Shifty LLC + Shoddly Construction = 82 Owners Up a Creek

Google Streetview of Riverwalk

A reader emailed me a few weeks ago with a very interesting story, but I was unable to take the time to write up a properly-researched post. Mish has picked up the slack, and has the scoop on the likely mass default of the entire 82-unit Riverwalk condo complex in Redmond.

It turns out the developer sold out the complex, dissolved his LLC, and is living somewhere in the Caribbean. Meanwhile, unit owners are in the hole by as much as 50% of their purchase price, not counting needed repairs of as much as $50,000 per unit.

There are major defects that require about $4.1 million in renovation work to address underlying ‘envelope’ issues that cause leaks and mold issues in 11 units. The consultants said the exterior on the entire complex had to be replaced.

The home owners association (HOA) discussed five alternatives.

  1. Sue the developer. Since the developer left the country so there’s no one to sue.
  2. Pay the $4.1 million maintenance with a loan. However, no bank will issue a loan because the HOA fund has a high delinquency rate and not everyone is paying their dues nor are they paying on time.
  3. Make each home owner pay approximately $45,000. Who would be willing to do that when everyone’s mortgage is seriously underwater?
  4. Liquidate the entire complex, forcing everyone into foreclosure.
  5. Opt for Band-Aid fixes. Go into each unit, rip it apart and fix the problem. However, the consultants have said that the damages will eventually spread to all units because the problem is structural. The HOA has gone this route in the past but the problems in 11 units keep coming back.


As of the last HOA meeting they’ve narrowed it down to option 4 and a new option… beg the local government for help. So they’re sending a letter to the Mayor of Redmond.

County records show the 5-building complex as having been built in 1981, but based on other information I was able to find, it looks like it was an apartment conversion completed in early 2007, and sold by a now-defunct LLC.

The Riverwalk HOA also has its own Facebook page, where the owners are trying to figure out their options (which are increasingly limited).

Mish’s advice is probably the least financially-devastating option for most of the owners at this complex:

Under the circumstances presented, it seems foolish to make another mortgage payment or another homeowner’s association payment.

If you own a unit in that complex, your best choice of action is to consider walking away.

Considering that most of the owners at Riverwalk bought right around the time when real estate around Seattle was hitting its price in mid-2007, it seems unlikely that any of them would be able or willing to spend $45,000 on repairs.

With the news of the impending teardown of the McGuire apartments in Downtown Seattle a few weeks ago and now this entire condo association likely heading into default, I have created a new tag—construction-gaffes—to help us keep track as more stories like this hit in the coming years.

Update [3:30 PM | 04.30.2010]

The VP of the HOA wrote me to add some additional clarity to the subject. Here is his email.

My name is Bill Landon and I am the Vice President of the Riverwalk HOA in Redmond WA. On behalf of the Association’s Board of Directors, I would like to address the primary subject of [Mish’s] recent article “Redmond, WA Condo Association Votes to Mass Default.”

The headline [of Mish’s post] is incorrect, and the information is not entirely accurate. Neither the Board nor the homeowners have voted to “Mass Default.” There has been NO vote to terminate the condominium at this time.

The Board called an official membership meeting last month to discuss the current situation we find ourselves in due to the condition the developer has left the Association and our property.

During that meeting, we had our legal experts go over a whole host of options for the owners to consider in regards to our situation. We also had a report of findings from our architect that detailed a rough outline as to the condition and repair plan of our buildings.

Two weeks ago, there was a non-official meeting of a group of concerned homeowners who got together to brainstorm ideas for addressing our situation. As requested for that that meeting, I arranged for the Association’s architect to answer technical questions.

The Board’s take on both meetings is that owners want, and are coming to, a better understanding of the situation faced by the Association and themselves with respect to their investment. As a result, several homeowners have formed action committees to look into other “outside the box” options such as contacting the mayor, contacting their mortgage holder as a group, looking into government programs, etc.

The upshot is, this Association’s Board, along with its legal team, is still formulating a game plan and way forward. There will be additional meetings before we even consider voting on anything. Meanwhile, your blog readers should know that the headline [of Mish’s post] is flatly wrong. This community’s members have not voted to walk away from their Units or this Condominium.

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

104 comments:

  1. 1
    Pegasus says:

    Proof of how corrupt the “inspection” and “building codes” games are. Who signed off on this fiasco? How much did they get paid? Why are they not in jail? Where are the cops? This is theft and fraud on a large scale. Where are the arrests?

  2. 2

    I would wonder if an involuntary bankruptcy might be the way to go. Seemingly the defunct developer would have claims again other entities, and a bankruptcy might be the way to get those pursued. It would need to be funded though, and I see some other obstacles, like if it’s even possible to file an involuntary against a defunct entity.

    Does anyone know if this is a vinyl siding building? It doesn’t look like it, but I ask because there were a lot of condos in Snohomish put up from about 2000 on with improperly installed vinyl siding. You wouldn’t think that would be such a difficult job.

    Finally, this is one of the reasons I don’t like houses built this century. Older houses have stood the test of time, and were built with products that have stood the test of time (or if they haven’t, we largely know what their problems are).

  3. 3

    I’m going to have to take back my built this century comment. This building was built in 1981. I wonder if they replaced the siding as part of the conversion?

  4. 4
    Peckhammer says:

    Been there done that. I live in a building that had to fork over $2.7M to pay to have the building completely stripped and reclad, and to fix collapsing stairwells — for the second time in the building’s 20 year history. This type of situation is actually a fairly common occurrence in Seattle. Look around, look for those plastic-wrapped buildings on the horizon.

    I have stated this before: buying a condo can be one of the stupidest moves in the world. I learned my lesson the hard way. One piece of advice for people that buy into the condo lifestyle: Keep an emergency fund on hand to pay for assessments, repairs, etc.

    I keep a $50K emergency fund this very reason. So when I had to fork over $30K for the repairs of significant damage in my building, it was as simple as writing a check. For some, it resulted in not being able to pay the monthly bill and then being sent to collections where they had to pay legal fees and penalties. And for a few, it resulted in them declaring bankruptcy. So now, the rest of the building owners get to pay those assessments in addition to their own for the building repairs.

  5. 5
    me says:

    Spot on, Kary. It’s one of the factors that lead me to believe that the local market has quite a bit of downturn left. Not only are expectations of longterm depreciation not yet priced in, there appears to be quite a bit of risk with recent construction (last 30 years or so) – it takes a while for shoddy construction to become obvious, and by that time, culpable parties will have moved beyond reproach.

  6. 6
    Nixy says:

    Sorry, just saw that “me” posted what I wanted to say, and there’s no way to erase your own comments..

  7. 7
    matsayswhat says:

    Stuff like this is why I’m glad I never bought a condo and why I advise everyone I know against it. It’s way too risky, even with the best of inspectors. And really how many inspectors are going to inspect (and be able to) the entire building and/or complex?

    At least most home repairs can be, to an extent, on your own time table, and I don’t know that any one thing would crest $10k on a mid range house (outside of fire, earthquake, etc, but then you’ve got homeowners insurance)…

  8. 8

    RE: Kary L. Krismer @ 3
    Completely agree, Kary.
    I’ve got clients who want to avoid older homes because they fear paying for repairs.
    Maybe some of those homes don’t follow the latest trends, but to me they just seem a lot more solid than newer construction.

  9. 9
    David Losh says:

    Condo conversions have always been extremely suspect.

    Apartments are built for cash flow. That cash flow is a return on the cash investment in the land. You build cheap, but good, to keep down the cost of maintaining the building. That means no frills.

    When those buildings are converted to luxury condos, you still have to maintain the building. Without the cash flow, with a Home Owners Association saving nickles and dimes, By new owners expecting that the “new” condo they bought will just last forever, there are problems.

    This building is nothing compared to some in Seattle proper buildings that are rotted from the foundation up. It’s only because it didn’t sell yjay it’s a story at all. Most HOAs are just paying the bills, stuck in bad buildings, with little chance of resale.

  10. 10

    RE: Kary L. Krismer @ 2

    You Got It Kary

    A great way to make the glueboard exterior wood panels smell like mildew is seal them with panels. A proper way to panel them is machine gun them with breathing holes before panelling…..LOL….then why panel them at all?

    All of the units in my HOA that put panels up over glueboard wood exteriors went on the sales market within 6 months…then the new owners had them for sale within a year of purchase….they stink like mildew inside.

    Nope, don’t panel ’em, use paint on the bottom every year to prevent rot.

  11. 11
    Peckhammer says:

    RE: Kary L. Krismer @ 2

    There is nothing fundamentally wrong with the products used in modern construction. Well… maybe flake board, but you could easily make a parallel to modern automobiles: I’d much rather drive a modern auto for safely and performance reasons, so despite the lovely design of a ’56 Chevy, no thanks.

    The problem lies in building envelope design (architect/engineer) and workmanship issues (developer/construction company), IMO. The weather proofing systems installed in my building, which now utilizes a rain screen system and really smart flashing designs is remarkable — especially since I got to see the old “system” up close and personal.

  12. 12

    RE: Peckhammer @ 11
    Maybe it’s the workmanship rather than the building materials. During the height of the bubble, they were slapping up buildings pretty quickly, lettting things sit out in the rain, which encouraged mold, etc.

  13. 13
    wreckingbull says:

    RE: Ira Sacharoff @ 12 – I have to agree. I was downright shocked at the haste in which Ballard townhomes were going up during the boom. There is no way there was enough time for adequate quality assurance or proper attention to detail, even if the building materials and building engineering were sound.

    Many of these 4 or 8-plexes appeared to be done in some sort of partnership with a real estate agent and a builder, and the building was always marketed well before completion. I have to wonder if that played a role in the rushed construction.

  14. 14

    RE: Ira Sacharoff @ 12

    Vinyl Pannelling Problems

    Article in part:

    “…Many vinyl siding manufacturers market vinyl as being worry-free. While you don’t have to repaint vinyl siding the way you do with wood paneling, you do have to maintain vinyl siding. An extremely common problem with vinyl siding is moisture. Moisture can get trapped beneath the vinyl panels and end up causing problems on the inside of the home. Almost unbelievably, interior wallpaper can crack or peel because of moisture trapped on the outside, beneath the vinyl siding. In order to maintain your vinyl siding, you must frequently re-caulk the joints and trim….”

    http://www.ehow.com/about_5036258_vinyl-siding-problems.html

    All houses were built to breath, ask any builder….the homes in my neighborhood were built so air tight to be “energy misers” that port holes were drilled into the walls shortly after construction….vinyl pannelling on old 2×4 construction with cracks and breathing holes might work much better pannelling than newer tight tolerance air tight homes.

    The vinyl panels are carcinogenic after installation too [see article above]….perhaps that smell caused the owners to sell too.

  15. 15
    anonymous says:

    RE: matsayswhat @ 7 – Like a lot of fence sitters, in the near future you will regret not having bought a condo now. The real risk is in waiting to buy, not in buying a place with shoddy materials and workmanship.

  16. 16
    redmondjp says:

    Speaking of building materials, I am quite surprised that existing building codes even allow the use of chipboard for exterior sheathing esp. on the roof! And having watched many new homes go up in the past 15 years I have lived on the wet side, I have noticed many which appear to be lacking a proper moisture barrier or house-wrap (I like the breathable Tyvek myself). Ever read the instructions that come with the Tyvek on how to properly cut in a window opening? Then go and watch how the builders do it–you will simply be amazed and I’ll leave it at that . . .

    While visiting Hawaii (Big Island) a few years back, I noticed that all of the new homes going up were completely sheathed in PLYWOOD (no, none, 0%, waferboard/chipboard). Of course it is humid there, and exterior-grade plywood is the right product for the job. I suspect that their building codes require it. Now why don’t ours here, hmmm????

    I live just up the hill from these Riverwalk units and drive by them often. Got popcorn?

    p.s. Tim – love your use of the word ‘Shifty’ in the heading – had to read that a few times just to make sure!

  17. 17
    BubbleBuyer says:

    Given the choice between modern day construction and an older home I will always choose the older home most likely constructed by craftsmen versus new homes built by illegal immigrant construction workers hired because they were cheap.

    We live in a 97 year old home and it is built like a tank. Yes, the previous owners put on new siding, roof and tuck pointed the chimney. Yes, some of the roof soffits have a little roof rot and the rotted portions were cut away. We will have to repaint the trim this year as the house has the original wood windows, trim and some wood roof gutters. We had a tech install DirecTV a couple of years back and it took him 2 hours to install an outlet in the living room because he had to saw through solid 1″ thick wood (wood and lathe wall) to install the outlet. The only real maintenance we have to do is get the sewer line cleared of roots annually since we have the original clay sewer and roots can intrude.

    I figure that if a house has been around for 100 years, it is good for another 50 years at least. Can’t say that about a modern day home.

  18. 18
    Lunar says:

    The problem with condo conversions is they don’t need to have building inspections if all they do is cosmetic. New countertops, flooring, applicances and the like don’t require any further inspection. If changes are structural then inspections are needed. Likely these probelms were present when the building was apartments and just covered with new paint. This is an unfortunate side effect of condo conversions. There should be more regulations about this in the building codes.

  19. 19
    BelRenter says:

    Wow. No wonder there are suddenly so many “for sale” signs up in front of Riverwalk. I drove by many times when they were in the apt->condo conversion process. When the units went on sale I wondered why the heck anyone would pay $300k for a 2-bedroom apartment! What a nightmare.

  20. 20

    RE: redmondjp @ 16
    There Are No Good Materials Anymore

    We harvest small diameter trees that are much softer than old growth homes in the 70s, so it doesn’t matter. Home owners should always be on the look out for rot, especially near the ground.

    As far as living in older construction, yes you get a more solid frame and sometimes better walls….the drawbacks are cement bases and brick going through several earthquakes with likely cracks all over, rusty CRES piping, subpar wiring that overloads with no grounds, higher energy bills with thinner insulation and a plethora of money pit problems no one that owns them talks about….

    I’ve owned both types of homes and new is still better, but you need to paint and seal exteriors every year, glueboard or soft plywood.

  21. 21
    Lake Hills Renter says:

    Holy crap! I drive by that place all the time. It’s just a block or so from Redmond Town Center. They did indeed undergo a large reconstruction project around 2007. Wow, that really sucks for the owners. Shady dealings indeed.

  22. 22
    Lake Hills Renter says:

    By anonymous @ 15:

    RE: matsayswhat @ 7 – Like a lot of fence sitters, in the near future you will regret not having bought a condo now. The real risk is in waiting to buy, not in buying a place with shoddy materials and workmanship.

    Oh man. I hope this was sarcasm.

  23. 23
  24. 24
    SummitSeeker says:

    I wonder how much of the “old homes were built better” argument is based on survivor bias. We only see the homes that have made it, not the ones that were torn down over the years, so that gives us a false impression of the quality of all homes from a particular era. I do think materials were studier and builders more skilled back in the day, but we can’t pretend that the 100 year Ballard craftsman in impeccable shape today is representative of the typical house from that period.

  25. 25
    The Tim says:

    RE: SummitSeeker @ 24 – I think that’s the point. I don’t think people are saying that all homes built in a particular era were built better than those built post-2000, just that the ones still around today have proven that they were built to stand the test of time.

  26. 26
    Ryan says:

    Great job on this article; these are the types of stories that interest me the most. I bought a condo in 2005 and sold it approx 15 months later in Nov 2006 b/c I was concerned the market was overheated. The place was a condo conversion and a lot of the promises made at closing having to do with both my unit and the property in general were never followed thru on. Last I heard, the place is in legal proceedings against the developer for problems with the sidings and mold. I had to give a deposition about the promises made despite me having sold the place before any issues were discovered. Talk about getting lucky (although I did buy a new home in Aug ’08 that has declined in value)….I guess I should probably throw out a mea culpa since the Tim was telling everyone that prices were going to decline :)

    Please keep more of these stories coming…I would be interested in hearing about places on the Eastside like Tananger, Esplanade, Kirkland Springs, Kirkland Place, etc. Thanks.

  27. 27
    Lake Hills Renter says:

    RE: The Tim @ 23 – Hah. Thanks for the clue. I haven’t been around for a while so completely missed the reference.

  28. 28
    Pegasus says:

    Hey. This is not about the materials used to upgrade being better or worse than older materials. This is about criminal behavior designed to steal money from unaware buyers. This upgrade was done about 3 years ago. No way the condos, even if cheap material was used, will fall apart in that time. And no way was it the case of the condo HOA not maintaining it properly. We are talking two years here. Even dried manure and straw will outlast these condos. Someone needs to go to jail….maybe a lot of people; builder, inspectors, sales people, etc.

  29. 29
    Ross says:

    By Pegasus @ 28:

    Hey. This is not about the materials used to upgrade being better or worse than older materials. This is about criminal behavior designed to steal money from unaware buyers. This upgrade was done about 3 years ago. No way the condos, even if cheap material was used, will fall apart in that time. And no way was it the case of the condo HOA not maintaining it properly. We are talking two years here. Even dried manure and straw will outlast these condos. Someone needs to go to jail….maybe a lot of people; builder, inspectors, sales people, etc.

    I really wonder how many more shenanigans we’ll be hearing about during the next decade. I know a real estate attorney in Vancouver, BC who is handling claims for buyers of building put up during the 90s building boom up there — and based on that record, I suspect this is just one of many buildings we’re going to be hearing about. I think it’s partly the nature of the bubble.

  30. 30
    Someone says:

    The apartments in this place built in 1983 and with Stucco and not the vinyl siding. Thanks for your thoughts and info.

    Thanks,
    By Kary L. Krismer @ 2:

    I would wonder if an involuntary bankruptcy might be the way to go. Seemingly the defunct developer would have claims again other entities, and a bankruptcy might be the way to get those pursued. It would need to be funded though, and I see some other obstacles, like if it’s even possible to file an involuntary against a defunct entity.

    Does anyone know if this is a vinyl siding building? It doesn’t look like it, but I ask because there were a lot of condos in Snohomish put up from about 2000 on with improperly installed vinyl siding. You wouldn’t think that would be such a difficult job.

    Finally, this is one of the reasons I don’t like houses built this century. Older houses have stood the test of time, and were built with products that have stood the test of time (or if they haven’t, we largely know what their problems are).

  31. 31
    Peckhammer says:

    RE: Lunar @ 18

    Building inspectors are not required to inspect for building envelope types of issues. They are looking at wiring, plumbing, safety — not reversed-lapped WRB or flashing installations.

  32. 32
    LA Relo says:

    Makes you wonder about the ones they are scrambling to finish by June 30.

  33. 33
    matsayswhat says:

    By anonymous @ 15:

    RE: matsayswhat @ 7 – Like a lot of fence sitters, in the near future you will regret not having bought a condo now. The real risk is in waiting to buy, not in buying a place with shoddy materials and workmanship.

    What? LOL, please tell me you’re joking, because I’m sorry, but you couldn’t be more wrong… both on the risk of buying a condo AND me being a fence sitter.

    What I advise people I know is to buy a house if they can and want to buy. Don’t buy a condo, because in most cases there are way too many cons and not enough pros. For example, unlike the people above, and many condo owners, I don’t have to worry about $45,000 of repairs being needed on my house outside of a freak accident (fire, earthquake) that’d be covered by home insurance anyway! Let me know if you’d like me to go on :)

  34. 34
    matsayswhat says:

    RE: The Tim @ 23

    Hah, I should have read down before I responded!

  35. 35
    Cheap South says:

    RE: SummitSeeker @ 24 – The homes mostly survived; the original owners that lived with the lead and asbestos…not so much.

    Ryan @26; Gee, I rented at Kirkland Place from summer 95 to summer 98. From there I bought in Regentwood (Bothell) right after they had settled the suit against the builder. I closed in August 97; they paid me a ton to stay out of the property until it was basically rebuilt.

  36. 36

    By Peckhammer @ 11:

    RE: Kary L. Krismer @ 2 – There is nothing fundamentally wrong with the products used in modern construction. Well… maybe flake board, but you could easily make a parallel to modern automobiles: I’d much rather drive a modern auto for safely and performance reasons, so despite the lovely design of a ’56 Chevy, no thanks..

    I would much rather have copper than plastic pipe, although the modern plastic pipe does seem good. I still remember the original stuff though that had a life of about 10 years. As to the plastic hose that is now being used, I’ll trust that when I’m 85 years old, and then only if I’m buying new construction. ;-)

  37. 37

    RE: softwarengineer @ 14 – The idea you don’t have to paint vinyl siding is only applicable if you don’t care that the outside of your house is faded and looks like crap.

  38. 38

    You can also have these types of issues with houses. If it happens with a condo it can actually be better because you can share the cost of an attorney, and in some cases the cost of the repair can be shared (e.g. a roof on a four story building would typically cost each individual 25% of what a SFR roof of the same square footage would cost). The downside though is that your finances are caught up with your neighbors’ finances. If a good number of them cannot pay for this work, that can be trouble. Someone above mentioned having a $50,000 contingency fund. That might not matter!

  39. 39
    Lesley says:

    By SummitSeeker @ 24:

    I wonder how much of the “old homes were built better” argument is based on survivor bias. We only see the homes that have made it, not the ones that were torn down over the years, so that gives us a false impression of the quality of all homes from a particular era. I do think materials were studier and builders more skilled back in the day, but we can’t pretend that the 100 year Ballard craftsman in impeccable shape today is representative of the typical house from that period.

    On a block of 20+ homes, if only a few are original, that might be the case (that the strongest ones survived). However, on my block of 26 homes, only 2 were built recently, and the rest were all built between about 1907 and 1926. That they are all still here seems a pretty strong testament to the quality of the original buildings. There are many streets (at least near where I live in NE Seattle) where the vast majority of the houses look to be original, and they are in great shape. (I walk my dog three times a day and we have wandered all over Ravenna, Greenlake, Wedgwood, Maple Leaf, etc so I have seen many of these houses up close.) My 97-year-old house still has its original windows, walls and floors. Hard to imagine that much of what we can make today will have that type of durability.

  40. 40
    sallybuttons says:

    RE: Peckhammer @ 31 – I dunno…met with a contractor yesterday completing work on bank-owned condo project that went bust in S. Seattle. Contractor advised that these “bust” situations receive limited inspection as land use has laid-off many employees and these units have price points that it is in city’s interest to “clear-up” via project sign-off. Litigation seems inevitable as DCLU specialist present suggested to us both that future problems will be a civil matter – don’t cha know.

  41. 41
    Peckhammer says:

    By Kary L. Krismer @ 38:

    The downside though is that your finances are caught up with your neighbors’ finances. If a good number of them cannot pay for this work, that can be trouble. Someone above mentioned having a $50,000 contingency fund. That might not matter!

    Really good point. I equate buying a condo with walking into a bar and choosing 50 drunks to share your finances with.

    I am Mr. $50K contingency, and while that covered me this time, it might not have if more people had walked away from their units. Another point in favor of a SFH is that you can stage your repairs over time, or take remedial measures to mitigate further damage while you save up enough to do the work. In a condo, delays in repairs can be a reason people cannot sell their units, and that can get the HOA in legal trouble.

  42. 42
    redmondjp says:

    Kary,

    What’s your opinion on townhomes? I was seriously looking at them when I bought my house 13 years ago, was looking at “duplex” ones in which you only shared one common wall with your neighbor. Sure you have monthly dues to pay for landscaping & common area maintenance, but otherwise it seems more like owning your own home vs. being in a condo. Thoughts? Same issues as with condos?

    I was attracted to the “no yard maintenance” aspect of it, and have to admit that I do spend quite a bit of time just keeping my own yard looking presentable at my house–time that I could easily spend doing something else and probably more fun.

  43. 43
    Peckhammer says:

    RE: sallybuttons @ 39

    Trust me. Building envelope is not on the city inspectors list. They do not care about, nor do they look at the weather proofing. Buyer beware.

  44. 44

    RE: redmondjp @ 41 – I think my main concern there is what if your neighbor doesn’t keep up their part? You have some of those same concerns with neighbors in SFR, but the concern would be greater where it’s attached, or obviously part of the same complex. Also, I’ve seen covenants that made little sense, like a requirement that the exterior be painted every 10 years. You don’t have issues like resale certificates and such, which could be a PITA for a very small condo complex. And I think you’d have fewer issues with financing, but I’m not sure of that.

  45. 45

    By Peckhammer @ 42:

    RE: sallybuttons @ 39

    Trust me. Building envelope is not on the city inspectors list. They do not care about, nor do they look at the weather proofing. Buyer beware.

    I would think that would be more the architect’s or structural engineer’s role. But on the building in Seattle that’s being torn down, I was surprised to see some of the details on the third party inspections that the city required.

  46. 46
    wreckingbull says:

    RE: Kary L. Krismer @ 43 – I used to live in one. The part that scares me is that you usually have no reserve fund for when things go pear-shaped. I also think you have much less leverage over your co-owners when they refuse to cough up the change needed for an urgent repair.

  47. 47

    RE: wreckingbull @ 46 – Good point on the reserve fund. Not too many people put away $XX.xx a month for future repairs as can occur with a well run condo.

  48. 48
    One Eyed Man says:

    RE: Peckhammer @ 42

    Peckhammer, they had so many water problems with condo’s they changed the law in 2005. I’m not going to tell you that the inspection process necessarily picks up the problems, but a building envelope inspection (including weather proofing) is required after about 2005 pursuant to RCW 64.55 et seq. The Revised Condominium Act makes it applicable to condos. I’m not sure if the building permit or the Public Disclosure document would have determined the date for application of the Act to Riverwalk, but its possible they had completed the appropriate step before the Act took affect.

    Ҥ 64.34.073. Application of chapter 64.55 RCW

    Chapter 64.55 RCW includes requirements for: The inspection of the building enclosures of multiunit residential buildings, as defined in RCW 64.55.010, which includes condominiums and conversion condominiums; for provision of inspection and repair reports; and for the resolution of implied or express warranty disputes under chapter 64.34 RCW.”

    “RCW 64.55.030
    Inspection required. All multiunit residential buildings shall have the building enclosure inspected by a qualified inspector during the course of initial construction and during rehabilitative construction.”

    RCW 64.55.010 gives the definitions:

    ” (2) “Building enclosure” means that part of any building, above or below grade, that physically separates the outside or exterior environment from interior environments and which weatherproofs, waterproofs, or otherwise protects the building or its components from water or moisture intrusion. Interior environments consist of both heated and unheated enclosed spaces. The building enclosure includes, but is not limited to, that portion of roofs, walls, balcony support columns, decks, windows, doors, vents, and other penetrations through exterior walls, which waterproof, weatherproof, or otherwise protect the building or its components from water or moisture intrusion.”

  49. 49
    Peckhammer says:

    RE: One Eyed Man @ 48

    Interesting. I assume that is for new construction, and not older construction undergoing remediation today.

  50. 50
    CCG says:

    By Pegasus @ 1:

    Proof of how corrupt the “inspection” and “building codes” games are. Who signed off on this fiasco? How much did they get paid? Why are they not in jail? Where are the cops? This is theft and fraud on a large scale. Where are the arrests?

    I’ve been asking that since Franklin Raines “lost” $9 billion back in 2004 and walked away to a $100,000 monthly paycheck that we all get to pay for.

  51. 51
    EconE says:

    With regards to all the condo “conversions” over the last decade, I wonder how much was the original owner(s) bailing ship when the deferred maintenance reached a tipping point, prompting them to give it the “pergraniteel” treatment and leave the major repairs to future owners.

    Were the original owners doing the conversions, or were they selling the whole complex to someone else who subsequently converted and sold?

  52. 52
    One Eyed Man says:

    RE: Peckhammer @ 49

    I know that it applies to conversions under Sec 64.34.073 above, but I never actually worked on a deal where the new law applied and I don’t know all the ins and outs of how it applies. For example, if you don’t need a building permit for conversion I’m not sure if you need to get the inspection.

  53. 53
    The Tim says:

    Please note the update to this post with some more detailed information from the VP of the Riverwalk HOA.

  54. 54
    Peckhammer says:

    RE: wreckingbull @ 46

    Reserves are typically for items that need periodic replacement and have a predictable useful life. Most condos do not carry emergency funds as part of their reserves. In fact, I’ve only heard of one that claimed to.

    And speaking of emergencies, one of my greatest fears is having an earthquake large enough to result in my condo being red-tagged. I cannot imagine trying to sort out the aftermath with 50 owners. I think it would result in loss of all my equity.

  55. 55
    One Eyed Man says:

    RE: EconE @ 51

    I think doing a conversion was outside of the area of expertise of most investor type owners and they sold to developers who do conversions. I know of at least one developer locally that specialized in doing conversion deals. When condo prices moved up, their was a feeding frenzy of conversion guys trying to buy up complexes cause it was the fastest way to get to market. A client of my old boss in Orange Co bought a 200 unit Las Vegas apartment complex in about 2002 for 50K per unit and sold it for over 100K per unit in about 2004 when several conversion guys started a bidding war for the complex. I recall reading in the Puget Sound Business Journal that Mastro bought several apartment buildings to convert in about 2006.

  56. 56
    The Tim says:

    By EconE @ 51:

    Were the original owners doing the conversions, or were they selling the whole complex to someone else who subsequently converted and sold?

    I don’t know about this complex specifically (though I suspect the latter in this case), but I’ve heard of both. There is a complex in Woodinville (Timber Ridge Condos) that had some sort of major problems, but since it was developed by the company that owned it when it was apartments (Equity Residential), they at least had someone to sue.

  57. 57
    One Eyed Man says:

    RE: The Tim @ 56

    So The Tim, did you try to contact John Midby at Riverwalk’s old LV address to see if he was connected with Riverwalk and could provide any information? If the number’s still good and he was actually part of Riverwalk, I assume he probably doesn’t take calls from Washington area codes.;-)

    I thought about checking the Riverwalk deeds to see who signed them and maybe the NV LLC’s to see if Midby came up but if he was involved I doubt that he would take a call.

    John H Midby & Assoc Devlprs (John H Midby & Associates Inc*) Is this your company?
    Claim This Profile3930 Howard Hughes Pkwy # 260
    Las Vegas, NV 89169-0905(Las Vegas, NV-AZ Metro Area)
    Phone: (702) 362-2111

    http://www.manta.com/c/mmjf12f/john-h-midby-assoc-devlprs

  58. 58
    EconE says:

    RE: The Tim @ 56RE: One Eyed Man @ 55

    Thanks for the replies. I guess it just sounds like a shady business in general. Just my opinion however. I think that in this case, the thing that really irks me is the fact that the developer is sitting somewhere in the Caribbean sipping mojitos.

    Perhaps the owners need to hire some sort of bounty hunter. Grease the palms of a few cops/officials on a 3rd world Caribbean island and I’m sure they can find a reason to “detain” the guy.

  59. 59
    wreckingbull says:

    RE: Peckhammer @ 54 – Perhaps, but in a townhome, you are relying on blind faith that the other members will have the cash to pony up for said expected expenditures, let alone any emergency. Not a good thing when you see the first water stain on the drywall and realize a new roof is in your future. Do you want to fund the roof for the entire townhome complex? You might not have a choice.

    I feel lucky to have gotten out of the townhome unscathed.

  60. 60
    Markus says:

    Not vinyl but stucco.
    This makes me very sad. I thought it was weird when tehy started this conversion project. It seemed out of place because the building wasn’t top quality to begin with but from what I could see driving by they tried to put some effort into the conversion.
    Just bad news all around.

  61. 61
    Peckhammer says:

    RE: wreckingbull @ 59

    Ah… I didn’t catch the bIt about you having lived in a townhouse. Really good points.

    I’ve always thought Townhouses were less risky than condos, but I can see how they could be just as precarious. I almost bought a new one a few years ago. I had it inspected as a condition of sale. My inspector found numerous problems, such as the decks not draining. There was three inches of standing water on the deck, and the threshold was installed in a way that made the livingroom the only means of draining it. I presented the builder, Dsn Ogbourn, with six problems I wanted fixed. He returned my document with a big X on it and the words “seller will not correct.” He included a revision if offer form, for my convenience.

  62. 62
    ananda says:

    I notice a real gloom bias to this site, where claims of “problems” are really highlighted with no critical skepticism. Similar to the 25-story apartment building story presented here, where is the skepticism of the claims? Don’t you think certain people have incentive to inflate the dollar amount of their “problems”?

    It’s like the slip and fall. My slip and fall should be awarded lots of money. I have an expert who says so.

    “Defects” exists everywhere. Trumping up the dollar amounts of damages is a game. Do you really think an “expert” would find no defects in the typical 1920 craftsmen if they went looking for problems. I can assure you that a long list of foundation, “structural”, electrical, plumbing, earthquake resistance problems could be generated with a large dollar amount associated. Where is the skepticism of the claims? Is the 25 story tower really that different from the others designed and constructed by the same people in the same era? Is this condo conversion really that different from others? What is the motivation of the those making the claims of big dollar amount problems?

  63. 63
    wreckingbull says:

    RE: ananda @ 62 – I don’t follow. Are you saying that the owners of the McGuire Apartments who kicked out all their residents had some sort of ulterior motive? Do you think they are going to make more money through a lawsuit than from 25 floors of perpetually paying tenants? Please enlighten us!

    BTW, its “Doom and Gloom” (c)

  64. 64

    I think liquidation is the most practical option here as no one is going to be able to do the best one which is to sue the developer, unless you can send over a bounty hunter?

  65. 65
    ananda says:

    RE: wreckingbull @ 63 – BIg claims are an integral part of the game that is played. It’s interesting to see Seattle Bubble trumpet plaintiff claims without much question, as if there is no more to the story. We’ll see who wins what, but I’d bet the 25-story apt building will not be torn down. I didn’t see any follow up on the Seattle Bubble, though I only occassionally read, of the other subsequent media stories where other experts dispute that the building must be torn down.

    Is it a fact that McGuire has 25 floors of perpetually paying tenants?

  66. 66
    Scotsman says:

    RE: ananda @ 64

    Do you have some contradictory facts to offer up, or are you just resisting the idea that builders rushed to complete a bunch of junk during the last decade? Do you live in a condo, and is it at risk?

  67. 67
    wreckingbull says:

    I didn’t see any follow up on the Seattle Bubble, though I only occassionally read, of the other subsequent media stories where other experts dispute that the building must be torn down.

    The only ‘experts’ I have heard say the building does not need to be torn down is the builder, McCarthy Building Companies. Hmm….. I wonder what their motivation is? Who else is claiming this?

  68. 68
    Brat says:

    Pulling aside the veil a bit..,. my husband is an architect and we are downsizing to Portland, a city we know well. We are kicking 70, vigoriously.

    After looking long and hard at the condo offerings there we chose to buy in an older building, so old it was built before condos were an option… it is a co-op. Construction defects are not a problem. Reserves are more than adequate to meet needs. The corporation has restrictions on the use of units, and enforces them. They require references in, evidently, an effort to prevent PITAs from becoming members. Pay cash for your shares, no pets. Yes, it is dated in some respects but so are we. Units come on the market, typically, when a stock holder leaves in a pine box or moves to a nursing home.

    I, and our future neighbors, have no problem with value. People don’t truely look at ‘value’ in a condo or co-op, they thing cheap. “Cheap” is not the same as “value”.

    Buyers need to find an anal retentive home inspector even in a condo.

  69. 69
    EconE says:

    RE: Scotsman @ 65

    I feel like a chump trying to do the best possible job restoring an Eichler (mid-century modern kit home) between 2001 and 2005. Then again, I’ve always said that if somethings worth doing, it’s worth doing right.

    Due to the fact that it wasn’t in a super-bubble state, my “sweat equity” was worth about a buck an hour.

  70. 70
    Scotsman says:

    RE: EconE @ 69

    A buck an hour isn’t bad if you’re enjoying the project- I’ve worked for less.

    I wasn’t familiar with the Eichler homes, but after a quick google I’m intrigued. They remind me of a Frank Loyd Wright home, some sort of kit or standardized design that they built for temporary display across the street from Bellevue Square 20 (?) years ago. I remember touring it and thinking “this is perfect.” It wasn’t that large, maybe 1400 square feet, but it was more than enough for a family and very, very well done. For some reason I think these guys were onto something that the Buchan, etc. MacMansions missed- a real sense of home and proportion.

  71. 71
    Scotsman says:

    RE: Brat @ 68

    When I first started working in downtown Seattle I looked at a couple of co-ops on Capitol hill. They were structured differently than the condos, much more conservative, and tended to be in older well established (proven?) buildings. They are kind of the non-commercialized condo, a decent alternative to an apartment at a lower cost than a condo. No frills. At certain points in life they could make a lot of sense. I wonder how common they are now, or if they too have been converted?

  72. 72
    EconE says:

    RE: Scotsman @ 70

    Yup. It was 1400sf of pure joy. I’d buy it back if I could…and at the 2005 price no less.

  73. 73
    One Eyed Man says:

    RE: EconE @ 72

    I have mixed emotions about Eichler homes. I was just an innocent kid from Seattle when I spent an amazing night in an Eichler in Sunnyvale CA in the mid 1970’s. I had been drinking at a party and was picked up by a cougar and taken home to her Eichler on a Friday night. She was a mid-century modern with an atrium entry and a wall of windows overlooking a beautiful pool in the back. It wasn’t until the next morning that I notice the ring and the wedding picture on the night stand. I felt so cheap and used. Lucky for me the back door was a slider and it couldn’t hit me on the way out.

  74. 74
    David Losh says:

    RE: Jane @ luxury condos @ 64

    Liquidation would require bank cooperation which will never happen. Banks have stalled the entire market correction.

    Yes there is a way to, en mass, buy out the entire building, convert it back to rentals, recoup some losses, with the current owners keeping a per centage of ownership. Will it happen, heck no. The individual lenders will foreclose, take some nickles and dimes, and invest in Chinese mining stocks.

  75. 75

    RE: Scotsman @ 71 – Coops are older building because I don’t think condo was probably an option when most coops started. I’m not 100% certain, but I don’t think the condo option existed in Washington before the early 60s.

    The main issue with coops is that financing is very limited. I think there may be only one company that does the loans. Because of that, prices tend to be lower. Also, I’m not sure all the consumer protections apply (e.g. resale certs and disclosure statements).

  76. 76
    wreckingbull says:

    RE: Brat @ 68 – I like the no pets clause. Look, I like dogs. The problem is, this whole Seattle dogs thing has gotten a little out of hand. Locking a Border Collie up in a 600 square foot condo all day? Are you kidding me? The condo I rented for 18 months a few years back felt (and smelled) more like a kennel than a condo.

  77. 77
    Scotsman says:

    RE: One Eyed Man @ 73

    “She was a mid-century modern with an atrium entry”

    The house, or the cougar?

  78. 78
    Scotsman says:

    RE: Kary L. Krismer @ 75

    Yup, being just a young’n with little to put down I couldn’t get financing. Seemed like a deal at the time though.

  79. 79
    EconE says:

    RE: One Eyed Man @ 73

    I’d take a cougar with an Eichler any day, however, I think the cougar would prefer someone younger. ;^)

    Speaking of “cougars”…and a bit off topic…how’s this for an address!

    http://www.trulia.com/property/3010321403-1-Crazy-Woman-Way-Boise-ID-83716

  80. 80
    Mark says:

    The price is right, but the interest rate seems a bit high!

  81. 81

    By Mark @ 80:

    The price is right, but the interest rate seems a bit high!

    As Scotsman asked: The house or the cougar?

  82. 82
    EconEq says:

    RE: Kary L. Krismer @ 81

    I’m pretty sure he’s talking about the property I linked to on “Crazy Woman Way”.

    Funniest name I’ve ever seen for a street.

  83. 83
    One Eyed Man says:

    RE: EconEq @ 82

    I was a little suprised that nobody lives on Crazy Woman Way. I figured there’d be a McMansion there for sure.

  84. 84

    RE: One Eyed Man @ 83

    I think that one does take the cake. It beats out Little Schmuck Rd in Evansville, Indiana:
    http://www.loopnet.com/Listing/14689328/2721-Little-Schmuck-Road-Evansville-IN/

  85. 85
    Brat says:

    Yes, buying a co-op is a cash transaction, When homes were, relatively, liquid that wasn’t a problem for down-sizing middle-aged middle-class couples. Make a contingent offer and you could pretty much count on having the cash in 60-90 days. There are some in the building who have homes elsewhere, there really is a segment of the population who thinks $400T is pocket change, but refuse to purchase a pig-in-the-poke (which is how I view unproven buildings).

    The ‘no pets’ rule is interesting. There are some residents who want to change that and frankly I wouldn’t have an issue. However, I suspect this rule came about during the first generation of owners. Were I to research the history of that rule odds are that it happened after a couple residents had problem pets and discord developed. The easy way to prevent that from happening in the future is to have a policy of no more pets. Now this is the perfect place for someone with allergies to pet dander.

  86. 86
    Seattlesun says:

    A friend of mine is in the same situation.
    What are the risks of walking away (or stopping to pay the mortgage, and just waiting for the bank to come get the unit)?
    It seems like the best way to avoid losing the most money. How badly does foreclosure impact one’s credit score? Can the bank come after you in WA state? Curious.

  87. 87

    RE: Seattlesun @ 86 – It’s very possible, if not likely, that the bank on this property would go judicially to foreclose, and thus be able to go after the purchaser.

  88. 88
    null says:

    I live at Riverwalk and although the HOA may not have voted to default I’m not sinking any more money into this bottomless pit. No, I am not in the KOMO 4 news report, but I think the homeowners put it perfectly.

    http://www.komonews.com/news/local/92729139.html

  89. 89
    null says:

    What do you know, this all traces back to the Lexas Companies (the people doing Escala in downtown).

    Eric S. Midby was a former manager of the Master Management LLC (one of the governing persons listed in the Nevada records) in my sale documents and he’s now working for the Lexas Companies along with Katie Schrenk who was a project assistant at Riverwalk.

    John H. Midby is one of the partner co-founders of the Lexas Companies… I wonder how Eric ended up working there. The Real Estate agent who worked for Windermere ONsite, Valerie Nix, has some family connection to the developer as well.

    All of you folks buying in at Escala.. caveat emptor!!

    Coincidence?

  90. 90

    RE: null @ 89 – I’d be very careful about making any such associations. On any significant project there are dozens of companies involved, but that doesn’t mean that they are all responsible for a problem once a problem develops.

  91. 91
    Null says:

    So what you’re saying is that the person who signed off from Master Management, LLC allowing Riverwalk at Redmond, LLC to sell the condo to me might have had no idea what was going on. This was clearly setup as a two LLC thing to protect the developer(s) for liability during the conversion. It make lawsuits more difficult and lets you dismantle and shift assets quickly. I know this, because my parents setup similar structure during the real estate boom to protect their flips and I went to lectures where lawyers taught you to setup poison pills and asset stripping mechanism that funnel all the money to a “safe” LLC.

    It’s really convenient how all the Riverwalk at Redmond, LLC personnel ended up at The Lexas Companies. Oh wait, let me look at the address for Riverwalk at Redmond, LLC used for mailing information… wow that’s odd it’s:

    601 Union Street
    Suite 4616
    Seattle, WA 98101

    That seems really familiar… oh wait that’s the current address for the Lexas Companies: http://www.lexascompanies.com/contact.php

    Still think its just a coincidence? I’m not saying Escala is the same, but consider the character and history of the people you’re dealing with when you are buying into Escala.

    All I’m saying is caveat emptor….

  92. 92
    One Eyed Man says:

    RE: Null @ 91

    “This was clearly setup as a two LLC thing to protect the developer(s) for liability during the conversion. It make lawsuits more difficult and lets you dismantle and shift assets quickly. I know this, because my parents setup similar structure during the real estate boom to protect their flips and I went to lectures where lawyers taught you to setup poison pills and asset stripping mechanism that funnel all the money to a “safe” LLC.”

    In the 1980’s I worked in an OC law firm that did that kind of stuff, except back then you used corporations and limited partnerships because LLC’s didn’t exist until about 1994. As you imply, it doesn’t necessarily mean their dirty, just protecting themselves from potential creditors. One of the partners in that firm used to call it playing “hide the wienie.”

    Did the name DANIEL F BYRON pop up in your search anywhere Null? His name came up as an officer for a couple of entities that Midby was involved in in NV. He is apparently a commercial broker associated with Midby in NV. The following link says he was President of The Midby Group and he got an Honorary Doctorate of Law from University Nevada-Reno so he might be a high roller with the bucks to make big donations.

  93. 93

    By Null @ 91:

    This was clearly setup as a two LLC thing to protect the developer(s) for liability during the conversion. It make lawsuits more difficult and lets you dismantle and shift assets quickly. .

    First, the shifting of assets won’t necessarily work. See the first sentence of my first post in this thread.

    Second, I’ll repeat what I said before. Just being associated with the project doesn’t mean you were the one responsible for causing the problem (as opposed to being legally responsible for paying for it). I’ll use the Toyota unintended acceleration issue. As I understand it, at one time they thought that the problem might have been acceleration pedals produced by one of two companies. Assuming that to be the case, that doesn’t mean that you’d have to worry about every Toyota ever built, but instead only certain models with a certain component. Toyota would be legally responsible, but would not be the entity responsible for causing the problem (as evidenced by the fact that another entity producing the same design component wasn’t having any issues).

  94. 94
    Null says:

    I see what you’re saying… just because somebody that the developer hired to do the repairs to building envelope screwed up doesn’t necessarily mean that it was the developer’s fault directly even if he maybe liable for it. As a result an involuntary bankruptcy maybe possible to try to get at the people who actually screwed up the envelope, but there’s a lot of murky legal issues around that approach, because the LLC is defunct and it would cost a lot of money to take that approach.

    It’s going to be interesting to see how this all plays out.

  95. 95

    RE: Null @ 94 – And possible get at a defunct developer even if they weren’t responsible for the cause, but were legally responsible.

  96. 96
    Scrawny Kayaker says:

    By matsayswhat @ 33:

    I don’t have to worry about $45,000 of repairs being needed on my house outside of a freak accident (fire, earthquake) that’d be covered by home insurance anyway!

    Be sure to check that your home insurance policy DOES cover earthquake. Not all do, which I find bizarre. Talk about an unexpected (well, the timing, not the probability) event that could seriously deconstruct your house! Who wouldn’t want to be covered for that?

    Our standard PEMCO policy did not. They don’t even sell a rider on their own policies, but rather a separate policy from GeoVera, which I bought. Hopefully, they’re an actual company! They tout a good rating from AM Best. Anyone know if that’s a real business, too?

  97. 97

    RE: Scrawny Kayaker @ 96 – Earthquake insurance is high risk insurance, and thus not covered under a standard policy. It’s such high risk that most insurance companies no longer want to write it, which is why Pemco and others use Geovera.

    I would be a bit more comfortable if there were more companies that wrote the insurance just in case there is a large loss at some point.

    BTW, many apartment buildings and condos are written under a group policy for buildings managed by the same management company. The idea is that it’s cheaper, but I really do question whether they would get the same coverage if there is a massive earthquake. The total loss of all the buildings could exceed the coverage.

  98. 98
    David Losh says:

    RE: Null @ 94

    It’s unfortunate that in my career there have been a couple of cases where I was intimately involved with this type of development by bad people.

    There should be laws against this shoddy development scheme, but unfortunately it is completely legal. Yes, there are those “very smart guys” who know how to manipulate the system, and they are sought after. Partners get hurt, the home owner pays the full price, and never stands a chance.

    It’s legal. It’s another example of why it’s important to have a Real Estate agent who knows what’s good, and what’s a trap. Let me say that many of these recent developments, and condo conversions, have been traps laid by LLCs. It’s a sad commentary on the way we do business, but it is just business, and nothing personal.

    In my opinion the consumer, the buyer, the owner of these units, should have the right to recourse against individuals. It’s completely unfair, and immoral, that these “really smart guys” can hide out in the open, but the law is on their side.

  99. 99
    One Eyed Man says:

    RE: Scrawny Kayaker @ 96

    I’ve looked for earthquake insurance too and GeoVera is the only one I found. Obviously, if they are the only game in town and they only do earthquake insurance, it would seem unlikely that they would be able to cover the losses from a massive quake. I’ve never looked at their financials to see what their total assets were. I suppose you could compare that number to some estimate of the total losses from a major quake times the percentage estimated to be insured to see how good the coverage would be if “the big one” hit.

  100. 100
    christine says:

    the inspectors should get sued. Everyone just wanted to make a buck quick at that time. The people who did the work , 3rd parties, and the inspectors should pay. You guys should Get Jesse on King 5! LOL

  101. 101
    Dane says:

    I have to say I do feel for all you people. You’re in a tough position. I myself have owned two condos that have been through litigation and I happen to be in the construction litigation repair business which is who will fix and repair your units. I also have been in the conversion business for many years. I have seen many situations like this and many worse.

    I am somewhat acquainted with this project through other vendors and professional services. I know that the developer hired a professional group whose business it is to investigate and provide a supportive report on the current status and repairs required on projects. They obviously did not do their job well or provided incomplete information. The Developer should be ticked off at them as well for not getting the proper information. All this does is make things tough later for them. If they was given the proper information and made all the repairs as needed (that your representation is claiming) then most of you would not have been able to afford your units. In addition, things were hopp’n fast, I am sure you all had inspectors performing inspections on your purchase. If not then you have no one to blame but yourself. Each one of you was provided a disclosure statement by law. This statement provides you with the information the Developer was provided plus a description of work was complete. This was again provided by the hired professional.

    I completely understand why you feel screwed but taking this out on the Developer only is a not doing any good. You are looking for someone to take the blame and pay for any repairs. If I were to look at the site (which I have colleagues who were apart of the investigation) many of the items called out would have to do with building and homeowner maintenance. Yes there will be some that maybe have been hidden or crappy subcontractor work. Again, the Developer hired an outside professional agency to provide third party investigations and details.

    I am sure you didn’t want to hear this but this is an honest but brutal response. You should be able to go after their insurance company but be prepared the people who will make the money will be; first the attorney’s, next will be the repair contractors. Each one of you will PAY for this work. NO matter what the attorney’s state. There will ALWAYS be extras and many of them, be prepared.

    Taking your anger out on the Developer whoever they are is not where you should be taking it. Look directly at the professional group that performed the investigations and reports for the developer. Even go as far as looking at their history as well as looking at the history of your attorney’s and repair companies. You very well may be surprised they are all in this together.

    Goodluck

  102. 102
    MacK says:

    Hold it! All of this is old information and no longer accurate. As a home inspector, I hammered this place a few times in the past. I looked at it again today and was pleasantly surprised – stunned actually. But the owners stepped up to the plate in 2014 and ate a $4,000,000 – yep – 4 mil – rehab. New cladding, decking and some deck framing. All new windows and sliding glass doors with proper flashing. Rain screen & drainage. Lower units got new gypsum wallboard on lower wall areas. The work was professionally done and overseen by an architect/engineering firm. The work is well documented and likely has some type of warranty. I have no dog in this fight and have no idea about value, but don’t blow this place off without a look.

  103. 103
    The Tim says:

    By MacK @ :

    Hold it! All of this is old information and no longer accurate.

    Well, um… yeah. The post is almost five years old at this point.

  104. 104

    Tim, shame on you for not updating pieces which are based on someone else’s reporting! ;-)

    It is good to hear that something was done. That was hardly the only complex that had “envelope” issues at that time. Back then I knew of 4 or 5 up in Snohomish County (referenced in post 2 above), and as far as I know all of those got resolved–at least one of them with an upgrade from vinyl siding.

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