FOX 29 Investigates: I-Team Developer Fight
SOUTH PHILADELPHIA (WTXF) - "This is the worst home buying experience you could possibly have. I don't think you could top it."
Like so many young professionals in Philadelphia, Graham Palusky had a dream to own his first home. Last summer that dream came true when he bought this new home on the 500 block of Dickinson near the up and coming East Passyunk Avenue neighborhood.
"I thought it was a great investment. There's a lot of opportunities in the neighborhood. You've got 98 townhomes coming up next door. In the five to six hundred thousand dollar range. It's going to bring 300 to 400 residents to the neighborhood, great view," Graham said.
"I thought I was going to move down here, hang out with my family and friends, have a great home. Have a great time in Philadelphia, not deal with any of these issues."
Justin Fenerty bought the new home right next door to Graham Palusky, his college roommate at Penn State. He moved into his new home right after Graham. But within a few weeks, they both realized something was wrong. The houses started to leak, a lot.
"At one point in time I filled up two full buckets of water that came straight down from here," Graham said.
"It's a disaster..."
"Last week when we had that major storm, I filled this whole bucket up with water," Justin said.
Graham and Justin quickly traced the leaking water problem to the windows and the outside decks.
"Water can run right in there. Little holes you basically stick your finger right down in it."
That's where they found serious leaks and ponding water every time it rained. Both Graham and Justin called Anthony Valenti of Design Builders, who supervised the construction of the homes.
"Basically he walked away. He came one or two times, gave us a whole spiel that he would be out, that he's going to fix it."
Design Builders came out. And rather than reconstructing it and fixing the primary issue, they put a band aid on it by slapping on 2 pieces of low grade plywood and hiring some fiberglass guys to come and fiberglass over it.
The next time it rained, Graham says the water continued to pour in.
"It didn't fix the issue, water continued to come through and now it's progressing," Graham said.
Justin says every time it rains, his house leaks.
I have water leaking every day. I'm always worried about looking at the weather schedule. Making sure I have towels ready to go where my home is leaking and hoping I don't appear with a new area that's leaking.
Graham says he found more leaking water throughout the home. So again, he called Valenti and Design Builders back to the home.
"He was responsive and he came out. He dabbled around, put some band aids on the issues and it just didn't work out. Once he realized that it was going to cost money to get it fixed, he walked away," Graham said.
Graham hired a lawyer and a professional engineer. It cost him $6,000. The engineer spent several days at his home. He filed a 67-page report citing over 40 problem areas that needed to be fixed. The report was complete with photos documenting the problems and the water damage.
"The total damages amounted to $100,000."
Justin also hired an attorney and an engineer to document the problems at his home. He estimates the damages at over $50,000.
"Being a young guy. Being a first time home buyer. I'm not able to get a loan, I'm not able to find any money to help me fix this home," Justin said.
Graham says he called Valenti and Design Builders again, who by that time were working at 15 more townhomes a few blocks away at Moyamensing and Moore at a development called Moyamensing Place.
"He told me everything you want to hear, but he never followed through. Haven't seen him in six months."
"My hardwood floors are all warped, they're basically ruined from the door all the way back to right around this door. All bowed and buckled.
"I'm just shocked. You would think as a builder and a developer with 15 more projects just down the road, you'd have some kind of integrity in the product you're producing."
Graham and Justin decided to put up this banner across the front of their homes, complaining about the leaks and their home warranty with Design Builders.
"The warranty's no good? Yeah, why? Because the builder walked away. The builder walked away.
"It's proven to be not even valid."
So we took our FOX 29 cameras to Design Builders office on Cheltenham Avenue in Tacony looking for Anthony Valenti to get his side of the story.
Dave: I'm Dave Schratwieser from FOX 29. I was looking for Anthony Valenti if he's in.
Employee: Uh he's not in. Not in today.
Dave: Would you give him my card if you would. I have some questions about some homes he built on Dickinson Street.
FOX 29 also went to Design Builders' latest job site in South Philadelphia, again, looking for Valenti.
Dave: I was looking for Anthony Valenti if he's around today?
Employee: No, he's not here sir.
Dave: He's not here?
Employee: No.
Valenti called FOX 29 the next day saying he was not a contractor and said, "I don't bang nails." He said he was paid $700 a week to supervise the sub-contractors who built the homes. He said license and inspections approved the work every step of the way. He also claims developer Joe Ruggiero still owes him $30,000 and that's why he never returned to fix the problems. He refused to do an on camera interview.
Valenti, who says he's built 70-80 homes in South Philly, went on to say he told the homeowners to put tarps down over the decks and problem areas. He say he told them when the winter weather cleared he would come back to fix the problems. He said the homeowners didn't want him back. And the developer wouldn't pay him.
Finally we called Joseph Ruggiero, he's the developer and the seller of the homes Graham and Justin bought. We got his answering machine, so we left a message.
Dave: Joe, I wanted to ask you about some homes you were involved in building at 5th and Dickinson. 507 and 509.
A day after our call to Ruggiero, he contacted Justin and Graham via text message and told them Valenti would be back out to make the repairs.
"There's no real protection for home buyers. It's kind of surprising . It's the most important asset. To most people is their home and there's no real protection when you're in this situation."
Ruggiero also told FOX 29 over the phone from his home in Florida that Valenti is responsible to make the repairs under the homeowners warranty.
"Legally, he's the builder," Ruggiero told FOX 29.
He went on to say that he felt "bad" for Graham and Justin, saying "it's not right." Ruggiero also said Valenti told him he would take care of the problems. He says he paid Valenti close to $40,000 for the original construction.
Graham is now suing Ruggiero and Valenti to get his home repaired and pay for the damages.
"First time homebuyers , they invest all their liquidity into the home so then when you're in this situation, one, you have to fix the problem, that's the most important thing, which costs money, and two, if you're going to try and collect, you have to pay legal fees and hire engineers."
Justin is also suing. He filed this consumer complaint with the state attorney general's office looking to mediate the problems and repairs with Valenti and the seller, Joe Ruggiero. That went nowhere.
"Joe Ruggiero responded, Anthony did not respond, but Joe Ruggiero basically pointed the finger to Anthony and these were things he needed to take care of."
With the city in the midst of a big building boom, Graham believes there are more first time homebuyers out there with problems like this.
"This is not an anomaly. It's happening all over the place," Graham said.
"It's happening all over the city.
"We have numerous emails, phone calls, text messages to Valenti and Joe and no one ever came out to help us with this. Now we're in this bind."
A spokeswoman for the Department of Licenses and Inspections says both homes went through inspections "systematically" and "easily passed each stop along the way." She could not explain why l and I didn't uncover any of the items that the engineers for Graham and Justin say caused the homes to leak.