The TCPalm news is reporting Morgan accuses Lennar of shoddy work.

A real estate broker Tuesday accused Lennar Homes of shoddy workmanship at three homes in the Martin’s Crossing subdivision on Kanner Highway, including roof and electrical problems he called potentially life-threatening.

Speaking during a Martin County Commission meeting, broker Mike Morgan said he is filing complaints against Lennar Homes with the state Department of Building and Professional Regulation, the Florida Attorney General and the Federal Trade Commission.

Inspections of the three houses on Fleming Way showed defective roofs with loose and broken tiles and incorrect installation that might not be able to withstand a hurricane, Morgan charged.

Morgan also argued the inspections found defective electrical work with voltage drops that could spark a fire.

In addition, Morgan charged that stucco installed on the houses was too thin and probably would lead to moisture behind the walls and ultimately mold.

“I’m here to ask, ‘How in the world did these homes pass county inspection?'” Morgan said.

Why get the news from TCPalm when you can get it straight from the horse’s mouth? From Mike Morgan at MorganFlorida.

NOTE: Although we are based in Florida, we are working with clients througouth the United States. This problem is NOT limited to Florida. It is a Nationwide problem.

Warning – We have now inspected several homes for our clients in Lennar communities. The inspection reports came back littered with defects and building code violations.

These defects include:

1 – Roofs improperly installed. Broken tiles, insufficient overlap, tiles not secure to the roof and improper nailing.
2 – Electrical wiring with unacceptable voltage drops. Drops of 5% can be a fire hazard. Our inspectors found drops more than double the 5%.
3 – Stucco that is too thin. This will lead to moisture “behind” the walls . . . and mold that will be very difficult to remove.
4 – Plumbing, appliances, air conditioner installation, windows, sealing, and dozens of other issues.

What To Do – If you own a Lennar home or have purchased and not closed on a Lennar home, call me immediately. Do not have any further communication with any Lennar representative. You will want to document everything in writing from this point forward.

What We Do – First, we will schedule a very detailed inspection. We only use a handful of super qualified inspectors. Most inspectors can only perform a very general inspection that does not reach the detailed levels of our inspections. Our inspection reports average 35 pages, and these inspectors look at things the average inspector is not even aware of.

Second, we will file Complaints with the County Officials, Department of Business and Professional Regulation, the Attorney General and the Federal Trade Commission.

Third, we will coordinate with a leading litigation firm.

For additional information or a sample Inspection Report, email me at

Oddly enough I was just talking with both Mike Morgan and Jack McCabe last week about construction problems and possible litigation. Things can get very intersting shortly.

Here are the latest numbers from Mike Morgan as of June 4th.

The Numbers – The first set of numbers are for the last 7 days. The second set of numbers are for the prior week. Sold represents a home that was under contract and has closed, while Pending sales are contracts written this week, but they don’t all close. Less than 85% of Pending listings will actually close.

  • New Listings – 465/541
  • Price Drops – 160/177
  • Sold – 61/67
  • Pending – 47/50
  • Listings to Pending Sales = 9.89/10.82
  • Listings to Closings (Sold) = 7.62/8.07
  • Open Houses – Very light traffic. We had less than a dozen people in two days.
  • Sales – Nothing sold this week.
  • Showings – A very slow week. Less than 25 showings on 45 listings.
  • Listings – We are not taking new listings without a $498 non-refundable administration fee unless the listing is priced 5% under the market.
  • Buyer Inquiries – Very slow week, and the inquires we did receive were from non-qualified buyers looking to buy a homes under $250,000.
  • Inventory – Still building, but the rate of the build-up is slowing. We are still running 500% ahead of last year.
  • Advertising – The deadline for the next issue of the Real Estate Book is in three weeks. If you want to feature your home in the next issue, the cost is $450 for a full page or $150 for a one third page. We only run full page ads with either 1, 2 or 3 homes per page, as compared to most agents that crowd in 9-12 tiny listings.
  • Rental Market – We turned down all requests from flippers that want to rent. The rental market is flooded with flippers trying to salvage something out of their investments. Unfortunately, there are far more vacant homes than renters.
  • Home Builders – The builders continue to slash prices and offer a variety of incentives.
  • Suggestions – Even selling agent bonuses are not doing the trick if the price is too high. Buyers want bargains, and seller are still hesitant to drop prices back to 2004 levels. That is what it will take to sell in this market.

Bull markets have a way of overlooking all sorts of problems. Bear markets are another matter indeed. I expect litigation costs for homebuilders to skyrocket (some of it justified, some of it not). Bear markets are also good at exposing all sorts of fraud. The last statement is not in reference to Lennar, but merely a statement of fact.

This decline is only the beginning. Those that think homebuilders or homes are generally a good buy here should probably think twice.

Mike Shedlock / Mish/