Sharon and Paul Conway moved into a new house in the Willow Woods Estates subidivision near Mitchellville two months ago and stepped into a life of conflict.

The conflict, they say, is with the builder, The Ryland Group, a firm that is one of the largest builders of moderately priced houses in the Washington region. The firm is active in several states and has built more than 10,000 houses in the past decade.

When they moved into their $62,500, four-bedroom houses on Bald Hill Road, the Conways said, the furnance was not working, flooring failed to meet the walls, light switches were improperly wired, the hot water heater was faulty, there were holes in the walls, molding was not nailed down, and a bulldozer had cut their phone line. Two days later their crawl space flooded. A sump pump had not been installed so they could not remove the water.

Ryland officials say the Conway case is an exception, that most repairs were completed in a timely fashion, and that, to some extent, the Conways were responsible for many of their problems. A Ryland official says there have been typical new home problems elsewhere in the subdivision, but says the Conway's situation is representative of what can happen when problems get out of hand.

"I've given these people a lot of time and effort and consideration," former division manager Maurice Simpkins said. "There have been times when I've agreed to have people there and they (the Conways) have not been there. . . . I thought we communicated all the problems."

Buyers, builders and consumer agency officials here say that virtually all new homes require some finishing work at or after settlement. In the vast majority of cases such work is routinely finished by the builder.

Problems with new houses can occur at all price levels, buyers said.

Building a home is a complicated process, said Edward R. Carr, a home builder in Northern Virginia. Factors such as the weather and the availablity of skilled labor often leave finishing details to be completed, he said.

Carr, whose firm built 400 houses last year, said this is the "tightest market for qualified labor" he has seen in recent years.

"It's reaching the point where I think the industry cannot produce everything we sell," he said.

"There have been problems since the first house was built," said Robert Johnson, executive vice president of the Northern Virginia Builders Association. Disputes often arise because of communications problems, he maintains. In some cases, problems arise because buyers don't understand that inflation has devalued the worth of a dollar and the level of workmanship in the houses they buy, Johnson added.

One buyer in the Churchill subdivision near Germantown maintains that a builder of a new home "can make it heaven or hell." Andrew G. Magyar, who purchased a four-bedroom house for more than $60,000 from Arlen Realty and Development 18 months ago, said a wall leaked and the floor vibrated. The leaks were later repaired and double joists were placed beneath the first floor, he said.

But Magyar, a physicist, said the second joists were useless because they did not connect with the flooring. He added shimming on his own to resolve the problem, he said.

Angelo Mambrino, project manager for Sparta Brook Construction Corp., the company that builds the houses for Arlen at Churchill, says many delays in repair work there were the result of shortages of skilled labor and poor weather that limited outside repairs.

"You can't believe the shortage of people," he said. He said masons, electricians, sheetrock installers and tappers were in particular demand.

Many exterior repairs have had to be scheduled for spring, Mambrino said. He described the winter as a "total loss" because of the weather. Leaky basements and other problems that require grading repairs will have to wait until the ground thaws, he said.

At the Fairlington Villages, a 3,439-unit condominium conversion project near Alexandria, buyer Gene Fazio found a chipped and cracked sink in the bathroom of his two-bedroom town house, which cost in the low $60,000s. He had not seen it during the presettlement inspection and the warranty clearly stated that the developer, CBI Fairmac Corp., was not responsible. Fairmac replaced the sink anyway.

Several Fairlington buyers said the developer had provided them with 30-day inspection forms that enabled them to have repairs made on items they missed during the pre-settlement inspection.

But one buyer said her unit was not finished when she went to settlement, despite promises by the developer. She said the toilet leaked through the floor, the carpet had to be replaced and floors had to be refinished after workmen damaged them. A drain in the basement bathroom was covered with cement, she said, but Fairlington repaired the damage after the floor had to be ripped up.

The buyer, who asked not to be identified, said she was "frustrated" by the number of workmen who came through her house every day. But asked if she would buy again at Fairlington, she said, "I'd do it again." Most of the problems were a "matter of timing," she said, adding that she felt Fairlington had sold more units than it could convert at one time.

While Paul and Sharton Conway's house in Prince George's County had an unusual number of problems, their situation reflects three frequent areas of dispute in the home-buying process: settlement, builder performance, and communication between buyer and seller.

Prior to settlement, a Ryland representative and Paul Conway, who is an assistant manager of a grocery store, inspected the property and completed a "punch sheet," a list of items that needed to be finished. The form stated that the firm would make every effort to complete the items within seven days of inspection.

The sales agreement had not mentioned a specific number of days but said repairs would be made "as soon as practical." Although the pre-inspection form did not say so, it is actually part of the Ryland warranty system. The company does not belong to the Suburban Maryland Home Builders Association, which has its own warranty program.

At settlement, the Conways said, they received a notebook-like "Homeowners Guide." This stated, for example, that Ryland would repair or replace electrical fixtures noted by the buyer on the pre-settlement sheet. The Conways said the electricity was off when their inspection was conducted.

Ryland stated in its purchaser's guide that its policy was "not to escrow for items which cannot be completed by reason of weather conditions." However, the settlement sheet shows that the lender withheld $675 to insure that grass and shrubs would be planted outside the Conway house. No money was withheld for repair costs or for interior items that were not yet in place, according to the settlement papers.

The Conways said at settlement they were told that their house did not have a use and occupancy permit from the county. They said that on Friday, Dec. 16th they waited in vain for an inspector to arrive. They had to move in on the 17th and did, but two days later, Ryland received a violation notice from the county builder inspector because there was no use and occupancy permit for the property. A temporary permit was issued.

Under Ryland's repair policy, any defects found in a house are to be outlined to the production supervisor if they occur 30 days after settlement. Following that period, buyers are supposed to keep a list of items that can be discussed at an inspection six months after settlement. Ryland supplies the names of subcontractors for emergencies and, for "extremely complex" problems, buyers are instructed to write the local Ryland division manager.

Ryland officials maintain that had the Conways followed this procedure many of their problems could have been avoided.

"Any builder is going to have some problems," said Frederick Kunkle, the Washington division manager for Ryland. "I'm not saying we won't have any problems at all. However, most customers follow the procedures we ask them to follow in our book and they do contact the division manager when they have a problem or send us a letter."

Six weeks after settlement, Kunkle said, most repairs had been made on the Conway house.

"We show on our pre-settlement list that approximately 90 to 95 percent of the items are complete," he said.

Ryland officials acknowledge that a sump pump was not installed at the time of settlement, a problem they dedescribe as an "oversight" by their plumber. They maintain, however, that when they heard about the problem they sent a supervisor to help drain the area.

Maurice Simpkins, Ryland division manager until the end of 1977, said he worked extensively with the Conways.

"From the time of the first contact, I promised to stay in touch with them and they were to stay in touch with me . . . ."

While the Conways say the Ryland communication system failed them, Simpkins said the Conways have not always been at home when they said they would.

"We feel it is patently unfair for someone to tell us there are any workmanship defects in their house the first week they're in there," said Walter J. Hodges, president of the company that's developing Fairlington Villages. "We'd rather have them in, settled down, and be there for 30 days and then call us. The one-year warranty still holds and they're entitled to all of it at the end of the year."

Next: Does a disgruntled home buyer have any outside recourse?