New home headaches: Plumbing, mold issues force Longmont family out

This weekend, the Lilly family will be moving into their brand-new Longmont home for the second time this year.

John and Edie Lilly, their two daughters and two dogs have spent the past three months in a two-bedroom apartment after leaks in their newly built house caused a health-threatening mold contamination and forced half the family to sleep in a tent on the back porch for the summer.

Despite the home being under a 12-month warranty, the Lillys allege builder Meritage Homes Corp., based in Scottsdale, Ariz., failed to properly mitigate the damage when it first became apparent in June and refused to take further action when confronted with the family's ongoing issues.

John Lilly stands near a containment area in his home at 1633 Dorothy Circle in Longmont Friday. After moving into the new home in March the Lilly family had to move out because of mold concerns.

So far, the Lillys say the problem has cost them nearly $50,000 in doctor bills, mold inspections and removal, lawyer fees, and rent and mortgage payments as the 6,000-square-foot home sat empty on its lot at 1633 Dorothy Circle, in the Renaissance subdivision in southwest Longmont.

"We bought a new house because we wanted it to be hassle free," said John Lilly. "Instead, we got a lemon."

Meritage declined a request for an interview but said it adequately addressed the issues through its remediation efforts.

The company said in a statement, "We have been working diligently with the Lillys for several months, during which time at least two separate indoor air quality experts/industrial hygienists have investigated the home and concluded that there are no indoor air quality or mold issues; therefore, no further action has been recommended."


Two leaks, six tests

The trouble began in February, one month before the Lillys closed on the home, when a leak in the upstairs laundry line caused damage to drywall and insulation in the basement.

John Lilly said Meritage "did a good job" of repairing the damage, and the family moved into the home the next month.

Then, in May, Lilly noticed water dripping through the drywall in the kitchen. Another pipe had sprung a leak, this time in the upstairs bathroom.

Again, Meritage conducted the necessary repairs, sending three plumbers and a remodeling company to air out the drywall and prevent mold growth.

Air quality tests before and after the work came back clean, according to Meritage.

In early June, Edie Lilly began experiencing headaches, congestion, a sore throat and itchy eyes. Soon after, the Lilly's daughter exhibited similar symptoms

The family found mold under the carpet in an upstairs bedroom, where the daughter slept. Four separate air quality tests performed by private companies in July, September and November found elevated levels of mold, according to the Lillys.

Lilly said the test results — along with reports from a doctor on his wife and daughter — were presented to Meritage, but the company declined to conduct further testing or perform further remediation.

"They said, 'We aren't doing anything. We're done,'" Lilly said. "They dug in their feet."

Lilly hired a lawyer, and he and his wife offered to sell the home back to Meritage, an offer he said the company declined.

"Why wouldn't they want it if everything was fixed?" he said. "They could flip it and make a profit, but they don't want it because they know there's more wrong with it."

'They can outspend us'

In September, with nights too cold for his wife and daughter to continue sleeping outside, Lilly moved his family into a 900-square-foot apartment.

He eventually hired a Denver company, RemCon, to remove the mold, at a cost of $10,000.

Larry Pierce, RemCon's owner, said tests performed by his crew indicated a "fairly extreme" spore count.

"You couldn't visibly see the mold; we don't know where it was," Pierce said. But, given the high spore count, "there was definitely a problem."

Pierce said "some" water damage was apparent in the home, and RemCon removed drywall, cabinetry and insulation in pursuit of the mold.

"We took out way more building product than the original two companies did, and the final spore count was almost at dead zero."

This weekend, the Lillys are heading back home. Lilly said he and his wife are worried more problems will crop up down the road, and they remain convinced the plumbing work was substandard.

He plans to ask Meritage to pay for the cost of cleaning, but doesn't believe they will.

"They can out spend us and out last us," he said. "They know they're a big company and we're a small family, and eventually we'll run out of money."

'Need our life back'

His legal options are limited, too, because the contract he signed to purchase the home contains a clause that requires disputes to be settled in private arbitration rather than a court of law.

In arbitration, a third party — typically an arbitration firm — settles the dispute. Both parties involved in a conflict agree in advance to adhere to the terms of the settlement.

Critics contend the process can be unfair because firms regularly retained by large companies are unlikely to rule against them.

"People are agreeing to arbitration clauses without understanding what it means," said attorney Danielle Beem, of Denver firm Beem & Isley.

The process can be lengthy and cost tens of thousands of dollars, Beem said — giving an advantage to businesses rather than individuals.

The use of arbitration clauses in contracts is starting to be challenged in court, Beem said, but the Lillys have little legal recourse because of the expectation that real estate contracts require some negotiation between buyer and builder. The outcome is a voluntary agreement to abide by arbitration, among other things.

Other types of contracts, such as agreements between cell phone users and phone companies, are eyed differently in the legal community because phone users are not allowed to negotiate the terms of those contracts and cannot receive service without them.

Lilly does not plan on entering arbitration with Meritage. The process has already cost thousands, and the family doesn't have the time, money or spirit to continue the fight.

"We can't have our family in limbo for ever," he said. "We need to get our life back."



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