Finding a home inspector that has been properly trained and kept up on their continued education and licensure is very important.

      • Accountering

        As the son of an equally good home inspector, I am just going to +1 here. My dad is a rockstar, and routinely saves his clients tens of thousands of dollars, and a ton of frustration.

    • You’ve NEVER felt sympathy for people who get screwed by flippers? Seriously?
      “Caveat emptor” is great as far as it goes, but no seller is going to let an inspector or a buyer pull up floors or open walls to ensure that everything has been done properly and is up to code. Not all houses even have attic access, and even if checking up there IS a possibility, there’s no guarantee that it mirrors what’s in the rest of the house. Not everyone is an expert on the permitting process, and even if there are permits they don’t tell you the whole story of what the contractor actually DID. And how is a buyer supposed to identify the sewer line problem that you mentioned? By making sure it rains just prior to the inspection?
      Even though I agree that buyers do need to take every step they can in order to make sure they’re not buying a lemon, as a matter of policy it makes a whole lot more sense (and is much more efficient) to hold professional contractors responsible for the quality of their work than it does to expect each and every buyer to be an expert on home building and permitting.

  • A Landis Bid of 400k is a lesser contractor bid of 250k-300k. You went to the guys who do 3 million dollar home remodels.

    Caution below: I’ll be doing some ‘victim’ blaming.

    This isnt a case of ‘wrong place wrong time’, this happened because because you made a poor investment with your money. When you’re inspector said “This doesn’t appear to have insulation” and “this house has outstanding permits” you decided to take the risk. This is akin to deciding to open up a restaurant that fails.

    So, what do you do? Hire someone to fix the structural stuff. DIY what you feel comfortable doing, wait a year or two, take out a HELOC or refinance against the increase in value, and finish whatever else you feel is necessary.

    Welcome to home ownership of 100 year old houses. Next time you make a half a million+ investment, don’t rush through it.

    Good news is that you probably still got a decent deal, and will probably break even over the next 10-20 years, especially if you do the little things like demolition, drywall, and painting.

    • Thanks for the support and other kinds of input.

      We have received a lot of calls and emails from others going through the same thing and wanting advice on how to fight. So great if telling the story helps. Are we motivated by selfish reasons (to get some of our losses back). Yes. But it’s also because we don’t want people going through the same thing. Including the carbon monoxide leak that could’ve killed someone (us). And yes, the lead and asbestos elements are some of the worst parts. Great that Popville is covering this and that more people are discussing the problem.

      I can almost understand the skepticism or tendancy to blame the homebuyers (me and my wife). As someone who is a former journalist and does anti-corruption for my job, I might have found myself thinking thoughts like that (although I hope not). In journalism, the old axiom is that when your mother tells you she loves, you, you check it out. So I never thought I’d fall into something like this.

      But then it happened to me. And if can happen to us, it can happen to anyone. The people who did our house have done probably hundreds of houses, and it appears there are permit issues for many of them (and that’s just one set of developers…tip of the iceburg). And that’s why we’ve been getting calls and emails from people going through the same thing. People are embarressed and a bit timid to speak up. But that’s what it’ll take to chaneg things.

      We have since spent lots of time researching the illegal construction documented by DCRA re: our house, and researching the LLC and all the people and numerous accomplices involved. And it has still been extremely hard to track things down. Especially with DCRA rejecting our FOIA requests for seemingly no reason, with DCRA saying ‘oh sorry we didn’t keep those permit records/don’t have them,” with title insurance companies denying us subpoena requests to protect themselves, etc. The toughest issue to overcome is other homeowners who are too afraid of their home values falling if they speak up with us (the repeat offenders in the flipping business count on that as part of their business model).

      And it doesn’t help that D.C. (a city of 650,000) has exactly 2 and a half inspectors devoted for illegal construction. For an entire city. No wonder the bad developers feel cocky and the good developers like Landis Construction feel frustrated. Cities of equal size, such as San Fran all have more than that on the job to catch illegal construction and protect consumers. Nairobi, Kenya actually has more than two and half inspectors! Plus the developers (including the people who did our house) tend to give a lot in campaign contributions. Those are some of the reasons this is an endemic problem.

      Buyer beware? Absolutely. But the buyer is not the FBI and even the most persistent home buyer does not have access to the kind of hardcore mortgage fraud prevention tools that are needed in the Wild West of D.C.’s house flipping boom. We got assurances that the permits were pulled properly before buying the house. We believe we had a decent house inspector. And of course we did the research about the LLC selling us the house – there was nothing found. The owner changes LLCs very often and D.C. has no beneficial ownership requirements (to show who is behind an LLC so consumers can connect the dots). Also, the stop work orders for that LLC were under other people’s names because it seems DCRA is not good at being motivated to help consumers to connect the dots (and DCRA often dismisses SWOs without explanation).

      The home inspector never told us there was no insulation (that was discovered later, in winter), so I don’t know why “anonymous” would think/write that. Home inspectors don’t drill through walls and can’t see through them either.

      In any case, regrets for the rambling post but thanks for the support and good input.

      • ugh, i’m so sorry this happened to you and your wife. i read the story this morning and it’s a nightmare. i’m guessing anonymous above didn’t read the story, because i don’t get that comment about the insulation either.

        thanks for suing these assholes – this should be a MUCH bigger issue in DC than it is. also love that the one contractor has started his own pro-popup lobby, lolz.

      • Wow… Thank you for sharing your story and continuing to spread the word so this broken system can eventually get fixed! The flippers who are crooked will get their karma!

      • Don’t take all the “buyer should have been aware, no sympathy stuff” to heart. People need to distance themselves from the victim so they can feel this could never happen to therm. (Learned that way back in rape crisis training, where the tendency to blame the victim comes from.) Glad you wrote that you are a trained skeptic. My younger me might have thought I’d never be taken in by scammers, but having been twice (by my dentist and another professional, for just a few thousand each, nothing like your losses), I’ve learned that even professionally skeptical me can be taken in when I need something and am vulnerable. We call can be taken at times, our vulnerabilities are just different.

        Wonder if there are organized groups who would advocate to change the way the city handles this building stuff. That’s the only way change gets made. They’d be up against a lot of entrenched real estate and banking interests.

      • Sorry this happened to you and good luck recovering the expenses of fixing the house.

      • Thanks for sharing your story.
        I have friends who bought a home in upper NW near Mazza Galleria. Not a gut job but a renovation before it was sold. A year or two after the purchase they hired someone to replace the vinyl siding on the back of the house. It was then that they discovered there was no insulation under the siding. That’s not something a home inspector would be looking for.

      • You seem like the perfect person to lead a reform effort if we can find a few engaged councilmembers to back it (as if you didn’t have enough on your plate). It’s very clear that laws need to be changed and that DCRA itself needs to be gutted and rebuilt. There are some competent folks there, but it still has vestiges of the days when DC gov was little more than a jobs program of last resort.

      • Just chiming in to echo what others have said. I’m sorry this happened to you and thank you for sharing your story. I’m sure it’s not easy to put all of this out there for everyone to scrutinize. Best of luck to you and your family.

      • I would assume the skeptics here trying to blame you and your wife are just people who have not been able to afford to buy in this city so take some enjoyment out of seeing others do so and end up in a bad situation.

        Maybe I would have been like that a few years ago too, but having now bought a house (a flip job as well), I have seen first hand how the market is tough on a buyer, there is little time to do much homework, and even when you get lucky with contingencies and such, the seller still has a lot more bargaining power than you do. And the reality is, whether a flip or not, your options to get in and learn everything about a house are pretty limited.

      • SusanRH

        We are just in the beginning process of figuring out all the problems with our house. I believe they will be numerous and extremly costly. We didn’t buy from the flipper, we are the second owner after the flip. Now we have to figure out how to come up with money to fix the place and I guess sir in the house until we can recoup the cost. Do yo have ant advice on financing the repairs?

      • Do you have any advice on finding an attorney to handle these sorts of claims? Thanks for sharing your story, and I’m so sorry this happened to you.

      • Is Crampton Looking for a Payday?

        If everything in this article is the truth with no spin, then I have sympathy for the Cramptons.

        As a Civil Rights Litigator with 20 years of experience, I have seen all types of Plantiffs. This includes ones that absolutely deserve everything they are asking for to those looking for a payday and looking to extort the defendants.

        I have been following this story and here is why I am skeptical of the Cramptons intent:

        1. It appears they filed the lawsuit just before the expiration of the 3 year statue of limitations and they never tried to work it out with the Developer. To an experienced professional in the legal industry, this smells like looking for a payday.

        2. The sum of money and damages they are seeking is way out of proportion with what they have suffered, even taking the Cramptons at their word.

        3. Causes of action that are not legitimate are being brought up even though they have no legal basis. For example, there is no requirement to test for asbestos in residential properties. If you don’t test for it, how would you know about it to disclose?

        I hope I am wrong and this couple is legitimate. But, there is a difference between getting a sore neck from a car collison and receiving appropriate compensation vs. extorting millions from the defendants.

  • Local construction and inspection professional here.

    One of the major contributing factors to these issues is the lack of competent Code Enforcement in this city. The jurisdictions in southern MD and NOVA have great national reputations, but DCRA is a laughing stock nationwide. They have no idea what they are doing.

    The last issue citizens raise with their council members and mayoral candidates is whether or not they will create an effective enforcement office. As far as voting and participation goes, we are asking our elected representatives the wrong questions. It’s an embarrassment. My neighbors care more about dog parks than code enforcement.

    If the local news and media wanted to do an expose on the failure of DC government, the code enforcement of renovations and new construction would be a great start.

    Unless there is a death related to poor code enforcement, we will all forget about this when next election cycle comes around and it will not be an issue unless it gets posted on POPville or WAMU just happens to post something on this blog.

    • This speaks to the technical stupidity (about most practical things) of people in the DC area. the people who spend their time whining about “finishes” and central air (window units often are more practical) are just laughable. You are right that people need to get beyond superficial stuff like dog parks in dealing with Council. OTOH, suburban jurisdictions can be jokes. I’ve worked in buildings in MoCo that had obvious code violations despite months of red tape in getting occupancy permits.

      • You think central air is superficial? Are you a hundred years old?

        • “Superficial” may be too strong a word, but at least in my experience, people place WAY too much importance on central air, granite countertops, and the color of appliances. They seem to think that it’s impossible to live without these amenities, and will even choose homes in significantly worse locations simply because they have OMG GRANITE! This problem is not unique to DC, though.

          Seriously – most people are probably best off in a thousand ways buying a well-maintained owner-occupied house in a ‘hood as close to downtown without spiffy finishes versus a flip for the same price. Unfortunately such places are really not that easy to find.

          • Agree with you on granite. But in my experience, window air is NEVER more efficient than central air. It is cheaper to install, so immediately practical, but not efficient, so not more practical in the long run. And once you’ve lived with central, going back to window AC sucks. How much depends on the place – the sun, the trees, the cross breezes.

          • In what universe do people still go crazy over granite countertops? It isn’t 1990 anymore.

          • If by “efficient” you mean energy-efficient, I can’t speak to that. But it seems like a suspect claim given that you only need to run window units in the portions of the house you’re using, whereas with central you usually have to cool the whole house at ones. As far as comfort goes, I’ve lived with central air for most of my adult life, but my house has window units. It really doesn’t suck at all, though I suppose it could if you select units that aren’t appropriate for your space.
            @ Dude – I’m not a huge fan of granite either, but you know what they say about taste. The sales records don’t lie.

          • No, sorry, but central air is pretty standard. It isn’t a finish or upgrade. People want it because it’s completely practical and efficient and it is 2015, not 1950. I wouldn’t have even gone into a house that didn’t have central air. That to me screams that everything behind the wall is old, outdated, and probably going to need to be replaced anytime you open up a wall.

            Flip jobs have issues, no doubt, but if you think buying a old house is free of a multitude of problems and costs, you’re crazy.

          • My central AC for 1200 sq ft, on ALL the time from May ’til October cost the same in electricity costs as running one window AC in my bedroom at night only, and not quite as long a season due to better shade, in my last place. And it was an energy-efficient window AC. They just aren’t at all comparable.

          • Just read the daily rental and house sale comments. Complaining about perfectly good houses that are missing some silly item that will make the place look dated in 2 years.

        • It is compared to mini-splits.

      • I think it also speaks to the large degree of family money that comes into play for MANY people buying in the DC market. When you’re spending other people’s money, you simply don’t bother doing the legwork. You don’t properly value what you have. I know this because a lot of my friends have bought through this route. They didn’t work hard for that downpayment, they simply received it as a wedding or graduation gift. When you’re buying a place under those circumstances, you tend to focus on the superficial stuff like stainless steel, bamboo floors, and proximity to the local dog park. It’s this mentality of outsourcing the tough decisions.
        When you’ve scrimped like hell to amass $30 to 40K for a modest downpayment and closing costs, you really go all out to be careful with your money. There’s no Plan B, no lawyer/Dad to fall back on. Everything is at stake.

        • Yes, everyone in DC has family money and no one buys houses on their own merits. Let me guess, you still rent?

        • You and I have very different groups of friends. Very few people that I know here had any down-payment help from their parents.

        • So, you’ve just explained to me why it is that I took forever to buy a place when I bought, and so ended up buying in a structurally sound building, with a good reserve fund, and low monthly charges. Hadn’t thought of it that way. Thanks!

    • This is a great story highlighting some real problems.
      Not much in the way of “big picture” perspective, though.
      One can read the story and think it is just a few problem developers / problem houses or is a widespread problem affecting every renovation in the city.
      Downzoning doesn’t really solve the problem of low-quality renovations.
      Rather than downzoning huge areas of the city, we should be fixing the contractor licensing and home inspection process.
      BTW: Cutting costs by not installing insulation is really, really awful.

    • Wow. Just wow.

    • And yet, the mystery is that they can be bizarrely tough on stuff that actually doesn’t matter. My mother was forced to do $10,000 worth of electrical work on a basement apartment that turned out not to be required. And we had to pull a series of permits, including drawings, for a 12-inch fence footing around our front yard. When the inspector turned up, he kept asking “Where is this wall I’m supposed to inspect?”

  • AK REAL ESATE sells some the poorest quality flips in the city. Several local listservs have buyers with complaints.

    If you are looking at one of their houses, INSPECT THE HELL out of that house.

  • This story is one of the many reasons I did not want a flip. At the end of the day most flippers are in the business to make a profit, and that’s it! At least when you buy from another homeowner you can appeal to their human side as many people do by writing letters and other things. Another thing is the inspection, which many people have pointed out that they can’t see everything. This is true, but if I was buying a newly renovated home and the inspector found problems it would make me wonder what else is wrong. Heck, we go to open houses sometimes and I see flips where they did a sh!tty job on the grouting, tiling, or other little things. If you aren’t even going to take the time to do proper tile work, what have you done that I can’t see? Probably some shady and illegal stuff! This couple definitely got a raw deal and I hope these flippers go out of business forever.

    • So the people who originally made the house were not trying to make a profit? The homeowner you are buying from does not want to see a return on his or her investment?

      I see you’re point but to think just buying from a home owner will alleviate all your buying problems is naive at best.

      • Not at all what I am saying/said. It’s all a gamble, but I think buying from a homeowner is a better gamble than buying from a flipper. However, that’s very tough to do in this market because it’s competitive and that homeowner might have 10 offers and not pick your offer. We bought from a homeowner and got it for under list even though they had offers for over list and 11 offers total. Did we get lucky? Yes, very much so, but we also seemed to buy from people that cared about who bought their house and not making an extra 10 or 20k.

    • The “accusations” that the flipper wanted to make a profit drive me absolutely nutty. Of course real estate developers are in it for the profit, they aren’t undertaking expensive rehab projects out of the kindness of their hearts.

      • Accusation? It’s not an accusation…it’s a fact. Of course they want to make a profit and they have a right to do so. It’s about how much and how many corners they cut to maximize profit.

        • Right, that’s why I included the ” “. Some developers do it well and others don’t, but all want to make money.

  • I feel bad for these guys but $5m lawsuit??? They should be asking for the cost they paid for their house plus $$ for what it would sell for today in good condition. Asking $5m is just greedy.

    • You sue for that much so you can settle for 10% of the asking amount. Duh.
      Besides, if they get cancer 15 years down the road, they will need a lot of money.

    • I agree with Anon at 12:00 pm. It’s rare a person files a tort suit for costs, because there’s no guarantee the court will award you that amount and if you settle, you’re definitely not getting the amount for which you sued.

      I think the homeowners in this case should walk away with their entire economic loss, which includes not only money invested/spent on the house, but also any money they lost as a result of the negligent construction (they moved out and lived in a second home, additional travel, etc.). In all fairness they also may be entitled to noneconomic damages . . . emotional distress, etc. Punitive damages in this case would be helpful because they, if awarded after trial, not only teaches the bad actors in this a lesson, but also sets precedent in the district that other homeowners can use as leverage when they run into similar issues with negligent home construction.

    • You forgot to add in the cost of being exposed to lead and asbestos.

    • When our lawyer calculated the amounts for the lawsuit, we also thought it was too much (and still do!). He said, though, that we should leave it, so as to create pressure for settlement, especially since more than 90% of lawsuits never make it to court and settle out of court. (And yes, we know lawyers can have alterior motives when it comes to what amounts to ask for.) Also, the last settlement request we made was under a million. Our damages are over $700K, not including lawyer’s fees. We still have not settled because apparently the other side thinks it’s too high for us to get back what we lost. I don’t pretend to know what a fair amount would be (subjective question), and yes we’re biased because we’re involved, but gaining back what we lost seems fair to me. And if greed is the topic of discussion, what about the people who knowingly put safety and health at risk for profits, while ignoring the rules?

      • I’ll add to what Stuart says that in the case of fraud (i.e. the seller/developer intentionally lied to cover flaws that they knew they were obliged to disclose) damages are automatically trebled. So 700k + lawyer fees times three already gets us to near 3M.
        And punitive damages (i.e. those that exist as a disincentive to engage in fraud are on top of that 3M.

      • Stuart,

        So sorry this happened to you. With apologies for the unsolicited advice, I would strongly caution you against discussing your legal strategy here or in any public forum. It can only hurt you, and savvy defense lawyers troll blogs and social media looking for any and all such information. (I should know; I used to be one;) If I were you, I would talk to my lawyer about how the publicity for the case should be handled and do whatever he/she recommends.

  • Moral of the story – buyer beware…….. Don’t let the fancy floors and fresh paint fool you into thinking that the internals are as nice as the externals.

    Unfortunately there are a lot of bad (and lazy/cheap) actors involved in an industry that can be fairly opaque – especially to outsiders. Yes I think doing some research on the house and the developers is good but sometimes time is not on the buyers side. Going to PIVS is good but for those people who know to do so but for those who haven’t lived in DC – or read this blog 😉 – they are really outsiders with little knowledge of where to look to under the landscape from the bad developers to the unlicensed contractors (assuming they know who all of the players are). I am a business librarian and brought my research skills to bear on the many companies that are sending me letters to buy my house. I can tell you that finding good and reliable information LLCs that can identify bad actors is harder than just googling them. I use databases as well as other strategies and often the best information I can come up with is not much more than what is on the flyer they sent me. Saying that if what I am finding is superficial that is a red flag. Home buying even when the system works as it should can be opaque.

    • But this is literally true for any house you buy. Even if you’re lucky enough to get an inspection contingency, you never get to see what is behind the walls or under the floors. You think buying a 120 year old house that at some point in the 80s got an upgrade to the inside means you’re not going to find a ton of issues when you rip down the walls?

      The issue here and it is not something the buyer can do a lot about is systemic and has to do with the regulatory body that regulates these developers. As the husband of the couple at the heart of this story notes, DCRA is a disaster. I did the homework when I bought a house that was flipped. I looked for the permits. I saw they had been pulled by the developer. But rarely does the work get inspected by DCRA before closing happens. Pulling permits means little to developers when their work rarely gets checked.

      • The difference is, when you buy a 100 year old unrenovated house, you know to expect 100 year old systems. When you buy a flip, you’re paying for all that shiny, potentially unreliable, construction.

  • It seems like most houses on sale in DC, unless they are estate sales, are “flipped” homes. I mean you could buy a house that hasn’t had anything done to it since the 70s, but won’t you still end up dumping cash into it? Hasn’t anyone had a good experience?

    • I had a great experience. Bought a non-flipped home that was owned for 20+ years by a middle-class family and well-maintained in spite of being pretty outdated in terms of finishes. No serious problems with it since.

      Word to the wise – get an INDEPENDENT inspector. Not one that works closely with your realtor and has an interest in maintaining that relationship. I got the most cantankerous inspector I could find, and he caught a lot of things – most of them minor and the rest worth fixing on our own dime given the price of the house. But if he hadn’t caught them they might have turned into more expensive problems later on.

  • Construction professional here.

    I blame in part the home inspector. I’m sitting here looking at the pictures from the WAMU story, and I can see the defects just from the pics. The stoop steps in the February ’11 picture, a month before they purchased, looks like absolute hell. The flashing on the edge of the porch roof looks like hell. (As a follow up, the picture of them on the porch in ’15 picture also shows how shoddy the stoop work was, with exposed aggregate and a big crack on one of the risers). I find it hard to believe some of the other issues weren’t that obvious as well (rotting wood under the porch? Shouldn’t the inspector get under there and check it out?)

    Either way, it’s b.s. that flippers like this give the construction and “contractor” world a bad name. We’re not all bad and looking do to everything as cheap as possible, people!

  • Interestingly I just finally watched the movie “Boiler Room”. For those who don’t know, it’s about a pump-and-dump stock scam. I cringed while watching it as I saw the brokers giving the hard sell to the gullible people on the other end of the phone.

    I cringed from both directions – watching the scammers do their thing but also watching how gullible people can be.

    Clearly, there needs to be regulations in the market to prevent abuses but, people need to be less gullible also. It goes both ways.

    I’ve read here and elsewhere where people will talk about how you just don’t have time to do due diligence because of the hot market – how a house you love will be under contract to someone else 15 minutes after you looked at it. I personally would never get involved in something like that but I also refuse to get involved in bidding wars. As several others have written, I’m not making the biggest investment of my life based on “finishes” and a very brief/inadequate period of due-diligence.

    I highly recommend reading a book called “Tulipmania.”

    • “I also refuse to get involved in bidding wars.” Have you purchased property in D.C.?

      • We had the same philosophy. We had a budget and that was it, we weren’t doing escalation clauses, not paying more for a house than [we thought] it was worth, etc. That can result in taking a long time to find a house, but you have to do what you’re comfortable with. We put in our “best and final” offer and said if the seller came back and asked us if we could come up, we planned on walking.

        • Yes, it IS possible. I bought in a similarly overheated market with bidding wars in NYC, and I just refused to play, and would not pay over ask. It does take longer, but you do have to do what you are comfortable with, and you do end up doing better due diligence when your mind isn’t jus set on winning a bid.

      • Yeah, sorry but if you found a winner, this mysterious gem in the wilderness then you either overpaid to avoid the bidding war or it probably isn’t as great as you think it is and others realized it. Or you’ll need to dump a bunch of money into it to have anything inside of it compare to anything “new” on the market. I can assure you after nearly two years of looking, I finally bought because frankly I overpaid a little to get what I wanted. If I had dickered around at all, it would have gotten swiped out from under me.

        The good thing about that is even if you make a bad investment, a bad investment in DC is still probably a safe one. People will buy anything in DC to not live in a gigantic box of condos on Massachusetts or New York Avenues.

  • This isn’t totally off topic, but does anyone know a good (flat) roofer in D.C.? My wife and I bought a renovated house 2 years ago and have a subtle leak in the corner of our roof.

    • We used Shiner Roofing to resurface our roof. Based in VA but licensed in DC. I found them to be fairly priced (they weren’t the cheapest quote, but they were the most thorough), honest, and professional.

  • It seems as though there is a real business opportunity for someone here to start a niche inspection-plus service here in DC. Regardless of where you place the blame-fulcrum here, a lot of people would pay for a reputable company to do a little extra digging during an inspection. I would have loved someone with expertise (who did not have a financial incentive to encourage me to purchase) to dig through the building permits, court cases looking for actions against construction and development firms involved and the like. An expert firm could do this sort of report on a quick turnaround (likely on the same timeline as the appraisal and inspection) while the would-be-buyer deals with all of the other stuff that comes along with home purchasing. They could also advise prospective purchasers about extra items to check given the particular risks of flipped homes (e.g. when to bring out an engineer or a roofer in addition to a home inspector). In my humble opinion, a business like this could make a pretty penny and provide a great service at the same time.

    • Maybe you’ve given me my next business idea. The problem is, you’d be discouraging people from buying most of the houses they’ve looked at. And people don’t want that. They want to get into a house quickly, so they close their eyes, cross their fingers, and wish. Bet my business would have few clients. Ask a real estate agent who tries to warn people away from obvious lemons – people don’t like you raining on their dreams.

      • Real estate agents would hate it, as would developers. That said, you could really drive up the cost of quality homes, and if you’re really successful you could end up creating a financial incentive for some developers to be transparent/provide quality work. You would also really help buyers gain bargaining power in this sellers market — if sellers refuse to cure anything you uncover in an inspection and the deal falls through the seller would still have to disclose it to the next buyer and that’s a big deal. In addition, you could continue to offer services to new homebuyers after closing — classes on how to fix basic things (for the non-handy), fee-for-service work navigating the various tax incentive programs that exist in DC, etc… I would love something like that. You’d need one heck of an insurance policy though — wouldn’t want to end up the defendant in one of these suits if you missed something.

        • Also, this might be naive, but I don’t think you’d be discouraging people from buying most homes. I think there are a lot of homes out there where developers did cut some corners, but did not make insanely irresponsible/illegal decisions like the ones in the OPs case.

          • I agree with this 100%. But you have to remember, sellers have to agree to things too like an inspection contingency. Fewer would probably be willing to do that if this was the model out of concern this inspection “plus” would simply be a laundry list of things they’d be expected to fix because the person paid to have a bigger laundry list than a normal inspection would give them. I would guess a fairly high percentage of home sales happen in DC without an inspection contingency at all.

          • Well, the cool thing about a records-search-service is that the owner doesn’t need to be involved at all. Public records are… public. The issue is that even savvy buyers often don’t have the time or expertise to put together the research quickly. I think doing no inspection is beyond insane. Some people are “pre-inspecting” (i.e. going in w/an inspector and their Realtor before making an offer) and then waiving inspection. I’m not an expert, but owner typically has no control over whether buyer does an inspection, just over whether the contract is contingent on the results of the inspection. I hope someone reads this and starts this service before I house hunt again!

          • Well, I would imagine the buyer can prohibit inspections, although that would raise a lot of red flags. I have no doubt with the quickness some places get sold, it happens. The benefit of the contingency is that the buyer can still walk away so without a contingency, and without a pre-inspection, I’m not entirely sure if you do an inspection on your own after signing the contract, you can walk away from the contract because the inspection reveals any issues. My point was simply that sellers will, in a market with inspection “plus” as suggested, simply become even less likely to agree to inspection contingencies at all. Many already do. The market in DC is just buyer friendly and I would imagine this service doesn’t exist already for a reason. There’s enough demand that sellers have no reason to allow such a service to flourish.

          • I’d also note there’s a perfectly good reason knowing about shoddy developers is difficult until someone is so egregiously harmed like this couple that they sue. What homeowner who bought a total lemon is going to advertise it if they ever want to be able to sell that lemon to some other unsuspecting fool.

  • Where is the blame for DCRA? They are accepting bribes to approve sub-par work. They are the ones who are supposed to be keeping flippers honest. That is the real story here! Personally audit the DCRA inspectors–there is money flowing there.

    • It sounds like that is going to be part 3 of the story.

      • I’m interested in Part 2 on the developer. The developer mentioned, Insun Hofgard, has a vacant property on my street that is maybe 1/4 complete (big maybe) that has been sitting open to the elements all winter. From what I’ve heard, her track record is pretty bad.

  • It’s interesting to read the original GDoN post on this place on PoP from 2010.

  • AK Real Estate sells enough of these house to pay for a box at the verizon center:

  • It’s definitely buyer beware. I’ve lived in DC for 26 years and it’s known that the homes are over 100 years old. There are problems no matter what. It’s stated in the article that this is not a new construction therefore the buyer needs to do due diligence…common sense. This couple seems to be in it for the money…how come they want multi million dollars? Seriously? Those pics look so staged….they are playing victim. If this guy had so much time to do all this research on the Developer then he should have had time to do research prior to buying the house…probably on government time…don’t you think? So one sided.

    I’ve seen this city grow and people are wanting to live here thanks in part to the Developers. Yes, it’s not perfect but we should be proud our city is growing for the better! I’ve been here since it was known as “dodge city!” Not anymore. Stop hating and let’s just make the process right.

    • The problem isn’t that the houses are 100 years old. The problem is when fly-by-night developers do shoddy renovations.

    • This is a real a-hole comment. First of all, there are plenty of 100 year old houses in good shape. Second, what person in their right mind would go through what they have by choice? Did you read any portion of the article? The idea they are “in it for the money” is outrageous. This has clearly been a stressful multi-year battle for this young family that just wanted a place to raise their children. Even if they win it’s unlikely they’ll come out ahead.

  • OK I’m confused! If a person purchases a flipped home, and sells it later (say 4-5 years later, as I guess 3-yr statute of limitations that could affect various aspects), and it turns out there are code violations and/or the renovations were not fully/appropriately permitted, who would be at fault once the problems come to light? For example, 1) developer guts Petworth home in 2009, 2) Couple A purchases home in 2010, 3) Couple A resells to Couple B in 2015, 4) Couple B discovers that certain renovations were never properly permitted, and other areas of the home (eg insulation) are not up to code. Who would be liable for the repairs – flipper, Couple A, or Couple B? Who would be susceptible to a lawsuit, if anyone? I’m not sure if I’m seeing contradictions in the articles I’m reading or I’m interpreting incorrectly.

    • Generally speaking, liability is based upon duty and duty is based upon the relationship of the parties. In your hypothetical, the duties would be between the developer and Couple A, and Couples A and B. The developer in your hypothetical had a duty to Couple A to do the work on the house correctly because Couple A bought the property from the developer. He or she did not have a duty to Couple B, or some future purchaser. Ultimately, these duties are codified in the contract and can be waived to one degree or another. For example, if there is no inspection contingency – the ability to back out if the inspection reveals problems – the only thing the seller (in this case the developer or Couple A) would be liable for is latent defects – things that would not be obvious. But the contract would probably specify the kinds of latent defects and the time limit for them being discovered.

    • In most cases couple A would only be liable for defects they have personal knowledge of. The sick thing is that that is why many of the people mentioned in the WAMU story do not want to be named. Lawsuits are difficult and expensive, most people would rather hope the defect doesn’t show up while they are in the house, then unload the place on another unsuspecting couple in five to ten years who will be left holding the bag.
      Structural problems take a while to develop. I am betting unsupported open floor plan homes will be a huge problem all over the city about 10 years from now.

      • SusanRH

        I am dealing with this now! We have some serious structural issues starting to show on a house that was flipped 10 years ago. Not sure what we are going to do, probably go broke figuring out how to fix the place

    • In your scenario, it would depend on when Couple B learned of the issues. If they learned after they closed, no one is liable unless Couple B could show that Couple A knew of the issues and did not disclose them as required by law. Perhaps Couple A had no idea their addition built by the developer violated code. Couple B is also not required to make any repairs to bring anything up to code. The city is highly unlikely to say to Couple B, I know you bought this not knowing your addition was not built with proper permits, so now you have to tear it down. What happens is that Couple B would have to disclose that to any future buyer and buyer can accept or not accept. The issue is when Couple B or some future buyer wnats to renovate that addition and needs new permits. The city can then say, your option is to leave it as you found it or tear it down. If Couple B wants to make the repairs to bring things up to code, fine, but they cannot force Couple A or developer to do it. They can only sue really if they find out Couple A knew or should have known and did not disclose. I actually forced the seller of the house I bought who was a developer to show me the permits for some of the work that had been done when I bought it so I would know up front what I was dealing with. I think that is the point many have made above that a seller should do their homework. I was fortunate enough to have contingencies that allowed me to walk away. So the seller had an incentive to do a lot to keep the deal moving. Contingencies are particularly helpful with developers because most carry construction loans that have high interest rates and they do not want to be faced with putting something back on the market and delay closing another month. It’s also why so many actually try very hard to enter into agreements with buyers without any contingencies. Anything that is revealed by a post-contract inspection cannot stop the closing. An easy fix would really be to change the law to always allow buyers an inspection contingency – period. Then the buyer signs the agreement and knows they can do whatever level of inspection they want and always has the option to walk away. So many agree to waive it because they don’t want to lose what may very well be a very nice property to someone else who is willing to take the risk.

  • Makes me feel a teensy bit better about our outdated as-is fixer upper? At least we know what is wrong and still needs to be added or fixed. We found out about the insulation when we had to replace the plaster because the walls were falling down. Found out about plumbing issues because, well, there was no shower ever installed, just a rusted out clawfoot tub, etc. A home warranty, a gift from our realtor, helped during the first year when our furnace acted up. Good luck and god bless.

    • What do you mean you “found out” about the insulation when you replaced the plaster? No plaster wall is insulated. The plaster IS the insulation.

  • There were some prophetic comments when this property was previously featured…

  • I feel for the owner because I had a mildly (much) situation with a bad GC construction company. I also suspect that he created a volley of LLC’s and was more active in spending time eradicating bad reviews of his gerson cruz construction outfit.

  • Unfortunately I live in a flip job by a developer listed in the article. Can anyone who has successfully gone through the legal process provide more detail? we have dumped a lot of money into the house after the developer stopped responding to us, and I fear there’s more hiding behind the walls that will come to light down the line..or worse, prevent us from selling down the line.

  • unfortunately i live in a house by one of the developers listed in the article…has anyone gone through the legal process successfully? I’d love more details….

  • Y’all, my sister lives in this guy’s neighborhood and he’s trouble. He’s been trying to get neighbors and other people in the area to join his lead. He’s apparently trying to get more money and extort.

    Don’t believe what you read. Apparently the word is that his own Lawyer quit his lawsuit. The reporter should have done some research.

    Lesson to be learned that don’t believe everything you read and buyer beware!

  • We bought a house from the Developer mentioned in the article. They went above and beyond. We had a few minor issues and they fixed them immediately.
    I’m confused:

    Did Stuart Crampton reach out to the Developer or the Real Estate Agent when problems started occuring?

    How come he’s had so much time to do research after the fact and not before? Something doesn’t sound right here.

    I agree with the advice others have given him. If he was as smart as he claims to be, he wouldn’t be discussing the details of the lawsuit. Lawyers are constantly looking for info. Not sure about this guy.

    • Some of the comments at the bottom here sound like they could be posted by targets of the lawsuit.

      • Exactly.

        • +1. Also, just saw in the maryland court records that one of these people declared bankruptcy in 2010 while making $ off flipping houses. Appears that either he did not declare that income in bankruptcy, or he was a volunteer house flipper doing it out of altruistic concerns for the community (Habitat for Humanity maybe). Or maybe I don’t understand bankruptcy? But he also did a Washington Post interview around the same time as bankruptcy, bragging about his wealth. see: A jury might have to look at that.

    • “How come he’s had so much time to do research after the fact and not before?” Presumably because problems came to light after he moved in.

  • I think it’s really interesting people commenting and saying that the DC market is too hot to adequately research a house before buying it. This house was listed 11/26/10 and wasn’t under contract until 2/26/11 so it sat on the market for about 3 months and sold for $30k below list price. I don’t think this house is a very good example to try to make the argument that doing your due diligence in researching a house will cause you to lose it to another buyer.

  • This house is worth $221,000 now?!? Give me a break. I will buy it right now from this dude for $500K. I have been looking for a while now and a vacant lot in Columbia Heights is worth that. If this guy has been wronged, I understand but don’t commit fraud to get your compensations bro.

  • Is Crampton looking for a payday?

    If everything in this article is the truth with no spin, then I have sympathy for the Cramptons.

    As a Civil Rights Litigator with 20 years of experience, I have seen all types of Plantiffs. These include ones that absolutely deserve everything they are asking for to those seeking a payday and trying to extort the defendants.

    I have been following this story and here is why I am skeptical of the Crampton’s intent:

    1. It appears they filed the lawsuit just before the expiration of the 3 year statue of limitations and never tried to work it out with the Developer. To an experienced legal professional, this smells like looking for a payday.

    2. The sum of money and damages this couple is seeking is way out of proportion with what they have suffered even taking the Cramptons at their word.

    3. Causes of action that are not legitimate are being brought up even though they have no legal basis. For example, there is no requirement to test for asbestos in residential properties. If you don’t test for it how would you know about it to disclose?

    I hope I am wrong and this couple is legitimate. But, there is a difference between getting a sore neck from a car collison and recovering appropriate compensation vs. extorting millions from the defendant.

    • Re: legal basis of the claim, there’s a DDOE requirement to test for hazardous materials, including asbestos, before demolition, but the defendants appear not have disclosed the extent of the work, demolition. The lead liability is where the Defendants will likely have the most trouble, and that can be trouble. Liability seems clear. Surprised the defendants haven’t settled when they’re so exposed like this. But maybe insurance companies are offering to pay for the whole mess. That is, until/unless criminal activity is revealed. If/when that happens the insurance companies can often drop the Defendants like a brick and even sue to get their legal defense costs back (if fraud involved), leaving Defendants holding the bag for everything. Pride, emotion are always obstacles in these cases but it’s smarter for all parties (plaintiffs and defendants) to focus on settling.

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