Wednesday, August 24, 2005 | Editor's note: A Voice investigation uncovered complaints of construction defects and misrepresentations by developers in many downtown high-rise condos and apartments. This four-day series sheds light on the practices of developers and city inspectors, examines the risks buyers are taking and offers them advice.
Voice Special Report
This is part three in a four-part series. Read part one and part two.
The cover of the original brochure for Porto Siena, an attractive condo development in the heart of Little Italy, has a catchy slogan: "Dalla casa si riconosce il padrone," or "A home discovers its owner."
Some owners of units in the development think a more appropriate slogan might have been "Un patrone puo scoprire cose che non gli piaccione della sua casa," or "An owner may discover things he doesn't like very much about his home."
Porto Siena, built by Intracorp, is one of a number of downtown condo projects that residents say they bought into as a result of misrepresentation by developers. Residents at the complex told the Voice of San Diego that they were lied to about everything from spas to stairways.
The attorney for the Porto Siena homeowner's association says the group is close to litigation after exhausting all means of mediation with the builders of the project.
Despite repeated attempts to reach Intracorp officials over several days, no one from the company returned calls seeking comment on the residents' allegations.
However, in an earlier interview, Bill Nichol, an Intracorp spokesman, acknowledged there had been difficulties with the Porto Siena project. But he said Intracorp had been working with homeowners to rectify things.
Part four: Let the experts guide you through the process
Keith Fernandez, Intracorp's president and CEO, said he's willing to talk to any homeowners at any of his projects to listen to their concerns.
"Anybody who calls us, we try to interact with them as much as we can," he said. "We have a process set up to do that."
Attorneys say litigation arising from misrepresentation is nowhere near as commonplace as court cases over defective buildings, but they acknowledge it is a growth area, especially with the amount of downtown construction currently taking place.
Anthony Napoli, a resident of Porto Siena and president of the development's homeowners' association, said the building is very well-engineered and is generally a great place to live.
However, he said what has soured life at Porto Siena has been the behavior of the developers and how they have dealt with issues relating to defects and misrepresentation. He said homeowners at the development were promised a number of things that made their way onto the plans, but were never built.
"You look at the model," said Napoli, "and the model shows a spa. It shows a stairway going from one level to another. It shows lush flower boxes on the bottom units and all around, and you go, 'Beautiful! This is fantastic.' Then when you move in, they spend $2,000 at Home Depot and put Mexican pots all around, with some plants."
Nichol, the Intracorp spokesman, acknowledged that the spa was never built.
"We decided to leave out the Jacuzzi because of the maintenance costs for the homeowners association," he said. "But that was very early on, and we think that's to the benefit of the homeowners."
Paul Joelson, a forensic architect with Joelson Vail Associates and an expert on construction defect issues, said that while he has not yet seen many examples of misrepresentation disputes in downtown, the issue at Porto Siena is not an isolated incident. He described a recent case at an upscale La Jolla condo project.
"A lot of people were looking at the property via pretty brochures - nice full-color glossies - or they were going to a Web site, and they were shown a pool that was going to be located on the roof of the project," he said. "What happened is that when they ended construction, the pool wasn't there."
Joelson said most of the developers he has worked with don't play a "shell game" with their clients. He said problems with unscrupulous developers have been greatly reduced since the 1970s, when such practices were commonplace.
Construction defect attorneys and Realtors were quick to point out that buying condo units based on plans, brochures, models and Web sites is always a risky business.
Neal Rockwood, a partner with Rockwood and Noziska, cautioned that one of the reasons there's not much misrepresentation litigation out there is because it can be very hard for homeowners to prove that they have suffered any actual damage as a result of changes to the building's design. Noziska said buyers should take pains to define potential conflicts as soon as they arise during the planning process, in order to safeguard themselves later on.
Jon Epsten, an attorney that has worked on some of the biggest construction defect litigation cases in San Diego, said the key thing for buyers to do to protect themselves from misrepresentation is to read the fine print. He remembered a case where a developer had promised that condos would come with "stainless appliances."
"You know what was stainless?" said Epsten. "The front door panel. The developer said, 'I didn't say it would have stainless appliances throughout.' "
According to one homeowner, however, it's wise not to rely on what the developer promises at all.
Abe Wischnia, a resident of Porto Siena, said that he and his wife paid extra for top-notch appliances when they bought their condo. When the couple moved in, Wischnia said, the appliances were different than they had asked for.
Wischnia alleges that a representative of the developers told him they had been given an "upgrade." He said that didn't check out.
"My wife went to the G.E. Web site and compared the model numbers and they had given us a lower grade, not an upgrade," he said. "They had lied to us."
Wischnia said his experience with the appliances was just one of a list of misrepresentations made by Intracorp. Among others, he said, were bathrooms that were tiled without soap dishes, grease traps that were installed incorrectly, flooring that was not coated properly and has now stained and, of course, the lack of landscaping and the absence of a spa.
Intracorp officials did not respond specifically to Wischnia's allegations despite repeated requests by Voice to do so.
"In the construction process, we always do third-party review," said Nichol, the Intracorp spokesman. "Plans are reviewed in great detail by any number of experts, from the architects, to the structural engineers, to third parties that review their work, and then in actual construction. We try to do quality, first-class construction."
Wischnia put a deposit on his condo when the land it sits on was still a parking lot. The building has undoubtedly increased in value since he bought it, he said, but he stressed that not everyone who lives downtown buys property to make a quick profit.
"The builder's argument, when we put this into our demand in our mediation, was 'Gee, you guys haven't suffered, your units have increased in value,'" said Wischnia. "But what that ignores is that we live there. We have to live there, and we live there without things that were promised. Not everyone who buys a place buys it as a speculative flipper."
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Thursday, Part Four: Worried about buying downtown? Let the experts guide you through the process.