After 8 years diligently rebuilding my credit and saving up a sizeable down payment, I purchased my first house in 2013. With a surplus of houses in the market, prices were low, and the timing couldn’t have been better. The four-bedroom home is in Columbia Heights, MN (a suburb of the Minneapolis / St. Paul area).
However, I never suspected that the beautiful walls and finishing work were secretly hiding building code violations and hazardous living conditions. Days later when my plumbing began leaking inside the walls it became clear that I had become a victim of “predatory remodeling“. The problems left me without a working kitchen, bathroom, or laundry room for months, and half of my house became completely unusable. With no legal recourse, I became responsible for completing structural, electrical, plumbing, and HVAC repairs that cost more than $100,000. I only had months to finish the critical problems. Otherwise, the city building inspector would have “red tagged” my house and condemned it.
Because our new home had no equity, additional financing was not possible. We could only afford to hire contractors for a few months. When my savings ran out, I spent the next 6 years completing the repairs myself.
The experience left me with a crippling amount of debt and despair. Under these circumstances, my investment will likely never appreciate enough value to cover the cost of repairs. Thanks to a few individuals who knew exactly how to manipulate the system, it is the first and probably last house I will ever own in my lifetime.
Who did this?
Many people are involved in the sale of a house. I was shocked to learn how many of the people listed below either directly had a role in this fraud or knowingly allowed it to happen.
The Seller
The person most responsible for this fraud is the flipper who bought the house in late 2012 and resold it to us a few months later in early 2013. He intentionally concealed a multitude of problems and hidden code violations, which were then transferred to us. Although he does not have a real estate license, he knows the process and how to exploit loopholes. Flipping houses and deceiving buyers about their condition is his business. When he modifies a house, he does not rehabilitate it. Instead, he ignores building codes, does not obtain permits, and avoids inspections. He is a profiteer who stands up a new LLC for each of his exploits and defers paying taxes indefinitely.
Paul Roald Evenson, Unlicensed Remodeler
Remodeling work was done on our house by Paul Roald Evenson. In a statement collected by an Anoka County investigator, Evenson claims that he was hired by his friend, the Seller, to hang some drywall and lay some flooring at our property. Evenson says that he checked the internet to make sure no permits were needed for this work, and that all other work (plumbing, electrical, structural, HVAC, etc) was already done before he began his work. Evenson says the Seller paid him about $500 in cash for this work, and that no paper trail exists. Evenson was present at the closing where he had power of attorney for his friend, the Seller. Evenson’s name was hand-written into the closing documents. At the closing, Evenson was boasting that he once refused to comply with a building inspector’s orders during an argument over building code. Paul Evenson is partially responsible for remodeling our home, and is a highly-trusted associate of the Seller. I would not do business with Paul Evenson again.
Jeff Hamson, Realtor
When I was looking for a house, a family friend referred me to Jeff Hamson of Edina Realty. Jeff’s real estate license number is 20495721. Jeff knew that this was my first experience as a buyer working with a Realtor and that I was shopping for my first house. Jeff had me sign all documents electronically by myself, rather than going over them with me in person. When I expressed my concern over the disclosure waiver, Jeff said that it was very common, no big deal, and that if I challenged it, it would slow down the entire process and I would probably lose the house to other bidders. Prior to the sale, Jeff knew about several of the problems with the property, but he did nothing to sway me from this first-time home purchase. Jeff Hamson flips houses himself, and does not use licensed contractors. He knew my house was being flipped and said nothing. After the closing, Jeff became aware of the growing number of problems with the plumbing, structural issues, and so on. Jeff tried to refer me to an unlicensed electrician that he frequently uses. He suggested that I work through Edina Realty’s arbitration service rather than take a more formal legal route that would offer more options. Over $100K was needed to repair our property that Jeff closed at $174K. When the media began to take notice when our house problems, Jeff authored an article for his real estate team’s customer newsletter explaining the importance of choosing a Realtor who will look out for your interests because there is no such thing as a “lemon law” for houses. We are left feeling that Jeff Hamson’s primary interest was collecting his $4,769 commission at the closing, rather than steering us away from a predatory remodeler. I would not do business with Jeff Hamson again.
Tony Oskooi, Listing Broker
Before the purchase, our property was listed by Tony Oskooi of Bridge Realty. Tony had a relationship with the Seller, and was uncooperative during an investigation into our predatory remodeling case. Bridge Realty took a $4,845 commission for listing the fraudulent property for the Seller, $495 of which went to Tony himself. I would not do business with Tony or Bridge Realty again.
Jordan To, Listing Agent
Before the purchase, our property was listed by agent Jordan To of Bridge Realty. Jordan had a relationship with the Seller, and was uncooperative during an investigation into our predatory remodeling case. Jordan To took a $2,000 commission for listing the property on the Seller’s behalf. I would not do business with Jordan or Bridge Realty again.
Sadrian Trung Huynh, Real Estate Agent and Loan Officer
When the Seller needed to discreetly list his illegally remodeled property, he asked his friend Sadrian Trung Huynh to help him find a listing agent. Sadrian introduced the Seller to his former colleague Jordan To of Bridge Realty.
Patrick Cullen, Home Inspector
The real estate inspector who checked out our house before the purchase was Patrick Cullen of 1st Step Home Inspection Services. Choosing a qualified home inspector is critical, and a great guide for that is in Mike Holmes’ book “The Holmes Inspection“. I wish I had read this book before buying our house, because I would have learned you should NEVER hire an inspector that was referred by your Realtor. I highly recommend studying this book as a first line of defense against predatory remodeling. I would not do business with Patrick Cullen or 1st Step Home Inspection Services again.
A Commitment to the Public
I maintain this blog to increase awareness of predatory remodeling and the fact that often there is no clear legal recourse for victims. In my case, justice was never served. Instead, I publish my insights to help homebuyers look for warning signs, measure risk, and avoid becoming victims themselves. Furthermore, I am actively working with public officials to prevent this type of fraud, close legal loopholes, and establish recourse for victims. I will fight for these changes in my county and state to bring predatory remodeling to an end.