Ohhhh What to DO?

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As my loyal readers know, I have had a construction defect law suit against the builder of my home. Last August I reached a settlement and in December I received the cash...to fix my home. I have signed a contract to make repairs to the home which would alleviate the cause of the probelm (the house is built on expansive soil). The fix is to build a cutoff wall or better said a 5 foot deep FOOTING around the perimeter of the home, provide drainage from the back to front, install rain gutters and regrade the lot to provide better fall off from the house... After this iall this work is done I will have a sizable chunk of change left in my pocket to assuge the pain of having to go through such an ardous ordeal ....

Now here is the kicker..My Accountant has informed me that the remainder of the money is TAXABLE. No great shock here folks....I have my choich though....If after the home is fixed and I sell it THIS YEAR...the remaindr will be taxed at the capital gains rate of 15%...if I don't sell the home this year...I will have to pay 25% at the ordinary income tax rate... This is all besides the 250K exclusion I get for living in a home for 2 years...I have maxed out my gain allready.. even after paying out closing costs.

Also thrown in the mix is that in a RISING interest rate envirnoment ....I can be assured that interest rates will be higher next year....thus making a home mortgage more expensive...

However the cash difference between 15% and 25% tax rate can mostly be eaten up with the cost of moving and various closing cost expenses...however those costs will be incured whenever I decide to move...

One other factor to gauge and I don't have a firm opinion yet...My neighborhood has numerous homes that are experincing expansive soil difficulties...I would say at least 50 houses out of the 172...none of them have been repaired to TRULY ALLEVIATE the problem the Builder continues to apply band aid fixes as his solution and people patch and sell without disclosing...There were 10 homes that were bought back under a Class Action Lawsuit by the Builder fixed and resold...2 of them I know for certain are reexperiencing problems...There is also the growing possibilty that another larger Class Action lawsuit is in the making...The problem for me is the smell from these continuing problems and this possible law suit MIGHT effect property values in my hood...on the other hand LV has a real short memory.

Now I suppose it comes down to my personal feelings...this house and neighborhood has left a bad taste in my mouth.. however I am finally able to just kick back and buffet down...

So do I stay or do I go....

[widebody911]

Take the money and run

[skipdup]

But, moving SUCKS!

[stevepaa]

So do you have a link to previous posts. I'd be interested to know how the builder was able to get permits to build and who did the geological testing and site certification.

If you have a bad taste, it won't go away. Move

[BlueSkyJaunte]

You need to drop that real estate like a stripper's bra.

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There is so much Building going on in LV...that Building Inspectors do Drive By inspections....Expansive soil is a COMMON problem in NW & N LV.....The LV valley is RIFE with soil problems...Henderson has it's exotic metals mfg plants from the Cold War...the waste was dumped out there for 50 years...and some of that is leeching into the ground water...

Ohh the Builder or should I say Builders have their Geo Tech companies dig the test pits and determine soil conditions...but the Builders have a one shoe fits all foundation solution...and handle home problems on the back end as warranty problems...where their insurance companies pick up the tab...and they know most home owners will just pass on the problems to the next owner.

[BlueSkyJaunte]

This is why I'll never buy or build in a "development".

Not to mention the distasteful 3000 sq. ft. cookie-cutter houses on 3001 sq. ft. lots.

[JavaBrewer]

Don't you have to disclose the problems you've had with the house to prospective buyers? Not saying that your house was improperly fixed but if the community is experiencing similar issues you might be up for a lawsuit if you sell before the ****e hits the fan.

I owned a townhome for 8 years in San Diego that went through a similar problem. Community class action suit filed against the builder that dragged for 6 years. Banks won't loan on properties involved with a suit and many people lost their a$$ because they couldn't sell.

[nostatic]

I believe you need to go on a shooting rampage.

In LV of course...

it's really the only reasonable thing to do

[Bob's Flat-Six]

One word Tab's, Motorhome.

[BlueSkyJaunte]

Looks like it's umanimous.

Unaninous.

Whatever.

[tdatk]

Tabs,
Move to Va 300k will get ya
this (my current home)

or this, my favorite. No cookie cutters here and the foundation is rock!
Tim.

[BlueSkyJaunte]

Gorgeous!

[targa911S]

you could come to Florida just in time for hurricane season, lose it all, and start fresh.

[lendaddy]

I need more insight into The Great Tabdula before making a recomendation

I mean if you're at the point where you have enough dough to live the way you want to live from here on out (and you're not concerned about leaving anything behind for someone) then just live where you're happiest and stop worrying about the financial side. I mean we spend our whole lives getting ahead so we can relax at the end, but most never actually do relax because it's become a lifestyle.

If Tabby doesn't like living where he lives.......move

If Tabby likes living where he lives.........stay

*Assumes financial stabilty regardless

My $0.02

[Drago]

Go on, take the money and run...

Move up to Seattle Tabs...we could use another curmudgeon around here to piss off the libs.

[TerryBPP]

Don't they require the contractor to provided soil testing results before building? It's required by the county here.

[onewhippedpuppy]

Originally posted by tdatk
Tabs,
Move to Va 300k will get ya
this (my current home)

or this, my favorite. No cookie cutters here and the foundation is rock!
Tim.

Very nice, if you move out into the sticks in central KS, it'll be half that! Of course, you won't have, uh, trees, hills, you get the picture. Oh yeah, get the hell out of the house, remember the cliche real estate saying, location, location, location, don't lose your ass because of yours.

Top house is nice, bottom house is beautiful, I love the cabin look.

[tabs]

I DO have to disclose...thats why I am going to spend the BUX to get this thing fixed according to Hoyle...so any prospective buyer can't whine...I'll show em the the Geologist/Engineering report and say this is what they said needed to be done and here is the paper work etc to show U that it has been done RIGHT...So you won't have any problems.

I won't be part of a CLass Action Suit...each house is a stand alone unit vs a Condo..and my suit is allready done...but what I'm afraid of is the smell that a Class Action suit would bring to this development...and the corresponding decline in value if any..

The area of LV I live in is the fastest appreciating area of LV with 56% last year and is one of the best areas in LV.

I also want to reiterate that the WHOLE NW/N of LV is rife with EXPANSIVE Soil...I saw a US HOMEs/Lennar Model Home that had some major cracking in it....and the home wasn't a month old....so ALL the Builders up here have problems...it's just how they address theor problems is the difference....

And Tabby isn't going to go on any shooting spree here or in LA...all though I now have those Assualt Weapons that are illegal in CA....and I'm not going to do it because Tabby has got his Ching Aling from the Builder to fix his problems and if I go now will come out clean and with a smile on his face...

Len I always worry about money... will my money last? I have good representation, have taken a hit from 2000 to 2003 that really hurt...The purchase price of this house was the same as equity I had in my last house...so this house is essentially paid for... The cost of living is cheaper here in LV than So CA...but not by much...no State Income Tax here in NV is the big advantage for me..and if the market runs in my direction for a couple of years, I'll be right back in the pink..and I'm getting the smell thats exactly whats going to happen....The BIG determinate is whether I can handle the summers here...there is absolutely NO RELIEF from the heat here in the summer...the weather the rest of the year is really nice, even if winters are crisp... which actually is a nice change from SO CA... U gota put a jacket on instead of a sweater...

I think it would be a GOOD idea to dump this house...buy another one...maybe just down the street in anothe development? One because my 250K 2 year capital gain exclusion starts over, Two, because I'll pay the 15% on the the remaining Law Suit money, and Three I'll be away from bad memories...

[ckissick]

This kind of story drives me crazy. I'm a geotechncial engineer, and I just got back to the office from a site visit to a house being built on highly expansive soil. I had the builder dig a 3-foot deep hole under the footprint of the house and backfill it with base rock, then put a 16-inch concrete mat slab on top of that.

Tabs, did the builder even read the soils report? They usually don't, but then I catch their design errors and fix it before it's built.

As for moving, I really can't speak for you. It sounds like your house should be OK after they repair it. Keep good documentation, for re-sell.

As a point of reference, there's a neighborhood near here that sounds just like yours. They built hundreds of houses in the '50s and '60s, and dozens had to be torn down soon afterwards because of expansive soil. Now, many of the old ranch-style housese are being bought for about $1.5 mil, and promptly torn down and replaced with grand estates. So the people who stayed got big money, in the end.