A build-it-yourself house company has accepted a Federal Trade Commission consent order to stop running ads that say anyone can easily assemble the pre-cut components without help from skilled building tradesmen. The agreement involves Insilco Corp. of Meriden, Conn., and a subsidiary. Miles Home, Inc. of Minneapolis, Minn.
According to the complaint filed in Chicago, purchasers were not informed that they probably would need professional help or, in some states, that the law required plumbing and wiring to be installed by licensed contractors. Moreover, clients were not told the company would take a mortgage lien on the property as security for a note to cover the price of the materials, the FTC said.
The complaint also alleged that deliveries were late or made at the convenience of the company, not the home owner. Also, purchasers were not aware they would have to pay delivery charges on items not delivered by the company, the FTC said. There were also alleged violations of the Truth in Lending Act.
Herb Khaler, president of Miles Homes, said the complaint dated back four of five years and that advertising had since been corrected.
Miles sells about 2,000 build-it-yourself houses a year, mainly to persons in rural areas. The basic package - all structural materials plus interior walls - costs between $13,000 and $25,000 for a two- to five-bedroom house. The electrical and plumbing fixtures, along with amenities such as bathroom vanities, cost about $7,000 in addition. The cost of everything else involved in the house construction - the land, foundation, garage, well and sceptic tank - is also additional.
Miles provides no labor, but it will answer telephone inquiries if anything goes wrong. Khaler declined to estimate how much buyers can save by doing it themselves. But he cited the case of a Glen Burnie house builder who bought the basic package for $20,000 and subsequently resold the house for $70,000.