Lawsuits question builder's practices

Published Sept. 30, 2002|Updated Sept. 3, 2005

It was going to be his dream home: three bedrooms, two bathrooms, a two-car garage on a quiet, up-and-coming block of 22nd Avenue S.

Now James Simmons says General Home Development, the company he hired about 18 months ago to help him purchase a city-owned vacant lot and construct a house on it, has ended that dream.

In August, Simmons, 54, who says he is a Vietnam veteran living on disability, filed one of several recent lawsuits against the company that builds 75 percent of St. Petersburg's city-sponsored affordable hous-ing. Filed about six months after city officials held a hearing to determine whether the Pasco County-based developer complied with fair housing regulations, the lawsuits raise new questions about the company's business practices.

Simmons and two others who have brought separate lawsuits against General Home Development accuse the contractor of misleading homeowners and discriminating in contract and purchase prices. Simmons and others said the company's staff repeatedly dodged phone calls and neglected to explain changes in their construction plans and pricing.

Simmons' lawsuit says that General Home Development and its sister company Stoneridge Development committed fraud when it sold Simmons' lot and house to another buyer.

"I prayed on that house for years. How can they go and crash my dreams like that?" Simmons said.

General Home Development's attorney Leonard Johnson said he was familiar with Simmons' case, but not the other lawsuits. Johnson said he was confident that Simmons' lawsuit was a result of miscommunications, rather than misdeeds on his clients' part. "I think that perhaps there was a misunderstanding. But I do not believe that the facts will show that Stoneridge or GHD did anything wrong," he said.

Simmons said he had his eye on the vacant city-owned lot at 1730 22nd Ave. S for months before he decided to call General Home Development, whose number was listed on a bright yellow sign posted on the land. After struggling for years with a drug problem that landed him behind bars in 1993, Simmons hoped that a disability settlement he was expecting would give him a fresh start in a new home.

Within weeks of meeting General Home Development's owner-manager Brian Smith, Simmons paid the company $4,000. Smith agreed in a letter to purchase the lot for Simmons in January 2001. "We will help you on the financing if you can raise a sufficient amount of the purchase price of the lot," Smith wrote.

About a week after Simmons bought the property with financing from General Home in March 2001, things got murky. That's when, Simmons says in his lawsuit that Smith coerced him into signing a quit claim deed that made General Home Development's sister company, Stoneridge Development, the legal owner of the property. Simmons said Smith did not explain to him that signing the quit claim deed meant he was forfeiting his ownership of the land for good.

General Home Development's attorney said Simmons knowingly gave up his claim to the property. He said he found nothing unusual about the fact that the terms of Simmons' financing agreement with the company were never spelled out in a formal contract.

"My clients are experienced in this type of transaction and they have a very good track record of getting people into their homes for the first time," Johnson said. "I think Mr. Simmons probably fully understood what was going on in this deal."

A call to Brian Smith's St. Petersburg office requesting comment was not returned.

Patrick O'Connor, Simmons' attorney, claims the contractor later sold the property and the house to another buyer for nearly $120,000. O'Connor said the contractor did not notify Simmons of the sale.

Johnny Harrell, a physical therapist who lives in Clearwater, lodged similar complaints against the contractor in a separate lawsuit filed in July. Harrell said Smith and his father, Thomas Smith, misrepresented their intentions when they entered into a deal to help Harrell construct a home on a vacant lot they planned to purchase. Harrell's lawsuit says that General Home Development also sold their land to a third party without their knowledge or approval.

James Hammond, the Harrells' attorney, contends that the contractor "preys on" low-income home buyers whose credit is often questionable and whose knowledge of real estate transactions is limited.

This is not the first time General Home Development's practices have been scrutinized. The city suspended General Home Development's city contract in late February after several St. Petersburg residents in the city's WIN affordable housing program complained about the contractor. In March, the city held a hearing to review the status of the contract.

Deputy Mayor Tish Elston heard several home buyers who testified that the contractor delayed construction on their homes, sometimes for months. Like others at the hearing, Tyrone Ford said the company unexpectedly had him sign an addendum for $2,000 before building permits could be obtained. In the end though, the city decided to reinstate General Home Development's contract but referred the complaints to HUD.

Dissatisfied with the city's decision, Ford later filed a complaint against General Home Development with the Pinellas County Department of Consumer Protection and filed a lawsuit against the company in April.

HUD spokeswoman Linda Allen said the department's Tampa office found no evidence that GHD had violated federal fair housing laws. "As far as HUD is concerned this is a matter between the city of St. Petersburg and General Home Development," Allen said.

Deputy Mayor Mike Dove said the city was satisfied with HUD's review. He acknowledged that many of the homeowners' complaints about General Home Development stemmed from a lack of communication.

Tom de Yampert, St. Petersburg's manager of housing and development, agreed.

"The home buyers were buying homes with certain assumptions and aspirations. If everybody doesn't define the assumptions and aspirations, then you can't be certain that you're talking about the same deal," he said. He said the city now offers counseling to home buyers enrolled in affordable housing programs, walking them through contracts and construction plans before final closing.

Darlene Kalada, executive director of the Pinellas County Housing Authority's finance committee, said there have been no complaints about General Home Development since the company began participating in a countywide housing development program called Operation Kick Start in June 2001.

The county offered contractors like General Home Development construction loans to build affordable houses in five low-income zones including Union Academy in Tarpon Springs, North Greenwood in Clearwater, Greater Ridgecrest in Largo, downtown Largo and a slice of St. Petersburg near Fifth Avenue S and 16th Street S.

_ Times researchers Cathy Wos, Kitty Bennett and Caryn Baird contributed to this report.