The Palm Beach Post is reporting Homebuilder targets realtor over Web site.
A national home builder sued a Stuart real estate agent on Friday claiming his Internet crusade against the company’s homes had trampled on its trademark.
But the real estate agent vowed his campaign to expose what he says is shoddy building by the company will not go away. The Miami-based Lennar Corp. filed the lawsuit against Mike Morgan in circuit court in Stuart on Friday afternoon.
The lawsuit alleges that a new Web site Morgan created, www.defectivehomes.info, is causing “infringement, confusion and dilution” of Lennar’s trademarked name.
Morgan, who runs the Morgan Florida real estate firm, created the Web site on Monday to gather complaints from residents who have bought Lennar homes.
Following are highlights from www.defectivehomes.info:
NOTE: Although we are initially concentrating on Florida, we are gathering information about home building issues Nationwide and we will be coordinating our efforts with Homeowners for Better Building. Please read the information below and contact us. It’s about time we took a united stand against the home builders delivering substandard homes.
We have conducted several very detailed home inspections Martin and St. Lucie Counties within new home communities, built by several national builders. The results of these reports indicate there are a variety of issues with roof installation, roof leaks, stucco thickness, mold issues and electrical problems, to name a few. After speaking with many homeowners, it is clear there is a problem that is not being addressed properly.
We are forming a Florida Coalition of concerned homeowners to address these issuesbefore the Governor, Attorney General, Insurance Commissioner, Department of Business and Professional Regulation, Insurance Companies and the Federal Trade Commission.
In a more recent version of the story, the Sun-Sentinel reported on June 12th Real estate agent tangles with home builder Lennar over allegedly inferior construction.
A Martin County real estate agent is taking on home building titan Lennar Corp. of Miami in a dispute that’s getting uglier by the day.
Mike Morgan of Stuart alleges inferior construction in Lennar’s Martin’s Crossing development. Morgan said a client hired a home inspector shortly before he was to close on a Lennar home, and the inspector found an improperly installed roof and other problems, Morgan said.
Other Lennar homes in the project had similar shortcomings, he said. “This is all visible stuff that any inspector could see.”
Morgan brought his complaints before the Martin County Commission last week.
Morgan said he has not inspected any Lennar homes in Palm Beach or Broward counties. He set up a Web site, http://www.defectivehomes.us., last week and said Lennar buyers from across the country have contacted him.
Lennar’s general counsel, Mark Sustana, has a different take on the matter.
Sustana said the company will fix any problems, but independent inspections show nothing wrong with Lennar’s homes in Martin’s Crossing.
“We delivered 43,000 homes [nationwide] last year,” Sustana said. “We do occasionally have a customer who is not satisfied. We make every effort to correct every customer problem.”
Morgan has a personal agenda, Sustana said.
Morgan insists that he is not motivated by money, saying he walked away from nearly $1 million in commissions for bringing the construction problems to light.
“I’m like Ralph Nader,” he said.
“Please understand,” Sustana wrote in a letter to Morgan last week, “Lennar will not allow you to damage our relationship with our home buyers or our business reputation with unfounded allegations of fraud and construction defects as you pursue what appears to us to be an attempt to extort from Lennar compensation to which you are not entitled.”
Mike Morgan fired off this email response to me on June 12th.
Everything that follows is a direct quote.
“Many of you have asked for an update on what is going on with me and Lennar. Here’s the story. We inspected four homes that my clients were set to close on with Lennar. The inspection reports came back littered with defects and code violation. We’re talking about defective roofs, defective stucco, defective electrical and more. We’re talking about building code violations. Lennar insists the homes are fine. Well, if they were fine, they would not have ripped the roof off the first home and replaced it. The second roof is defective . . . and they did the work without a building permit!
Lennar is telling the media that I am in this for the money. Funny. Very funny, because I have walked away from almost a million dollars in commissions. If I had kept my mouth shut, I would have pocketed the commissions and no one would have known the extent of these problems.
Then there’s Whitemarsh Reserve. This is a 186 unit town home project Lennar has been selling. I sold 30 units. But then I found out they lied about the project. They told us there would be a board walk back to the river. They told us there would be nothing built to the North of the development. Well, there is a County Park to be built there. And that is where the boardwalk is being built. So they fraudulently induced the 125 buyers, and the County made them offer everyone their money back. That’s 125 sales they lost overnight for fraud. Lennar is telling the media I am in this for the money. Once again, if I had kept my mouth shut, I would have pocketed hundreds of thousands of dollars in commissions. The only one in this for the money, is Lennar.
I received a phone call today from the Building Official for Martin County. It was a great call, and the County is on this. They are going to meet with Lennar and make sure all of the homes are fixed. If Lennar cannot fix these homes, they will have to buy them back or pay damages.
As for the lawsuit Lennar filed against me last week. I have not seen it yet, but I have been told it is for libel and slander. Lennar claims I have damaged their reputation with false information. I’m here to tell you that Lennar can’t win this one. We have 30+ page inspection reports littered with defects and code violations. All they have done with the lawsuit is escalated the mess they are in to a higher and much more public level. Talk about digging your own hole. Right now Lennar is no longer using a shove to dig their hole. They are using hand grenades and backhoes.
I will be drafting Complaints to the Governor, Insurance Commissioner and Insurance Executives. I certainly don’t have the resources to force Lennar to comply with our building codes, but the insurance industry does. Because it will be the insurance industry that will have to pay claims for defective roofs when the first hurricane blows through. If anyone knows anything about Florida, we have hurricanes, and most of the home insurers have pulled out of the State. Our largest home insurer now is Citizens Insurance, which is run by the State. It should be interesting to see Governor Bush’s response to what we have documented.
We will be taking this campaign nationally during the next few months.
It will be interesting to see what happens from here on out.
In other news today the South Florida Business Journal is reporting New orders down 50 percent at WCI.
The buying trend is sharply down for both singly-family homes and condominiums at WCI Communities.
The Bonita Springs-based company also cautions that its second quarter earnings will come in below its May 9 estimate of 75 cents to 85 cents a share.
WCI cites a “softness in market demand”, “slower traffic,” and a cutback in new product offerings. It plans to release just three to five condo towers this year, as opposed to initial plans to release 11 to 13 towers.
New orders for single-family/townhomes are down 42 percent compared to the previous year and high-rise condominium contracts have plummeted 84 percent for the first two months of the second quarter. On a combined basis, orders are down an average of 50 percent from 2005, although WCI expects it will be down “at least” 20 percent for the full year.
Gee, WCI could barely last a month before another downgrade. They downgraded on May 9th, and now they are downgrading again. Dow Jones had this take on WCI Stock Buybacks.
Separately on Monday, WCI said it repurchased 2 million shares at an average price of $21.79 during the second quarter. The company has bought back 3 million shares in the year to date, and the 2 million shares would exhaust its current repurchase authorization.
Corporate insiders have been dumping their shares while wasting investor’s money attempting to support the price. It seems they have run into a temporary brick wall but no doubt they will authorize more buybacks and waste more money yet.
Mike Shedlock / Mish/