Luxury homebuilder faces criminal charge
RG Homes founder defends himself, says document in dispute is legitimate
A luxury homebuilder whose work last year was featured in a well-known builder showcase has been charged with tampering with a government document in relation to a residence under construction in the upscale Bellaire neighborhood.
The charge, a second-degree felony, was brought by the Harris County District Attorney’s Office after a city building official discovered what he believed to be a forged certificate showing the home had passed an inspection.
Roy Gabbay, 36, founder of RG Homes, has had a number of complaints from customers who contend their new homes had leaks, cracks, mold and other serious construction defects, according to recent Chronicle interviews with homeowners.
Contacted by the Chronicle on Wednesday about the complaints, Gabbay said his attorney advised him not to comment because of arbitration. He referred to websites that defend his company’s position on two separate customers’ complaints.
A day later, he defended himself against the criminal allegation and said the document in question is legitimate. He
“I hope it means finally our voices will be heard.” Customer Paul Smith, who hired RG Homes in 2015
blamed misunderstandings involving his building superintendent, the engineering company and the city official.
City withholds report
Several homeowners are in or have filed for arbitration with the builder. Another has filed a lawsuit.
“I hope it means finally our voices will be heard,” said Paul Smith, who hired RG Homes in 2015 to build a new house on a lot he and his wife owned in Bellaire.
Harris County valued the couple’s home at $1.6 million this year, but after they protested based on repairs and construction defects the appraisal was lowered to $1.2 million.
In November, the Smiths and eight other owners of RG Homes called a meeting with Bellaire officials, including Mayor Andrew Friedberg and City Manager Paul Hofmann, to make them aware of construction, financial and other problems they said they were having with the builder.
The officials pledged to get an independent thirdparty review of the city’s inspection processes and procedures to see if changes were needed.
The results of that review, according to the city, were that no further action was needed and that the matter be concluded.
The homeowners have made several requests for a copy of the report, but the city has declined to release it.
Friedberg said in an email Thursday that the review was presented to City Council in an executive session in January and is “legally privileged.” He reiterated, “the executive session concluded with no further action taken on the matter.”
Assistant District Attorney Valerie Turner, chief of the consumer fraud section, said the criminal case filed this week is unusual because most contractor and builder complaints come from individual consumers. This case was presented by Bellaire police.
“We see complaints for all types, whether it’s a handyman who works in the neighborhood or builders with very expensive homes,” she said.
In a news release issued Thursday, the Bellaire Police Department said its Detectives Unit is investigating and no further information would be released.
The district attorney’s office alleges in a criminal complaint that Gabbay committed the offense, tampering with a government document with intent to defraud or harm another, on July 19 at Bellaire’s Building and Permits office.
Has previous charge
City building official William Davidson noticed that an RG Homes property under construction at 4530 Elm St. was missing a “Certificate for Crawlspace Wood Framing Inspection” from city files, according to the criminal complaint. Such work done incorrectly on the first floor of a house causes damage to the entire home, it says.
The official said he contacted Gabbay, who responded by emailing him a document showing the inspection was completed by Concept Engineers on Oct. 27, 2016. Knowing about complaints from other residents, the document says, Davidson contacted the engineering firm to verify the validity of the document and was told by the president of Concept Engineers that the company had done no inspection to the house on the date specified and verified the certificate was forged.
The criminal complaint further says the home failed a July 14 Crawlspace Wood Framing Inspection by Concept Engineers.
Gabbay said Thursday that construction on the home began in April and it passed the crawlspace inspection in October. He said his superintendent called for a new crawlspace inspection because “we didn’t realize” one had already been done. He blamed the July 14 failure on the fact that Concept Engineers had changed some of the construction drawings in the meantime.
He said he received a letter just this week from a different structural engineer showing it passed an inspection “based on the original design.”
A criminal history check on Gabbay showed a previous charge for Forgery of Financial Instrument that he received deferred adjudication on, according to the complaint.
The RG Homes website that Gabbay referred the Chronicle to notes 15 “recently completed” homes, most of which are in Bellaire.
One of those properties is Gabbay’s own home, which is for sale.
For sale signs removed
An agent with John Daugherty Realtors has been listing the house, for $1.475 million, as well as the house on Elm Street tied to the felony charge. That one, priced at $1.745 million, is under contract to a buyer.
John Daugherty said his agency began the process of terminating its contract to sell Gabbay’s home on Thursday. The company’s for-sale signs have been removed from both properties, he said.
One of the homes featured on the builder’s website, a house at 4532 Elm St., is accompanied by accolades from a the 2016 Spring Bellaire Showcase: “Best Master Suite,” “Best Kitchen,” “Best of Show” and “People’s Choice Award.”
But more than a year after the house sold to a family who moved here from the East Coast, the home’s bright stucco facade is now covered in signs reading “Fix my home” and “Nightmare on Elm Street.”
Owner Jim Rowe and his family moved out of the house after discovering leaks, cracks, mold and other problems with the construction. They have filed for arbitration.
In response to Rowe’s complaints, the builder posted a statement on a website called 4532ElmTheTruth.com, where he defends the work and says the owners moved in without the builder’s approval. The builder calls the owners “unreasonable” and says they have gone on a “personal crusade to try and ruin the Builders reputation and credentials in the City of Bellaire.”
A similar site was set up to respond to complaints from another former customer with a home on Birch Street in Bellaire.
Another homeowner, Minh Ly of Hedwig Village, filed suit against RG Homes in March, claiming breach of contract, violation of the Texas Deceptive Trade Practices Act, misrepresentation and negligence.
According to that lawsuit, the builder engaged in a series of “unfair and deceptive accounting practices,” including filing duplicate invoices, charging the homeowner for items that weren’t used on the property and for items that were not costs of construction, along with other accounting mistakes.
Ly was able to sue RG Homes because his initial contract did not contain an arbitration clause as the others did.
On July 3, RG’s attorney filed a general denial with the court.