State AG investigates claims Pulte is not honoring home warranties
Firm says it also is looking into complaints, has hired new division president to oversee N.M. operations
New Mexico Attorney General Hector Balderas has opened an investigation into the nation’s largest homebuilder after receiving complaints that PulteGroup may not be honoring home warranties.
“I am deeply concerned that the safety and economic well being of these homeowners and their families might be compromised as a direct result of Pulte’s failure to address emergent issues reported,” Balderas wrote in a letter last week to Ryan R. Marshall, president and chief executive of the Atlanta-based Pulte.
Complaints have been made by a small group of homeowners in Rio Rancho and Albuquerque who called the consumer division of the Attorney General’s Office. Some of the controversies are contractual, and the attorney general’s staff has referred those buyers to the dispute resolution process both sides agreed to at the time of sale.
Other issues are more serious, and Balderas said he has asked for Pulte’s cooperation to resolve them. Among
them are not refunding an earnest money deposit when a buyer lost his job and complaints over cracked tile, concrete and grout. In one case, a homeowner said the heating and cooling system was insufficient for the 3,000-square-foot house.
“On their face the allegations against Pulte Homes point to a series of troubling business practices that harm New Mexico consumers and may be in violation of the law,” Balderas wrote.
A Pulte spokeswoman said the 65-year-old company has “launched our own analysis to ensure we fully understand the underlying issues which prompted involvement from the New Mexico AG’s office. Pulte remains committed to working cooperatively with the AG’s office.”
Valerie Dolenga of Pulte corporate communications added that the company has taken actions to improve customer response times and service. She said it also has named a new division president to oversee all New Mexico operations.
“At PulteGroup, we stand behind the homes we build and apologize to any of our Albuquerque and Santa Fe customers who have not received the high quality of homes and service we strive to deliver,” she said in a statement.
Pulte started as a family company and built its first home in Detroit for $10,000, according to the company website. Last year it closed or had under contract almost 20,000 homes. Revenue from sales was $7.7 billion, up 28 percent from the year before. The company has reported that new orders are up 11 percent and it has 139,000 home lots under contract nationwide.
The company is publicly traded under the symbol PHM. It has several divisions but builds in New Mexico under the brands Pulte, Centex and Del Webb. It has recently acquired several lots in the Las Campanas subdivision and is taking contracts for construction in spring.
When Balderas was considering a run for governor, he was criticized for not paying enough attention to consumer protection issues. He has since been more visible on that front, though he decided not to run for governor.
A Democrat, Balderas released his letter to Pulte to the press, publicly announcing his investigation. Two months ago, he issued public statements about his office’s efforts to collect unpaid insurance taxes from Presbyterian Health Plan. He also has given more consumer advice since the recent data breach at credit bureau company Equifax.
Pulte has been in the spotlight in Santa Fe as well, where it is building more than 200 homes for middle-income families and retirees in the Las Soleras subdivision.
Neighbors in the adjacent subdivision of Nava Adé have complained to the city of Santa Fe’s Land Use Department about blowing dust and debris from the Pulte homesites and other projects in Las Soleras, including Presbyterian Medical Center.
A Pulte executive recently told the Santa Fe Planning Commission it is taking the complaints seriously and has implemented a process to contain the dirt. Still, city inspectors have placed a restriction on Pulte that limits the amount of land it can clear at one time until the issue has been resolved.
Pulte homes also have been the subject of consumer complaints in the Colores del Sol subdivision off Airport Road, west of the Santa Fe Country Club. Those homes are several years old and were built by Pulte’s Centex subsidiary, which is aimed at a more affordable market.
Those buyers have cited cracked stucco, concrete and tile and are working with an attorney to try to resolve the issues with Pulte. That lawyer, Scott A. Booth, cited client confidentiality and could not confirm the name of the neighborhood, but a letter about the conditions came to the attention of The New Mexican.
“We’re going to be pursuing a claim against Centex,” Booth said of clients in Santa Fe and Albuquerque..
Booth said homebuilders often provide a one- or two-year warranty to buyers without letting them know that New Mexico law makes builders liable for as long as 10 years in some cases for construction defects.
Staff writer Justin Horwath contributed to this story.