Cover Story: Living the American nightmare

The American Dream for Steve Kirkpatrick is the same as it is for most folks. You work hard, save money, start a family, and build a dream house. Kirkpatrick was almost there in 1997.

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?His job selling photographic and imaging equipment was a good one; his nest egg was big enough to build the home he and his wife Deborah always wanted.

The three-bedroom house they bought 15 years ago outside Stone Mountain was too small for them and their four kids. A family of six needs a lot of space.

“We definitely had to get something bigger,” he says. “We figured if we’re going to spend $200,000 to $300,000 for a house, let’s build one how we want it.”

And by God the house was going to be built the way they wanted. They asked their architect to revise his plans at least 12 times. Nothing wrong with that. After all, it was going to be their house.

“We had it down to: If we put the couch here, then you’d walk into the room here, and the door would have to swing this way,” he says. “I can’t impress upon you how much thought went into it. We wanted to get rid of all the surprises and frustrations that come with a house.” They made sure doors didn’t swing open to block light switches and that light switches were right next to entrance doors, not on the other side of the room.

Now, that home belongs to somebody else. And the Kirkpatricks are out $100,000 for having faith in a busted homebuilding company and a system that lets builders get away with cutting corners on American dreams.

Construction drives Atlanta’s economy. Census officials say 360 people moved to the metro region every day during the 1990s. And Atlanta’s mind-boggling growth created an explosion of new homes. During the last decade, a staggering 371,851 single-family houses were built in the metro area.

Those houses usually sprouted within sprawling subdivisions and golf course communities, where two- and three-story homes with stamp-sized front yards sell for anywhere between $100,000 and $5 million.

For two reasons, the Kirkpatricks fell in love with Stonegate in south Forsyth County: It was close to both sets of grandparents and, unlike most subdivisions, the company developing Stonegate allowed future residents to build from their own plans.

The developers even installed an office trailer for future homeowners to meet homebuilders. There, the Kirkpatricks showed their blueprints to three or four builders before they decided to hire Anosh Ishak, the project manager for Ovel Development Co.

Kirkpatrick recalls favoring Ishak because he was so accommodating: “For just about everything, he said, ‘Oh that won’t be a problem,’ ‘We can take care of that.’ Obviously, though, we picked the wrong one.”

On May 10, 1997, the Kirkpatricks signed a contract and paid Ishak $32,500 to have the home completed by Oct. 24, 1997. The contract was amended on Oct. 22, and the completion date was extended to March 15, 1998.

After some minor complications, crews finally broke ground in November. In December, Kirkpatrick made the 40-minute drive from Stone Mountain to see the first physical proof that his dream home was taking shape: the molding for the foundation of the house.

He walked through the area where the front door was to be, looked over his family’s future living room, saw where the couches would sit, where the TV would go, where the fireplace would ... he stopped. Where’s the space for the fireplace? It’s not where it’s supposed to be.

So there were more delays. To fix the problem, crews had to return and rebuild the area where the slab for the fireplace would go.

A couple of weeks later Kirkpatrick noticed there wasn’t enough gravel on the ground where the basement’s concrete floor was about to be poured. He says that could have led to water leaks and flooding had it gone uncorrected.

Kirkpatrick says Ishak wasn’t as eager to fix the basement floor as he’d been to correct the foundation mistakes. It took a letter-writing skirmish for Kirkpatrick to convince Ishak and Ovel vice president Ron Leventhal to add more gravel.

Kirkpatrick says he noticed more problems shortly after contractors added the gravel and poured the basement floor: The home’s framing was off; window frames were the wrong size; doorways were misshapen. He says he spotted code violations, including the absence of foundation for a load-bearing wall in the basement that would support the two stories above it. He says he pointed out every problem he saw to Ishak.

By now, though, there was so much bad blood between Kirkpatrick and Ishak that even the slightest disagreement produced a flurry of letter writing, faxes and Leventhal’s intervention. Kirkpatrick says Ishak refused to follow the architect’s plans or correct the errors.

Ishak has a very different recollection of the relationship between builder and client, but he refuses to discuss specifics. He says he remembers Kirkpatrick as a “nightmare” to work with and says there is “no validity” to what the former customer alleges. Any other comments would have to come from someone at Ovel, Ishak says. He no longer works there.

The company’s president, Itamar Kleinberger, refers us, in turn, back to Ishak, noting that Ovel Development no longer is a functioning company.

“Anosh Ishak was the project manager. He was in charge of everything,” Kleinberger says. “There was a lot of back and forth. I personally lost hundreds of thousands of dollars [in Ovel Development].”

As 1988 rolled around, however, Kirkpatrick could look past the disagreements to envision his dream becoming a reality. The hammers were banging and the saws were buzzing as the crews worked on the house’s frame and roof.

Then, another kind of reality grabbed Kirkpatrick’s dream away from him. In mid-January he went to Plymart, a building supply company in Norcross, to pick out windows for the house. He was set to pay another $2,000 to get a better brand, but a manager there told Kirkpatrick he wouldn’t deliver the windows until Ishak paid Ovel’s credit account, which was in the thousands of dollars.

Kirkpatrick wondered if Ovel owed money to other suppliers. Digging around in the Forsyth County courthouse, he found that Leeds Building Products and Lanier Contractors Supply had filed liens against Ovel earlier that month. The liens claim that Ishak failed to pay for the supplies he ordered. A liens is a legal claim to property that must be settled before that property is sold.

He was appalled to find that Foundation Concepts Inc. had filed a $6,421.51 lien against his own house. Ishak allegedly never paid for the foundation the company poured.

Leeds Building Supply, Lanier Contractors and another company, Pace Drywall, later filed lawsuits against Ovel to recoup money they alleged Ovel owed them.

“If you take something from Kmart without paying for it, you’re arrested because it’s against the law, a criminal act,” Kirkpatrick says. “But if Kmart delivers something to your house and you don’t pay for it, nothing happens because then it’s a contract dispute. You have to take it to court as a civil matter.”

Kirkpatrick found more liens against homes Ovel built, dating back to 1997, all filed by companies alleging that Ovel failed to pay them for their work or supplies.

Smiling, yet visibly upset, Kirkpatrick asks, “How is it that this guy can leave such a long and detailed paper trail that goes back for years, and the county is still letting him build?”

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Good question. The answer begins with one simple fact: Georgia’s builders aren’t really required to follow building regulations.

Just like in the good old days, anybody in Georgia can print a business card and call himself a “homebuilder.” There is no real regulation or certification of metro Atlanta’s No. 1 industry.

But, unlike in the good old days, one thing you don’t need now to call yourself a builder is a hammer. That’s because homebuilding has evolved over the last quarter century into an assembly-line industry. Builders don’t build; they hire.

A new system has emerged in which skilled craftsmen have been replaced by a multitude of subcontracting crews. Some fit pipes. Others drive nails. Some roof. Some wire. Others pour concrete, and still others lay bricks.

They work for large companies, small companies or as ad hoc crews just assembled for the job of the moment. Some make lots of money. Many are unskilled. Some are longtime Atlanta natives, others are recent transplants, most are Latino immigrants who will work for $6 to $8 an hour.

The assembly-line approach works to mass produce things like shoes, blenders and cars. And for builders, the system is extremely efficient. But some construction industry experts say it may not be the best way system for constructing houses meant to last generations.

“A Sheetrock person isn’t concerned whether the walls are straight. He’s gonna nail the Sheetrock up anyway. A painter isn’t concerned if Sheetrock is up wrong. He’s there to paint,” says Dean Rolin, an independent home inspector and past president of the Georgia Home Inspectors Association. “The biggest problem in construction is we have these specialized people, and there’s no one to hold them accountable except for the builder, and he’s too busy.”

So if builders can’t watch over their crews, there must be someone else who watches over the builders, right? There is some final authority that can say whether a house is going to fall in or not, right?

In theory, that role would belong to county inspectors, who visit construction sites to make sure new homes are built to code, a uniform standard that dictates anything from how many support beams are needed for a specific type of roof to how thick concrete foundations must be.

County inspectors exist to make sure homebuilders erect a house without major flaws. That’s the theory anyway.

The practice: “Government inspectors are so overwhelmed they don’t have time to look at [houses] like they need to,” says Bobby McCurdy, who was in charge of Forsyth County’s inspection division for nine years.

“The last two years I was with Forsyth, my guys worked 20 to 25 houses a day. That’s too many, but you got to try to keep up with the workload,” McCurdy says. “When you have maybe 20 minutes to look at one, you’re not going to catch everything. Some builders know that. Bad ones will try to cut corners everywhere they can.”

Then there are the builders who simply don’t know the codes.

Most states have licensing or certification programs that require builders to learn the ins and outs of building codes. And builders have to pass tests to prove they know the codes before they get their license to build. Without a license, they can’t get a building permit.

In those states, if a builder gets busted for serious code violations, or if consumer complaints pile up against that builder, the state can revoke his license and effectively shut him down.

Not in Georgia.

“There are no requirements for builders to know anything in this state,” says Dan Peace, president of the Georgia Home Inspectors Association. “Three of the trades who work on houses have to be licensed — heating, plumbers and electricians. The people who build the foundation, framing and roof are under no obligation to know anything about the building codes that cover their trade. If you want to be a builder, you go down to Kinko’s and have your cards printed, that’s it.”

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Tired of finding mistakes, sick of deviations from the plan he and his wife had so carefully worked out, and now fearing that Ovel would go bankrupt before Ishak put a roof on his house, Kirkpatrick called the Forsyth County building inspection office. They hoped someone there could force Ishak to fix his goofs and finish the house.

Kirkpatrick admits he called the Forsyth County Building Inspector’s office so many times it constituted badgering, but at least it worked. The inspector who visited the site found so many things wrong with the house he issued a stop-work notice and ordered Ishak to fix the problems before he continued with construction.

Finally, Kirkpatrick thought, someone is going to force Ishak to correct his mistakes. Instead, construction came to a halt and never really resumed.

“That was when everything just disintegrated into one big mess,” Kirkpatrick says. “We never could seem to make any progress.”

Leventhal, who no longer works for Ovel and is engaged in his own lawsuit against Ishak, says there were “disputes [between Kirkpatrick and Ishak] on everything.”

In March 1998, Kirkpatrick hired attorney Vaughn Fisher to coax Ovel into finishing the house. Ishak did make some progress. But the framing and roofing, jobs that can take less than a month to finish, still were incomplete.

Kirkpatrick called McCurdy, the former head of the Forsyth inspector’s office, to document all the house’s problems. McCurdy toured the house with a camcorder Sept. 15, about a year after groundbreaking, and recorded 18 alleged code violations and construction errors.

Among them, “the bottom plates of the house are not anchored to the slab. ... The chimney located on the rear of the house missed the footing, leaving a section of the wall completely unsupported. ... The stair landings are not properly supported. ... The main floor has a laminated beam that is not properly supported. ... The roof is not supported every four feet per code. ...”

Rain caused some of the problems McCurdy found because the roof and siding were still incomplete. The furnace and air ducts were filled with rusty water. The electrical panel was exposed to water. Particleboard walls on the outside of the house were swollen from exposure. The front porch roof was falling apart.

Kirkpatrick sent the videotape to county inspectors, who said they couldn’t do anything until Ishak requested another inspection. He never did.

In December, Kirkpatrick filed a theft by deception police report with the Forsyth County Sheriff’s office. It says, “After approximately 18 months, the builder hasn’t even completed framing the house. The builder will not follow the house plans and lied to county officials ...”

The deputy who wrote up Kirkpatrick’s complaint called him back a week later and said the department wouldn’t investigate his claim. “They said it boiled down to a contractual dispute, and they only had so many resources,” Kirkpatrick says. “It was just not a high priority thing for them.”

“At that point, our life was miserable. We had all of our belongings in storage. Our family had split up in different directions since we didn’t have our own home. The stress was just unbelievable. We wanted closure, someplace we could call home.”

He’d been working with Ishak and Leventhal for almost two years now, and his home, his dream, was still in shambles.

Months dragged on. The house was an unfinished eyesore, the skeleton of a dying dream. Kirkpatrick finally reached the point where he could see no other resolution except to take Ishak and Ovel to court.

On Oct. 15, 1999, two years and five months after he signed the contract and paid Ishak $32,500 to build his house, Kirkpatrick filed a lawsuit in the Cobb County Superior Court against Ishak and Ovel Development Co. He wanted his money back and asked for a minimum of $500,000 for the emotional toll the two years of turmoil had caused.

Ovel Development filed for bankruptcy within a week. The company’s assets were immediately frozen, effectively rendering the lawsuit useless.

In December 1999, Kirkpatrick was fired from Photo Systems Inc., mainly, he says, because of the time he devoted to the house ordeal.

“This event was so totally consuming that it impacted every facet of our lives,” he says.

Eventually, banks, financers, building supply companies and subcontractors picked over all of Ovel’s assets, leaving Kirkpatrick with nothing.

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When he was a state representative, in 1997, Vernon Jones — who is now CEO of DeKalb County — introduced legislation that would have required homebuilders and contractors to go through a certification program to become licensed. The bill died a quick death. Two of the most politically influential groups in the state, the Homebuilders Association of Georgia and the Greater Atlanta Homebuilders Association, lobbied against it.

They opposed his bill, Jones says, because it would have restricted an industry that has always enjoyed a free-for-all in Georgia.

“One fellow representative actually told me that he was not going to let me stop the economy,” Jones says.

The Georgia Homebuilders Association has had a change of heart since 1997. President Mark Fitzgerald says that if another lawmaker sought to regulate the homebuilding industry, his association would neither fight it nor support it.

Fitzgerald likes to point out that the GHA has its own, voluntary certification program. If they want to, builders can go through a state code course and advertise that they’re GHA certified builders.

Builders can be stripped of their certification by the GHA if the organization receives multiple or serious complaints about that builder. Know how many builders have lost their GHA certification? Zero.

“Sometimes, many times, it’s a matter of communication, between the so-called bad builder and the buyer,” Fitzgerald says. “I’m not defending anyone, but there are code violations and there are code violations. Some codes are easily followed. Others, we have to interpret what they mean.”

A rising chorus of displeasure with Georgia’s unregulated homebuilding industry can be viewed in Internet chatrooms (on Yahoo’s site and on homebuyer.com’s “Buying Blues” Web page). Homebuyers also have filed 652 complaints with the Governor’s Office of Consumer Affairs against new homebuilders since 1998. And 211 complaints against homebuilders were filed with the Metro Atlanta Better Business Bureau in the same period.

In the halls of the Capitol, however, the most ardent critics are well aware that well-heeled lobbyists will overpower their cries for reform.

Bob Miles went through five years of legal wrangling after a series of diputes with the builder of his Decatur home. Eventually, he contacted Jones, who was then his state representative, and agitated for legislation.

But, now, he holds out little hope for reform.

“The quality of the material and workmanship is of no concern to state legislators. And [county] commissioners see us as a revenue pool to collect taxes,” Miles says, referring to homeowner and property taxes.

Jones’ licensing bill “died in committee, which tells Joe Citizen that the building lobby is more powerful than the constituents in Georgia, particularly in metro Atlanta,” Miles says. “The builders got friends in the Legislature, and that’s the bottom line.”

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Sitting in bankruptcy court on a hard wooden bench in the Richard B. Russell Federal Building downtown, Kirkpatrick watched the judge remove his house from the proceedings so SouthTrust bank, which advanced Ishak between $125,000 and $155,000, could foreclose on it and resell it.

“All this has taught me a hard lesson. You can sign a contract with someone to build a beautiful three-story, four-bedroom home, and he can build a one-room log cabin and there’s nothing you can do about it. All that contract means is you have a piece of paper you can go to court and sue over. And then their lawyers nickel and dime you to death until you can’t afford to fight anymore.”

And that’s where Kirkpatrick is today.

He re-filed a suit, this time against Ishak personally, and it’s slowly making its way through Cobb County Superior Court. Including architect’s fees, the money he gave Ishak, and legal fees, he figures he’s out close to $100,000.

At one point he offered to buy the house from the bank, but he says, “Our offer was lower than other offers because we knew of the defects in the house and what it would cost to correct it. We’re not going to pay $300,000 for a house that costs $200,000.”

Someone else did though, and Kirkpatrick paid him a visit to warn him about the many construction problems lurking inside.

“He was mostly nice, cordial, but he made it clear that it was his house now,” Kirkpatrick says. “I know he did everything right, he’s free and clear in the eyes of the law, and he got the house legit, but ... I had so much money and so much of my life into that house, and it was just ripped away from me.”??