Most standard contracts give the builder extra time in case of bad weather, labor shortages or material shortages because those things are outside the builder's control.
"Any builder's contract will have a provision where the builder isn't responsible for delays no matter how they're caused," Gaithersburg settlement lawyer Jim Savitz said. "Most contracts provide for somewhere in the neighborhood of one to two years for them to complete the work without liability."
Sonali Arya found that her house was far from finished at the time of the walk-through.
(Emilie Sommer For The Washington Post)
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Less Stress at Settlement
Here are some tips from experts on how to reduce stress when buying and closing on a new house:
• Look for a reputable builder. Check him out by talking to three to 10 previous buyers.
• Ask people who have already moved into the community about their experience with closing: Was settlement delayed? Why? And did the builder offer to pay for storage space or for any part of the delay?
• Know what is in your contract. Hire a lawyer experienced with residential real estate law and with the contract laws of your community. Put any changes to the contract, such as more time for notification of a settlement date or for appliance upgrades, in writing. This includes any changes promised orally by salespeople or other builder representatives.
• Don't be afraid to ask for changes in a contract. Though production builders generally do not make changes, sometimes they will, according to local real estate lawyers. "It doesn't hurt to ask," said David N. Crump, director of legal research for the National Association of Home Builders. "They're going to work with you; they don't want to create any hostile environment."
• Hire a private home inspector before the house is built, to follow it through construction and to accompany you on the final walk-through. Don't rely on county inspectors to find problems.
Sometimes builders will balk at allowing a separate inspection, so include that in a contract addendum. Be prepared if a builder asks to approve the inspector because he has had a bad experience with one in the past.
• Some contracts say the builder must give just five days' notice of the settlement date. Columnist and new-home-book author Katherine Salant says, "You should insist on changing this to have adequate time to arrange for a move." She recommends asking for at least 14 days' notice and as much as 30 days.
• Make sure you get a certificate of occupancy from the local jurisdiction. The certificate indicates that all the county inspections have been completed.
• Recognize that punch-lists, which tally up the items in the house that are not ready, are routine and that builders' contracts give them time, sometimes as much as two years, to make fixes.
• Remember that problems happen. Stay calm.
• Call city or county building officials if you think there is a code violation.
Many local jurisdictions also have special consumer affairs offices that deal with complaints about new-home builders or contractors.
• If you have a problem, document everything in writing and send all correspondence by certified mail.
-- Sandra Fleishman
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But that does not mean new-home buyers should expect a bad experience, Savitz said.
While "they're often shocked to see how many things still have to be done" during the walk-through that occurs several days to a week before settlement, "the punch-out crews routinely come in during the last week and take care of a significant number of items," Savitz said.
David N. Crump, director of legal research for the National Association of Home Builders, says buyers need to make sure they read and understand the terms of their sales contract so they will understand how the process works. Most contracts say settlement will occur when the house is substantially complete and ready for a certificate of occupancy from the local permitting agency, said Crump.
While the contract may set a time frame or date for completion, it will "also provide for reasons that that date may be changed," he said.
"Builders want to close the house as badly as the customer does," said Carol Smith, author of "Building Your Own Home: An Insider's Guide" and nine other books and a consultant to home builders and buyers. Because builders have to pay construction loans when they come due, any delays can cut into profits.
But Smith said delays can happen despite builders' best intentions. The subdivision superintendent may "just not be adept at scheduling," she said. The construction boss may not line up subcontractors in a timely fashion or be quick to rejuggle them when weather intervenes and schedules slip.
Genuario said being rushed to settlement, as the Aryas claim they were, is unusual. "Typically it's hard to hold new buyers off," he said.
But, other privately owned builders claim that large national companies sometimes do push buyers to close so the firms can make sales quotas. And they say sales staff might put pressure on buyers to settle by the end of a month or at the end of the fiscal year to get bonuses tied to quotas.
"National companies are more likely to press for closings because they have stockholders and parent companies that are very numbers driven," said Craig Havenner, president of Christopher Cos., a privately owned Fairfax developer-builder. "If they tell their stockholders that they are going to close a certain number by a certain date, they are very driven to do that."
However, Jim Williams, executive vice president of the Northern Virginia Building Industry Association, said he has "never heard of a case where a buyer was pressured to settle or forced to settle."
He said, "Every salesperson has a sales target they would like to achieve. But . . . most builders wouldn't close a house just to meet a quota."
Arya contends that her builder, Ryland Homes, wanted her and her husband to settle on Oct. 31, despite the problems she had listed because the sales staff was trying to make a quota.
