Home buyers cite broken promises
This series was prepared by the Globe Spotlight Team: Editor Walter V. Robinson, reporters Matt Carroll, Sacha Pfeiffer, and Michael Rezendes, and photographer John Tlumacki. This article was written by Robinson and Carroll.
Second of four parts, 4/30/01
Toll Brothers promises buyers of its luxury homes their dream house, and one that is well-built. But in New Jersey, one Toll buyer bought someone else's nightmare -- a home with so many problems that a court ordered Toll to buy it back from its first owner.
And Toll never told the second buyer it was selling him a lemon.
An aberration? Toll will not comment. But the Globe Spotlight Team found many instances in which home buyers were led to believe that they were getting more, and sometimes much more, than the home builder delivered after they paid for the homes.
Toll's questionable practices run the gamut.
One example: A Connecticut couple, Lynda and Larry Moses, were wrongly told her premium home site bordered an 878-acre park where she hoped to go horseback riding. Another: Home buyers in Virginia and Connecticut subdivisions were assured they were getting genuine stucco exteriors. Instead, Toll applied an inferior synthetic material that traps moisture in the walls.
Indeed, the company's questionable sales practices even extend to the size of rooms new home buyers are promised. In both Franklin and Bedford, Globe reporters found evidence that in at least a dozen homes, some rooms were significantly smaller than promised in Toll's sales brochures.
At Huckins Farm in Bedford, the company promised expansive kitchen areas totaling 376 square feet in one model. But the actual area is just 289 square feet -- 23 percent smaller.
In Franklin Chase, a Toll subdivision in Franklin, many homeowners opted for an expensive option, a multiwindowed "Elite Room" that a sales document said would measure 312 square feet. But official plans in municipal filing cabinets -- and measurements of several rooms taken by the Globe -- show that none of the rooms is bigger than 287 square feet.
Moreover, the Globe found that Toll has also provided misleading information to local building officials. In Holliston and Franklin, for example, its official plans called for 10-inch thick foundations, the industry standard. Instead, Toll sometimes used 8-inch foundations. In Sharon, it filed plans to use steel I-beams to support the structure in 200 homes. But Toll substituted less expensive wooden 2-by-10s fastened together.
Consumer protection laws, in Massachusetts and other states, bar the use of unfair or deceptive sales practices.
Asked about such issues, Toll said in a statement that it makes "every effort to make certain the information we give our customers is first-rate, fair, and accurate.
"While errors may occur on rare occasions, which we make every effort to correct, there simply is no pattern of deceptive sales or marketing practices at Toll Brothers," the statement concluded.
Yet on one issue, the company insisted that a product it misrepresented was never an issue in New England. Initially, the company's Boston spokesman, Joseph Baerlein, said several times that Toll had never used the troubled synthetic stucco product anywhere in New England. In fact, the Globe found it was used on homes in Connecticut and in Canton, Mass.
Some of Toll's sales tactics are more subtle than others. For instance, many Toll home buyers end up disillusioned when they contrast the puffery embroidered into the company's sales strategy with the homes they move into.
Consider the experience of Wyatt Andrews, a CBS News correspondent who bought one of the homes with the phony stucco in a Virginia subdivision from Toll. The company also advertises that high-end Andersen windows are a standard feature in all its houses.
Shortly after he moved in, Andrews said, the latches on two of his screens came off in his hand, latches he said that were not much thicker than aluminum foil. And the screen was so flimsy that he feared he could poke a finger through it.
Andrews was puzzled. Real Andersen screens, he said, "are so strong you can just about use them as a trampoline." So he asked Toll's project manager why his Andersen windows did not come with Andersen screens, and got this response: "You got Andersen windows. We never promised you Andersen screens."
Toll officials insisted that Andersen does not manufacture its own screens, and that Toll found a higher-quality screen from another manufacturer. But an Andersen spokeswoman said her company does indeed make its own screens, designed to fit Andersen windows. She expressed doubt that Toll could find a better substitute elsewhere.
It is at the job site, as the Globe reported yesterday, that Toll most often sacrifices quality. In Massachusetts, Toll has been plagued by a high turnover of project managers, poor oversight of subcontractors who often do sloppy work, the use of second-grade construction materials, a focus on completing homes quickly instead of well, and a habit of often disregarding warranty problems.
Quality aside, The Globe found that, all too often, Toll has alienated home buyers by making promises that it knew, or should have known, it could not keep.
Toll is not the only major home builder that has been accused of promising buyers too much. In New Jersey, for example, 15 home buyers have filed consumer fraud lawsuits accusing K. Hovnanian Enterprises of "bait and switch" tactics after they viewed a model home and placed orders that included upgrades and options like hardwood floors and Jacuzzi tubs that, it turned out, the builder later said it would not provide.
Courtenay Higgins, a spokeswoman for Hovnanian, characterized the allegations as "baseless afterthoughts," and said the company denies them. She also said that "not one" of the claims of deceptive sales practices in the lawsuits was made by a homeowner during closing proceedings.
George Dougherty, a New Jersey attorney whose firm represents the home buyers, said it is often difficult to tell whether deceptive practices are tolerated by home builders or are practices they cannot control. Often, he said, the problem varies within a large company. It depends, he said, on the ethics and competence of sales and construction supervisors.
But Toll sets itself apart from the others by building luxury homes that cost twice as much, on average, as homes built by other national builders. And it boasts that both its quality and customer satisfaction are high.
In the Bedford case, however, homeowner James O'Connor was not satisfied, especially when he discovered that he had been shortchanged twice, not just by the smaller size of his kitchen. Toll settled his claim, but with a confidentiality clause that prevents him from discussing the settlement.
But O'Connor's claim that Toll defrauded him was made in a 1999 complaint to the attorney general's office before Toll paid O'Connor an undisclosed sum, and is also detailed in town records.
In 1997, O'Connor contracted to buy a 3-bedroom attached home in the 162-unit Huckins Farm condominium development, where strict land conservation rules required that homes be built on just 55 acres of the 300-acre parcel.
The public records show that a blunder by Toll led to one of O'Connor's claims of misrepresentation. During construction of his cul-de-sac, Stearns Road, Toll incorrectly sited his unit and the one next door. Part of the foundation for his neighbor's unit was built within the conservation land. The town forced Toll to remove part of the foundation. That mistake left Manny and Joan Stoller with a shrunken sunporch.
O'Connor's foundation was built right on the line. Toll, according to his formal complaint, said nothing until just before closing, even though O'Connor paid $1,500 for a double door for a deck Toll assured him he could build. But the miscue erased any chance he had to build the deck.
But he apparently found the sales brochure more troubling.
"This brochure is intentionally misleading in a very material way. My kitchen is substantially smaller than that which was depicted in the brochure, and I charge that Toll Brothers knowingly misled me in the purchase of this home," O'Connor wrote to the attorney general. The company, he wrote, "had built a number of these homes, so they either cheated other consumers, or they only cheated me. I feel as though Toll Brothers' actions are nothing short of fraud."
The official plans filed with the town show that O'Connor was not the only purchaser to get a smaller kitchen. Seven others bought the same model.
One of the seven, Roy Einreinhofer, said he noticed the discrepancy when he bought the unit. But he did not file a complaint because, to him, it was typical of Toll's behavior. "If Toll could show anything in a better light than it actually was, they're going to show it that way. If it's to their advantage, they will make things look better than they actually are," Einreinhofer said.
The company's chairman, Robert I. Toll, said the Bedford kitchen embellishment was an unintended mistake. "... Missing 25 percent," he said, "that's not a misrepresentation. That's a foul-up."
Yet Toll Brothers also did some downsizing when it built its Franklin Chase subdivision in Franklin about a decade ago. Stanley J. Kozikowski, who has been battling Toll for 12 years over serious problems in his home, complained to the Globe that he believes his "Elite Room" is smaller than Toll advertised.
Kozikowski is correct. As was the case in Bedford, engineering plans Toll filed with the town -- plans that few homeowners ever see -- have room dimensions smaller than the square footage promised in sales material. The Globe measured the optional rooms at four of the homes: they match the official plans in size, not the larger dimensions in the sales brochure.
Toll would not provide the newspaper an explanation for the discrepancy.
Mark Burns, who bought the Elite Room option, almost got a room that was smaller and darker than advertised. When his home was under construction, he caught workers framing the room without two of its windows. Burns objected, only to be told there was no provision for the two windows. He said he had to produce Toll's own drawings before the windows were installed.
Several Franklin homeowners also said Toll promised larger water heaters for homes with Jacuzzis, but installed a standard size. The result: insufficient hot water to fill the tub. A chorus of complaints forced Toll to replace the smaller water heaters.
"It's hard to know if they did this stuff to try to get away with it or whether these were honest mistakes," said Burns, who now lives in Virginia. "But when you have so many things like that happen, they are not honest mistakes. They're trying to get away with doing it cheaper."
In Connecticut, where Toll built an equestrian-themed community in Newtown, Larry and Lynda Moses learned six months after moving into their $515,000 home that their lot, which Toll Brothers had told them borders an 878-acre state park, actually borders private property. The discovery dashed their hopes of having unrestricted access to miles of public riding trails.
The Moseses have filed a complaint with the state's Department of Consumer Protection, charging that Toll misrepresented the property line.
"There's a buffer zone between our property and the park that someone conveniently forgot about," said Lynda Moses, who believes the loss of memory -- by Toll -- was no accident. "I really feel I was swindled."
Toll Brothers acknowledged that the couple's lot does not border the park. But it blamed the mistake on a surveyor's error made by the previous owner of the land.
In New Jersey, Toll has been embroiled in separate lawsuits from two home buyers charging misrepresentation, and both involve the same home in West Windsor.
The original owner, Gary Jodha, was assured when he contracted to have Toll build his home that an adjacent area would remain open space, even though Toll officials knew the state planned to build a four-lane highway on the land. He won a consumer fraud case on that issue.
But that was the least of Jodha's problems: His home had structural flaws so serious that Toll was ordered by a court to buy the house back from him. And the jury that heard his lawsuit also found that Toll deliberately failed to tell him about the highway.
In an interview, Jodha said his expert witness, an architect, testified at the trial that the design of the house was badly flawed, and that it could not be adequately repaired.
Despite that evidence, Toll made the repairs. Then in 1996, using the same real estate brokers, Toll sold it to Sadeq Razvi. Razvi's pending consumer fraud lawsuit against Toll, Re-Max Realty, and two of its agents seeks treble damages allowed under New Jersey's consumer protection statute. The suit charges that the home is structurally flawed, and that Razvi was never told "of the tortured history of the property."
Toll has denied the allegation by Razvi.
Many Toll home buyers with complaints, the Globe found, simply give up when Toll ignores them. But a few, like Louis Matirko, are relentless.
In 1993, Matirko bought a Chester, N.J., home site from Toll after being assured, he claimed in a subsequent lawsuit, that he could later add a great room, patio, and swimming pool. The suit charged that soon after he agreed to buy but before he closed the deal, Toll discovered that new environmental regulations would prevent Matirko from doing the added construction.
But the company left Matirko in the dark, according to his suit, and he only discovered the problem after moving in.
First, Matirko sued the state. Three and a half years later, he won a ruling grandfathering his property under the old regulations. Then came the lawsuit against Toll.
Toll denied the charges. But late last week, Matirko and Toll settled the case out of court for an undisclosed sum, according to Dougherty, who is Matirko's attorney.
Citing the lawsuits, Toll declined to comment on the New Jersey claims.
Toll's agreement to make good on the synthetic stucco problem in Virginia may have created an added problem for one buyer, CBS newsman Andrews.
Andrews said he could not discuss the faux stucco case because of a confidentiality agreement. But neighbors said Andrews originally asked Toll's sales agent for an assurance that Toll's description of his home as having a "full stucco" exterior meant that all four sides of the house were included. Yes, he was told.
But in the world of Toll marketing, "full stucco" only means three sides. Caught in the contradiction, Toll gave Andrews a four-sided faux stucco home -- and, as it turned out, a faulty exterior all around.
This story ran on page A1 of the Boston Globe on 4/30/2001.