Closing Costs

No way is John Cobarruvius going to even think about selling his home.
The location is good, for one thing, anchored near the bulb end of a quiet cul-de-sac in Clear Lake City's Bay Knoll development, just a few minutes via the family minivan from NASA's Johnson Space Center, where Cobarruvius makes his living doing something with computers that's largely indecipherable. There's the floor plan, what the homebuilder calls "The Crockett" -- two stories with soaring ceilings, lots of windows and a spacious playroom on the second floor that doubles as a place to display John's collections of boxing paraphernalia and slot cars. And there are the neighbors, largely professional folks who moved here for the same reasons that most people move to Clear Lake City: the promise of the suburban good life in a semi-planned community with good schools and decent, friendly professional neighbors with kids to raise in a safe neighborhood.

John, his wife, LaNell, and their children, ages eight and four, have settled in since John and his wife bought the house, the family's first new home, for $110,000 back in 1989. They've got no intention of leaving, and that's a good thing. Because if Cobarruvius were going to try to sell the house -- which he isn't, but just for argument's sake -- he'd have to face the question of whether or not it's even worth what he paid for it nine years ago, or if he'd be able to unload the place on some poor sap and keep his face straight and his conscience clear.

Because John's house -- and this is what bugs him to no end -- is pretty much a lemon without wheels.

Cobarruvius is an animated man with a tendency toward good-natured profanity, and a do-gooder streak that shows up in his occasional columns for the Pineloch Perspective community newspaper and sporadic responsibilities as block captain of the annual Pineloch Community National Night.

He also possesses -- or possessed, anyhow -- an instinct to trust, as when he told his wife, in earlier house-shopping days, that "there's no way the third-largest homebuilder in the country is going to screw us." He was talking then about Columbia, Maryland-based Ryland Homes, which stands today as the nation's fifth-largest homebuilder, and he remembers his comment with the self-effacing rue of the poker player who couldn't identify the sucker at the table, and only much later realized that this meant he was it.

This did not make John Cobarruvius a happy man, and John Cobarruvius is, by temperament, a happy man. In fact, as things kept going wrong with his Ryland home, as faults and defects made their presences felt, John Cobarruvius became progressively more unhappy. So unhappy that action became inescapable. He complained and negotiated and insisted and wheedled, and he sued on two occasions, coming away with a 11 split and a deathly fear of lawyers, and he taught himself in the process that the little guy has little chance when confronted with the legal firepower of a national homebuilder.

John Cobarruvius didn't much know how to go about tackling a behemoth he felt had done him wrong, but he knew computers. He had one at home. He'd been wanting for some time to learn to build web sites, so that's what he finally did. The address is, and it's a sight to behold: dozens of pages of carefully documented and cross-referenced photographs of his lemon house, his correspondence with the builders of the lemon house, lovingly scanned court papers and chronologies of frustration and disappointment.

He found similar web pages documenting dream-home dreams gone awry with Ryland customers in San Antonio and Dallas, and linked to those sites as well. Up at the top of the opening page, he quoted the Houston Division president of Ryland: "Please feel free to visit any Ryland neighborhood and ask the Ryland homebuyers about their experiences."

John Cobarruvius thought this was just hysterical, considering, and he wasn't about to wait for some random advice-seeker to knock on his door. "Well, in that case," comes John's peremptory reply, "look here...."

Plenty of people did. And it turned out that a lot of folks, many of them first-time homeowners like John Cobarruvius, were turning up remarkably similar problems, and remarkably similar frustrations in settling those problems, with their Ryland-built homes. John kept adding pages to his web site, expanding his research, compiling a file of cohorts and community activists until he became a Johnny Lemonseed of the Web, sowing informed discontent and consumer awareness. And so John came to understand that he wasn't alone. That other people felt ripped off, misled and abused as well. And that when life gives you lemons, you could make lemonade, but it might be more effective to compile an inch-and-a-half-thick sheath of documentation, title it "A Request for Review of the Building Practices of Ryland Homes of Texas," and deliver it, fingers crossed, to Texas Attorney General Dan Morales's office.  

It started with the windows. Which is to say that water started coming through the windows. Hurricane Chantall hit the Texas coast in August of 1989, just months after Cobarruvius had moved into his brand-new Ryland home, and by the time the storm petered out, Cobarruvius's carpets were soaked with water that blew right in through the panes, collected on sills and spilled onto the floor. It happened in the dining room, the living room, the bathroom, the upstairs game room and an upstairs bedroom. Most of his Clear Lake neighbors in new Ryland homes, he found, had the same problem, and so did Ryland owners from Pasadena to Richmond.

The homeowners called Ryland, of course, and Ryland sent reps out to survey the damage. It was clear enough to the Ryland people that the water was coming into the homes, and the company's Houston South Division sent out letters a week after the storm informing homeowners that Ryland's insurance carrier would be available to determine what, if any, damage may have resulted from "failure of our products." Ryland eventually repaired the water damage, but the letter went on to say that the homebuilder would be meeting with the window manufacturer -- the Dallas-based General Aluminum -- to determine the cause.

The next letter from Ryland came two weeks later and said that the homebuilder and General Aluminum had met and decided to test the windows in some houses where leakage had been reported. The tests would be performed by pointing water hoses with spray nozzles at the windows and blasting away at maximum pressure. "All leaks will be noted," the note read. "Glass will be removed, new bedding applied and the glass replaced. Where necessary, new glass will be installed." And "within one week, General Aluminum's crews will return to ... retest the windows ... to ensure the completeness of the seal."

Almost a month later, Ryland issued another letter to homeowners, and this one switched tacks completely and, as more than a few homeowners have complained, unilaterally. After further consideration (and an aborted three-contractor effort to painstakingly repair the windows, pane by pane), Ryland had concluded that there was "a more complete and effective solution to this problem," and the solution was this: Ryland was going to leave the leaky windows where they were, but install storm windows over each and every one. The letter apologized for the delay, but asked homeowners to recognize the importance of "a total solution to the problems."

Signatories Ray G. Woodruff, then vice president of operations for the Texas Region, and James C. Black, then division manager of the Houston South Division, further touted the storm windows' "additional energy-saving benefits" and concluded on a reassuring note, urging homeowners who "are approaching or have passed the one-year warranty period" to "be assured that Ryland Homes will honor its commitment to take care of the items you have called in."

John Cobarruvius didn't know what else to do, and he didn't know why not, so he took the storm windows. One of the largest homebuilders in the nation surely wouldn't screw him.

But there was something else Cobarruvius didn't know, something that Ryland didn't tell him, which was that in the wake of the flood of leaky window complaints, Ryland had commissioned Kingwood-based Knight Engineering Services to determine the cause of the leakage. Knight delivered its conclusion on October 20, 1989, and the conclusion didn't say much for the original windows. The report found leakage around individual window panes as a result of incomplete bonding of the sealant between frame and glass, especially on some panes that were cut so small as to have no overlap with the frame. It found leaks to the inside of walls because many windows had no sealant at all in the lower corners. It found framing defects in the connection between the inner and outer frames of windows. And it concluded that "it is probable that these multiple-pane windows will be a continual source of major leakage for the homeowner" before recommending that the defective windows be replaced with sturdier, single-pane window halves.

Ryland's storm-window idea, meanwhile, got a lukewarm endorsement, complete with warning: "The storm windows appear to be an acceptable method of covering the defects of the General Aluminum windows. However, they may not be acceptable to all homeowners. The enclosed space between the windows may also cause higher temperatures that could become an additional problem for the sealant."

Cobarruvius didn't see the report until December of 1996, when he took a break from jury duty to research Ryland's courthouse history and found the report in a document warehouse, where it had been filed after Ryland used it in its own suit against General Aluminum. That suit was settled out of court for an undisclosed sum and with a nondisclosure agreement that prevents both parties from discussing its results, but what it said to John Cobarruvius was that Ryland had hidden relevant information from him. By the time Cobarruvius had the information in hand and tried to sue Ryland to fix his windows, a judge ruled that the statute of limitations had expired. And of course Ryland's one-year defect warranty was long gone by late 1996, even though the company had proof in hand that the windows were defective mere months after Cobarruvius's original complaint.  

The engineering report wasn't the only document Cobarruvius dug up and added to his web site. There was also a list of more than 800 Houston-area homes with the same window problems.

John's name and address were on that list, and so were the name and address of his neighbor, Kevin Jolibois, whose windows were not only the same leaky type, but were among the very windows tested by Knight in preparing their report. Ryland never disclosed the results of the engineering report to Jolibois either, even after he took the homebuilder to court. Jolibois had complained early on about the windows, and though most of his neighbors eagerly agreed to have the storm windows installed, thinking they were getting an extra value, he says he protested in writing on a work order that he accepted the "fix" only as a stopgap measure.

But after the stopgap stretched to three years and Ryland told him the company had done all it intended to do regarding the windows, Jolibois retained a lawyer and sued under the Deceptive Trade Practices Act. The engineering report didn't materialize during discovery, and the judge sent Jolibois and the lawyers out in the hall to come to an agreement. Again, a nondisclosure agreement came attached to the resolution, but Jolibois will say that he took Ryland's third hallway settlement offer, and that it more than paid for him to have his windows replaced with high-quality double panes.

He also says, "If I'd had that report, I never would have settled."
And if John Cobarruvius and dozens of other Ryland owners who spoke with the Press had known about the engineering report, they could have at least known what to expect from their windows over the next several years.

Remember the report's warning about increased heat trapped between the storm and interior windows? That heat has wreaked havoc on Cobarruvius's house. With the storm windows on the outside and the original windows in place, a greenhouse effect is created in the airspace between, causing rubber weather stripping to peel away from the panes and hastening the disintegration of the already faulty bonding of panes to frames. John's web site contains pictures of windows with thumbs and rulers fitted into the gaps, and though the storm windows mostly prevent rain from coming in, they're not designed to be airtight, so there's little to stop the flow of air and dust into the house, and little to stop the flow of conditioned air out of it. And since the storm windows weren't designed for this particular application, there's the difficult issue of opening the spring-loaded panels in the thin space behind the flimsy originals.

"Those things are finger-breakers," according to Jolibois. Never mind that you'd have to take the storm windows off the house if anyone should ever want to clean either window.

The windows are probably the most galling complaint -- and the one for which Cobarruvius thinks he's found a smoking gun in the buried engineering report -- but they're hardly the only gripes Cobarruvius has compiled in his report to the attorney general's office.

His house, and thousands like it across the state, is sheathed in Masonite Hardboard siding, which was recently the cause of a national class-action suit because, in short, it works very poorly as siding. Driving around Cobarruvius's Clear Lake neighborhood, the problem is visible from the street. The siding absorbs water on exposed faces, causing it to swell, buckle and discolor. In extreme cases -- which are as easy to find as walking across the street -- the siding simply rots right off the house.

The class-action suit affects homes built since 1980 by Ryland and any number of other builders (Ryland has since ceased using Masonite siding in favor of a product called Hardi-Plank), and the settlement affords affected homeowners up to three reimbursement claims over a ten-year period. The settlement has also been poorly publicized, with information published on a web site (see, to which Cobarruvius's home page, of course, has a link) and picked up sporadically, since, by a few newspapers. Cobarruvius thinks that Ryland and other homebuilders should have a responsibility to inform customers that their homes were built with defective materials, but Ryland has made no effort to do so. Cobarruvius thinks that's probably because the terms of the settlement don't indemnify Ryland for using the soggy stuff in the first place, thus opening the homebuilder to defective construction suits of its own. Cobarruvius won his, though he didn't get as much money as he would have liked.  

That's hardly all. There's the issue of the Louisiana Pacific Oriented Strand Board sheathing, a plywood substitute installed as a roofing platform and floorboarding in thousands of homes by Ryland and other builders that was recently on the losing end of yet another class-action suit (see over defective materials. Homeowners -- at least those who are aware that there's even been a class-action suit -- may be eligible for compensation.

And there's Ryland's promised ten-year structural-defect warranty, administered through the HOW Corporation. HOW recently sent out notifications to thousands of homeowners informing them that the corporation has gone into post-bankruptcy receivership, which hardly bolstered homeowners' confidence in their access to redress. Not that it matters, according to Cobarruvius, who says the ten-year warranty covers little shy of the sort of defects that render a house uninhabitable.

Then there's John Winkler's air-conditioner dilemma. Winkler, who has a web site of his own ( /~jpwinkler/index.htm), co-authored the report to the attorney general with Cobarruvius. Like his Clear Lake counterpart, Winkler says he loves his neighborhood and the folks who live there, and when, in 1997, he had a chance to purchase a new home in his Mesquite community near Dallas, he jumped at it.

He bought a home with what Ryland advertised in its promotional literature as "high-efficiency air conditioning and gas central heat by Carrier." The problem is, "high efficiency," in this context, is defined by the Department of Energy and the EPA as a Seasonal Energy Efficiency Ratio, or SEER, of at least 12.0, and Winkler later discovered that his unit had a SEER of only 10.0 -- the federally established minimum efficiency for installation in new homes.

In answering Winkler's demands for a 12.0 SEER replacement, Ryland claimed that Winkler knew what he was getting when he closed on the house, and that "high efficiency" was a generic "term of art" used "innocently" by Ryland Homes, and that the 12.0 SEER unit was an available upgrade for which Winkler had not paid. The only problem with that argument is that the federal government established the definition of exactly what constitutes "high efficiency" all the way back in 1992, and John Winkler, who's worked in the commercial air-conditioning field since 1983, has a hard time believing that a homebuilder of Ryland's prominence went five whole years in complete innocence of any knowledge of the required specifications of its products.

Winkler calls this a case of bait-and-switch that may affect dozens of homes in his Stonecrest neighborhood. He, like Cobarruvius, wants the attorney general to take a closer look.

"There's wording to cover every bit of the process," Winkler says of the contracts and closing documents. "And the homebuilder wrote it. So have a lawyer look at it, even if you have to pay someone to do it. It'll be worth it."

Cobarruvius and his cohorts aren't lawyers, and they can't yet prove that they've been sold a bill of goods, but they've amassed a pile of evidence, anecdotal and otherwise, that suggests that may be exactly what they bought.

When John Cobarruvius bought his home back in 1989, Ryland's promotional literature was packed with the company's motto at the time: "Built for Life." He's saved some of those pamphlets, because he thinks they're funny, and because they anchor his current favorite play on words: "Built for Litigation." The joke comes courtesy of neighbor Roger Mahoney, who is one-third of a recently dismissed class-action suit against Ryland over the window problem. A judge ruled in a summary judgment for Ryland that the statute of limitations had expired, which you'd hardly think should apply to a product "Built for Life," which may well be one of the reasons the company has since abandoned that phrase (Ryland's PR officer Ann Madison parsed the phrase as meaning "Built for Living") for its current, more innocuous slogan: "America's Home Builder."

Ryland was founded in Columbia, Maryland, in 1967 and opened its first division office in Houston 17 years ago. Since then, the builder has opened operations in 270 communities, in 23 divisions, in 20 states.  

Since new in-house accounting measures were implemented in 1986, Ryland estimates it has built some 8,000 homes in the Houston area and another 4,000 in and around Dallas. Ryland currently constructs in the ballpark of 700800 homes a year in Houston subdivisions from The Woodlands to Cinco Ranch, and each one is sold with promotional assurances that "... we've done one thing especially well -- we've listened to our customers." Ryland has listened, they say, because they "want relationships with our customers that last a lifetime."

Ryland also touts the personalizing touches -- from design to service -- that come with its divisional offices and local service representatives. "Local teams make the difference," one pamphlet touts. But when Cobarruvius sent one too many complaint letters to his local Ryland team, the response included the suggestion that "if you have any more questions or concerns, please contact our corporate attorney, Timothy J. Geckle, in Columbia, Maryland." Later came the news that this same corporate legal counsel "has advised Ryland employees to refrain from any conversations with you on this matter."

Likewise, calls to the local Ryland officers were referred to a corporate press spokesperson in Maryland, who reiterated that Ryland stands by its storm-window solution and declined to comment on instances, such as that of Kevin Jolibois, in which Ryland had made out-of-court settlements on the window issue.

The spokesperson did speak in the company's generic defense: "Obviously, Ryland is committed to building homes of the highest quality. We would not have been in business for more than 30 years if that had not been a philosophy that we had put in place and followed. We would not have more than 150,000 homeowners at this point. We offer our homeowners one of the most comprehensive warranty programs in the industry. We meet our warranty and service agreements with our customers. They're very well defined."

Local attorney George Pain, who specializes in suits against homebuilders and has dealt with Ryland's attorneys on several occasions, agrees that "Ryland is not a bad outfit compared to some others. I work with their lawyers pretty well. They seem to have the attitude of 'Okay, we screwed up, we made a mistake, we want to do the best we can to get out of it and not make any further mistakes.' "

But Pain admits that attitude usually kicks in only after a lawyer has been retained. "Oftentimes the homeowner deals with underlings. Supervisors, construction supervisors, people at the lower levels. At the lower levels, they don't want to admit that anything was done wrong to their higher echelons."

John Cobarruvius understands that a house is a complex piece of construction. That windows will sometimes malfunction. That materials will sometimes be used that later turn out to have been defective. That even conscientiously built slabs will crack, and reality won't always conform to advertising. All he ever expected is that a company that prides itself on customer service as a key ingredient in the home-buying soup would make good-faith efforts to satisfy legitimate customer complaints. And that, to his mind, is all he never got.

It's a lack confirmed by dozens of Ryland homeowners in Houston, Dallas and San Antonio, few of whom think that the defects they've discovered in their homes are the result of any malicious action by Ryland. What their complaints all boil down to is this: The service they've gotten from Ryland, their "lifetime" partner in the home-owning experience, has been so odious that most -- John Cobarruvius being a shining exception -- have simply given up and chalked their experience up to, well, very expensive experience.

"It's almost as if," said one Ryland owner who didn't want his name used, "they try to make the whole process of getting a problem solved so difficult that, in the end, you'd just rather not even call them at all."

The Better Business Bureaus in both Houston and Dallas second that idea with files that report, in part, that Ryland "has a pattern of not settling complaints to the customer's satisfaction."

That pattern, it should be noted, was established in BBB files opened in 1994 and spanning a time period -- the past four years -- specifically singled out in Ryland's own literature as a period in which the company deployed a "substantially updated product line."

In response, Ryland spokesperson Ann Madison reports that the homebuilder has been in negotiations with the Houston BBB since July, and indeed, during the course of reporting this story, the BBB has changed its report to the inconclusive news that the organization is "in the process of developing information" on Ryland, and "does not have a report at this time."

"Any large publicly held company is going to have complaints on file, legal issues from time to time," Madison explains. "We wish that we could please everyone. We're glad that we can please the majority of our buyers."  

The Dallas BBB's report remains as quoted.
"I want the attorney general to review this," says Cobarruvius. "They should make a decision. I've volunteered my time to go and help them do that. Ryland, I don't think they ever will do anything for me. I want them to tell me what's wrong with the windows and help me fix it. Instead of standing behind their product, they want to stand behind their attorneys."

Remember the Ryland president's call for neighborly recommendation? The Press put that question to a dozen Ryland homeowners in Houston, Dallas and San Antonio, and it's not at all reductive to combine the spirit of their responses in a quote from San Antonio's Dwight Mulcahy, who has his own web site ( documenting his experience with Ryland, which does business in that city under the name Scott Felder Homes. On the site, Mulcahy includes a note to potential readers: "This started out as just a place that my relatives and friends could see the progress that our future home was making ... it has morphed into the bitterness that you see now."

What embittered Mulcahy was partly the way the builder destroyed trees he'd been promised would be protected, and partly the way he had to hire an independent contractor to convince the builder that the company had poured him a faulty slab. But mostly, it's the sluggish way the builder responded to what turned out to be legitimate complaints, even going so far as to ask him to take his web site down.

Asked what he'd have to say to an advice-seeker, Mulcahy goes the "bitterness you see now" sentiment one better.

"If I saw anyone that was potentially coming in here, driving along, I would run after them in the car and catch them, and basically give them my story. They told me I was responsible for at least four or five people ditching out."

That may not be the sort of "feedback we get from current and prospective homebuyers" that Ryland brochures claim to crave. But it might be exactly the sort of grassroots networking that could keep another few first-time homebuyers from waking up one fine morning in their new homes and wondering, like John Cobarruvius, if one of the nation's largest homebuilders was, unexpectedly, screwing them.

E-mail Brad Tyer at

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