13 INVESTIGATES: New Home Construction - Alabamas13.com WVTM-TV Birmingham, AL

13 INVESTIGATES: New Home Construction

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Built in 2007, sold as brand new construction in 2009, that's what happened at this Pelham home, and this one too.

This realtor, we'll call Michael, who does not want to be identified, calls the way these homes were advertised in the multiple listing service or the MLS - fraud.

Realtor, Michael said, "When you misrepresent or alter data to sell it, then you're committing fraud to the consumer."

To be clear realtors add listings to the MLS, not MLS itself. In MLS listings provided to us from Michael, we found several homes with new construction dates, in some cases, one, two and three years later than when they were first built. We were able to verify when homes were built by checking building permits, inspection dates and certificate of occupancy dates. Some homes, we discovered, sat empty for years before they were sold. Michael calls it robo-dating - putting a newer date on the house, than when it was originally built.

Michael said, "It's false advertising and misleading to every consumer as well as to the agents that we're trying to sell, so we're at a liability risk, saying oh, let's look at this new house, do our research and find out it's not new."

Michael said he alerted those at the MLS about his concerns and gave us copies of emails he sent and the MLS response about what's called, ‘possible rules violations' for home listings.

After Michael submitted his concern, the response read,

"The house was more or less finished in 2007, but the basement was not finished until 2008. I am supposing that this is a new idea to market the house."

The email goes on to say...

"Due to the fact that new construction is sitting on the market for so long, that more leniency is being given as far as year built is concerned."

We took Michael's concerns to Dorothy Tayloe, an MLS director and Alicia Huey, President of the Greater Birmingham Association of Homebuilders. What's their definition of new construction?

Greater Birmingham Association of Homebuilders President, Alicia Huey said, "A home that has never been occupied is considered new construction."

MLS Director, Dorothy Tayloe said, "New construction has been determined to be something that has not been lived in."

So that means, homes built years ago, even if they've never been lived-in qualify for the new construction label in the MLS.

Linda asks Tayloe: "Is that legal, is that fraud, is that unethical?" Tayloe answers: "You know, I don't know, I don't think it's unethical."

Linda asks Huey: "Is it unethical to have a home sold as 2009, when it was really built in 2007, is it illegal?" Huey answers: "I don't think so, and I don't think it would be unethical if the home has never been occupied." Linda asks: "Then it is still new construction?" Huey answers: "The appliances have never been used, the faucets have never been used so the home is still new."

Tayloe said there has been what she called confusion in the past with this issue, so MLS updated its listing page to reflect that, adding she said, a descriptive category.

Tayloe said, "If you finish your house in 2013, and it doesn't get purchased until 2015, although I hope that doesn't happen these days, it should show, that the house was built in 2013, but it would be new, not lived in."

So what about the wear and tear on unused appliances sitting in unoccupied new homes for years? One appliance repairman told me, it can affect the livelihood of appliances specifically on hoses and other parts if they're not properly stored. They could deteriorate if they're not plugged and or sealed.

Both Huey and Tayloe advise using what they called a reputable realtor that will likely add extended warranties on appliances if buying a new home that has sat on the market for a few years.

Homebuyers also can get these unoccupied homes at steep discounts. In our research, some prices dropped 10 thousand-40 thousand dollars off original list prices.

Michael said even a steep discount price doesn't matter.

Michael said, "I don't care if you buy it for ten dollars or a hundred thousand dollars, it's fraud."

Neither Tayloe nor Huey see it that way.

Tayloe said, "If there is a problem with the year built description it would hopefully just be an oversight. I don't think there is, I would say, I don't think there is. There shouldn't be."

And while Tayloe told us there've been changes to MLS to avoid confusion of new construction, Michael insists, new construction still continues to be what he calls, robodated, given a newer date than it was originally built.

Michael said, "We've seen in the first week of January this year, it may have been a dozen homes built in 2013. Well, the first 30 days, all of sudden, there were 200 homes built in 2013 and then in 45 days, there some built, sold and closed in 45 days in 2013."

If you want to learn the age of the home you're buying or of your current home, you can research tax records, deeds and/or building permits. You can also have your realtor do that. You can also check dates on your furnace, pvc pipes, built-in microwave oven and plywood, although plywood may not be reliable. We interviewed Tayloe at this home under construction in Mountain Brook.

With an April 2013 building permit on the wall, it had two year old plywood.

Alabama is a caveat emptor state, in Latin that means "buyer beware".  Legally the homebuyer is purchasing their new home 'as is'. Some states are moving towards caveat venditor, meaning sellers have to disclose "known" defects. Alabama is not one of them.

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