New Richmond home builder in hot water with customers, subcontractors
When Margaret Christian and Ferdinand Pacheco bought their home in New Richmond this winter, they did not get what they expected.
They hired local home construction company Felicity Homes to build their dream home after paying $11,000 for a plot of land as down payment. Christian said the company's owner told them they'd be able to close on the sale on the same day as their old home.
But when the closing date approached last fall, communication with the owner became sporadic, and they started to get nervous because construction had slowed.
In the meantime, construction liens started piling up.
The house in the 1100 block of Tamarack Place had three open construction liens filed this past year in Wisconsin Circuit Court. Contractors claim they haven't received payment for insulation, concrete and lumber work.
"It was a nightmare," Pacheco said. "I don't know how this guy is still in business."
The unsatisfied lien amount on his home totals $23,522.88, according to court records.
But he and his family are not alone.
According to more than 50 Wisconsin Circuit Court filings against Felicity Homes LLC, some two dozen properties have unsatisfied liens filed against them. In all, the amount has swelled to more than $210,000 for alleged unpaid construction work in less than two years.
Construction Lien filings by date
A number of the homes with filed liens have been sold, and new homeowners may be on the hook for the amount plus interest if they remain unpaid.
Under Wisconsin state law, the homeowner is often responsible when a contractor doesn't pay subcontractors or suppliers unless they sign a waiver removing them from financial responsibilities for any unpaid work.
The individual amounts — filed against properties in New Richmond, Baldwin and other St. Croix County towns — range from a few hundred dollars to more than $30,000.
Felicity Homes LLC owner Justin Leach said while the number of court filings appears large, payments went to contractors when his customers bought their homes. He said busy contractors are sometimes slow to file documents saying the outstanding amounts were paid or satisfied.
"In general, we want to pay guys as quick as we can," he said. "We're not going to screw them out of the money."
Construction companies also have filed $6,488 in liens against the company's home office on County Road GG. Properties registered to Felicity Homes LLC have $3,635 in outstanding taxes from 2016, according to St. Croix County tax records.
Felicity Homes is listed as closed on Google, and its website and social media accounts have been taken down.
Leach said the company is operating, but he decided to shut down the website and stop taking on new customers for custom-built homes. Instead, he said he plans to finish building homes he's started and list them for sale once they're completed.
St. Croix County lists Felicity Homes LLC as the owner of 16 properties.
The Better Business Bureau posted an F rating for the company and lists two closed complaints on its website.
Lisa Schiller, director of investigations and spokeswoman for the Wisconsin BBB, said the organization considered the complaints closed because Felicity Homes didn't respond to calls, postal mail or emails seeking a response. The organization gives businesses 30 days to respond before considering the complaint closed.
Leach said he wasn't aware of the notices.
"If we don't know about it, we can't fix it," Leach said. "If there's an issue or concern or something, people just need to email us or do whatever."
The best advice for customers is to obtain a lien waiver from the contractor and not pay the general contractor in full until they get one, Schiller said.
She also recommended home buyers compare costs with other businesses, check on a builder's insurance, bond and licenses, and sign a contract with clear completion dates.
Scott Morgen, a first-time home buyer said although he's satisfied with the quality of his home, the process of working with Felicity Homes was a headache.
He bought his home a few weeks later than he anticipated, but in a rush to close on the home before his financing expired, he overlooked a few items that weren't complete.
"None of the windows have screens," he said. A defective ice maker caused water damage to his kitchen floor.
When Morgen's one-year warranty came up this April, he attempted to contact Felicity Homes but didn't receive a response.
Still, he said, "I have a home, it's complete and livable. There's just a few things that I have to pay for that I've already paid for."
After being re-assured her home would be completed, Christian and her family stayed at the AmericInn Hotel for about a month. Later, when more setbacks occurred, they stayed with family while they waited.
As months passed, she said she worried if she'd be able to keep the financing for the mortgage. She had also signed the property over to Felicity Homes with the agreement that they would buy the home when it was finished, she said.
"I never thought in a million years that we would go through so much," Christian said. "I would cry and not sleep because I didn't know if I was going to lose the financing."
She estimates the added costs storing her family's belongings, hiring an attorney, staying in a hotel and racking up other expenses totaled close to $9,000 because of the delay.
"All of these items will not be reimbursed," Leach wrote in a Sept. 6, 2016, email to Christian after she requested compensation.
When Christian and her husband finally closed on the home this winter, a few items around the house remained unfinished.
On a recent warm day, Pacheco realized the air conditioner hadn't been hooked up. When he called the company that installed it, they declined to come out because of an outstanding balance.
On one occasion, a person came by the couple's home claiming to have not been paid for installing a banister.
Residents in Baldwin also have voiced concerns about unfinished properties.
Shawna Welde lives next door to one Felicity Homes project that has been under construction since last year.
She said she hasn't noticed anyone working there for months and worries that the unfinished home, piles of dirt and unkempt yard work could hurt her property value.
The hole construction crews dug began to fill with water last year. Concerned for safety of kids in the neighborhood Welde said she filed a complaint with the city to have it drained.
It also started to smell like a swamp, she said.
Contractors say they haven't been paid
Nick Morrow is still unsure when he'll get paid for the stone work his company did on three Felicity Homes projects.
When his company, Stunzya, takes on a job, he has 30 days to pay for the material. Otherwise, it goes against his company, he said, and he has to keep a good relationship with his suppliers.
"We can't just stop because of one guy," Morrow said.
Aside from filing lawsuits in circuit court, filing a lien against a property is often the only recourse contractors have when they aren't paid.
According to court records, the River Falls-based Stunzya filed more than $5,500 in liens between three properties, all of which have been sold to new owners by Felicity Homes. Six other businesses have unsatisfied liens filed against Felicity Homes more than a year ago.
"It's kind of frustrating, but I feel bad for the homeowners," Morrow said. "Everything looks really nice, but he takes all the homeowners for a ride."
Eric Gubricky said he's had the opposite experience while doing warranty maintenance work for Felicity Homes. Though he said he's had to hound Leach for payment at times, he's always paid him for his work.
"It's a whole timing thing," Leach said, adding that certain criteria need to be filled until he issues payments. Some contractors file construction liens before the work is completed, he said. "That's why they haven't been paid yet."
But Morrow said after waiting for payment on previous projects, he filed papers and is moving on.