We signed a contract to build a new home in Ballston Spa, NY at Chapel Hill back on September 24. We lifted the "contingency" saying that we would forego our deposit if we did notget a mortgage on the house by closing date - then undetermined.
5 months later, we were informed by our lender, FHA - Federal Housing Authority, that with 5% deposit, the builder needs to provide a standard 2-10 year warranty. Please note the builder granted permission for a 5% deposit knowing we were going FHA, back in September when he took our monies totaling $15,600 or thereabouts. The house totalled $324K including upgrades that we paid out of pocket bringing the grand total of dollars the builder has to $20,699.
The builder, Traditional Builders LTD, owned by Mr. Joe Lucarelli is the number two builder in the Capital Region worth over $400 million dollars.
Through our attorney, we learned back in Februrary of that Mr. Lucarelli would expect us to pay for that warranty - which he claims he never heard of because they don't have any FHA buyers (hard to beleive). Further, we had to do the leg work to find a home warranty company for his consideration. When provided with the details, Traditional Builders informed us, through our attorney, that they would not comply because they would not release either business financials or his personal financials to the third party warranty company.
The only way to proceed was for us to scratch up another $11,200 plus closing costs in order that we could avoid needing said warranty. If we did not comply, we would lose the $20,699 he already had as stated above. The house was 85% complete at this point. Rock and a hard place.
We agreed, in writing, through our attorney to come up with the money (a full 10%) and move forward without the FHA warranty on February 10.
We had our walk through on Monday April 5. On Wednesday, April 7th, my husband lost his job. We then needed to put everything on hold till we could figure it out. We went on a prepaid 5 day vacation - with no job, and no dream house, and then spoke with our lender who agreed to hold the mortgage open for 30 days for my husband to get a job equal to or better than the one he held for 20 years.
He got a great position and started on June 2. But we had to use some money to get our bills paid, to maintain our credit etc. And reapply for that mortgage. We were now not able to put the additional monies down. Still fighting for the house we built, loved and dreamed of, we asked for reconsideration of the warranty again and were told a definite NO.
We were now living in a temporary home for 3 months and with school starting soon we had to find something. We took our remaining cash and bought a spec home from another builder - who paid half of our closing costs, had the 2-10 year warranty, and gave us some great incentives as well. The house we are in is wonderful, and T & B Associates are awesome to deal with. We closed July 30.
I have written to Joe Lucarelli several times, only to get very sarcastic remarks back via mail. He is refusing to split the money, or make any concellation at all. This stinks of discrimination against FHA buyers, and we want our money back. The house at 2 Chapel Hill is still sitting unsold. It has not been advertised. It is such a shame that this builder doesn't care about the power of the internet, especially in these hard times when people really investigate where thier money is going and real estate is in such bad shape.
My lawyer says that by the letter of the law, I forfeited the money when I lifted the contingency to start building. I say there must be moral and ethical grounds to consider here.
What can I do?
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