Enterprising Investor
3 years ago
Lawsuit claims D.R. Horton homes can’t withstand Louisiana humidity; Alabama case alleges ‘critical mistakes’ (3/12/22)
By Megan Wyatt | The Advocate, Baton Rouge, La.
Alicia and West Dixon purchased their first newly constructed home from D.R. Horton in 2014 because it was in the school district they desired and they liked the home’s layout.
Now, eight years later, they feel trapped in their Youngsville, Louisiana, house, which they say has toxic mold because of faulty construction that the builder didn’t properly address during the home’s warranty period.
“We’re still living in the home right now,” Alicia Dixon said in a Thursday interview. “We can’t afford to move, and we don’t have any family in the area.”
“You’re essentially a prisoner in your own home,” added her husband, West Dixon.
The Dixons have become the face of what attorneys hope will become a class-action lawsuit against D.R. Horton and one of its subcontractors.
Ten south Louisiana attorneys sued D.R. Horton and Bell Mechanical Services in state court this week on behalf of the Dixons and thousands of other homeowners in Louisiana. The attorneys, who filed the lawsuit Tuesday in the 19th Judicial District Court in East Baton Rouge Parish, have asked for a judge to rule on whether the case may proceed as a class-action lawsuit.
“Based on our experts’ investigation, some D.R. Horton designed homes are prone to leakage, high interior humidity levels, and mold or mildew growth,” the attorneys said in a Thursday statement. “We anticipate that thousands of homes across Louisiana and the South will experience these issues.”
The petition was filed by Lafayette attorneys Lance Beal, Alan Haney and Yul Lorio; Baton Rouge attorneys Lewis Unglesby, Lance Unglesby, Jordan Bollinger, Adrian Simm Jr. and Jamie Gontareck; and Denham Springs attorneys Calvin Fayard Jr. and D. Blayne Honeycutt.
Together, they allege that homes built by D.R. Horton after 2012 were not constructed to withstand “normal and typical Louisiana weather.”
D.R. Horton and subcontractor Bell Mechanical Services allegedly “conspired together to intentionally mislead” the Dixons and other homebuyers in a “scheme of fraud and racketeering” while installing and repairing HVAC systems in the new homes, the attorneys said.
The lawsuit alleges that the Dixons’ home was constructed with improper attic ventilation and an improper air-conditioning system that created a negative pressure environment in the home, which draws warm, moist air inside.
When the Dixons took their concerns to D.R. Horton during the warranty period, Bell Mechanical often did not address problems until months after warranty claims had been submitted, the lawsuit says.
Repairs and corrections to known design defects were dragged out “to conceal the home issues and defects with quick fixes, including installing dehumidifiers in the petitioners’ homes,” the lawsuit says. The homeowners were required in the terms of the home warranty to use only Bell Mechanical to service their HVAC system for problems.
The lawsuit says Leslie Gulliken, D.R. Horton’s city manager of the west division of Louisiana, said in a recorded conversation that the building company follows federal building codes that may not be “designed for houses in south Louisiana.”
“We build to the federal mandate code, and we are regulated by federal law,” Gulliken said, according to the lawsuit. “We build in that code and that code was not designed for very humid markets.”
The Dixons and others have paid for inspections and repairs, lost home value, lost use and enjoyment of their home, paid more for electricity, experienced health problems and expenses and suffered inconvenience and mental anguish as a result of D.R. Horton’s and Bell Mechanical’s actions, the lawsuit says.
Attempts to reach a spokesperson at D.R. Horton’s Baton Rouge office and Bell Mechanical’s Baton Rouge office Friday were unsuccessful.
Beal is also representing homeowners in two similar cases currently working through the Lafayette Parish court system. In a Thursday phone interview, Beal said he realized the magnitude of the problem as his team worked on those cases.
“My firm started with the initial cases, and we worked things and continued to investigate and get deeper and deeper into the issues,” Beal said. “Once you get into suits this big, the burden becomes high. That’s why we wanted to file the class-action lawsuit.”
The Dixons, who have four children between the ages of 9 and 18, recently refinanced their $252,000 house in Youngsville’s Sugar Ridge neighborhood to take advantage of a lower interest rate. They have 14 years left on their mortgage.
Although the Dixons say they raised numerous concerns during the warranty period, they didn’t realize how severe the problems were until a few months ago when they had the home inspected for mold at the recommendation of neighbors with similarly designed homes.
“It turned out to be way worse than we imagined,” West Dixon said. “We’ve only been in the house for eight or nine years. It was just unfathomable that it could be this bad.”
Alicia Dixon, who works as a hospital nurse, attributes some health concerns to the home’s condition. She was diagnosed with fibromyalgia a few years ago and suffers from a host of symptoms ranging from brain fog and insomnia to anxiety and depression.
Her symptoms have become so debilitating at times that she’s had to miss work. She said her 16-year-old daughter, who is allergic to mold, has also undergone allergy shots and takes medication twice a day to alleviate her symptoms.
In addition to the Dixons, the attorneys say plaintiffs in the case include those who purchased a new home constructed and sold by D.R. Horton between Jan. 1, 2013, to present day who have experienced problems with mold or mildew growth and damage to their homes.
“We hope this gives people who were clueless kind of like us the courage to speak out,” West Dixon said.
“The reason why we’re doing this is because we don’t ever want anyone else to have to deal with the things we’ve dealt with,” Alicia Dixon added.
A few days before the Dixons’ suit was filed, another Lafayette Parish resident shared concerns about her D.R. Horton home currently under construction in a north Lafayette neighborhood.
Nureaka Ross said in a Facebook video that she witnessed workers nailing shingles directly onto plywood and using only a cardboard-like material instead of plywood behind a brick-and-mortar wall on the exterior of a home. She walked through the construction site with an independent contractor, who explained why those actions and others shown in the video would have negative consequences down the road, especially during a hurricane.
“It breaks my heart because I was excited to be in a new home,” Ross said. “And it’s not worth it, especially knowing the exterior wall is literally just cardboard. There’s holes everywhere, literally, in addition to the roof with shingles directly on the plywood.”
Ross said she plans to get out of her contract with the home builder and that she posted the video on Facebook so other home buyers would be aware of what to look for.
The video, which was recorded live on March 4, has been shared more than 5,000 times.
“I was one of those, thought I was getting a nice, brand new D.R. Horton home, newly built, and unfortunately, that is not the case,” Ross said. “I just have the privilege to see it being built and not be purchasing it later.”
Beal said homeowners in other Southern states have taken D.R. Horton to court over similar problems.
A lawsuit was recently filed in Alabama against D.R. Horton for “critical mistakes” in houses constructed in the Mobile area between 2015 and 2021 that have left homes at risk of “catastrophic failure.”
In 2016, a federal bankruptcy judge in Florida ruled that D.R. Horton engaged in deceptive practices that forced the bankruptcy of a homeowners association in Miami.
“This is something that affects hard-working, middle class Louisianans,” Beal said. “A house is one of the most important and expensive investments that any person makes, and when you see a commonality of issues, we had to do something.”
https://www.al.com/news/2022/03/lawsuit-claims-dr-horton-homes-cant-withstand-louisiana-humidity-alabama-case-cites-critical-mistakes.html?outputType=amp
PennyP1cker
7 years ago
Forestar Group Inc. has sold $232 million of homes and land to the East Coast investment firm that had tried to acquire the Austin real estate company in 2017.
In a Thursday securities filing, Forestar said it offloaded 20 community development projects to an affiliate of Starwood Capital Group and an affiliate of Land Strategies Management.
The 20 community development projects total about 750 home lots that are developed or under development as well 4,000-plus undeveloped lots, plus 730 acres and an ownership stake in a multifamily property in Katy, Texas.
Connecticut-based Starwood was in a bidding war last year for Forestar (NYSE: FOR), but lost out to Dallas-based D.R. Horton Inc., the nation's largest homebuilder. The $560 million D.R. Horton deal closed on Oct. 5; it now owns a majority stake in Forestar.
Also on Thursday, D.R. Horton (NYSE: DHI) reported that Forestar generated about $30.8 million in revenue between the close of the deal and the end of 2017. Income before taxes was $4 million.
In 2007 Forestar was spun out of the now-defunct Temple-Inland Co. to handle a variety of operations and investments related to land banking, land development, groundwater rights and leasing, minerals and natural resources management and the oil and gas business.
But its mission shifted drastically over the years, and it sold off its oil-and-gas and multifamily divisions. It now focuses on land development for real estate projects and is active in 11 states.
Daniel Bartok took over as Forestar CEO in December, replacing Phillip Weber.
Enterprising Investor
9 years ago
D.R. Horton Sees Jump in New-Home Deliveries (11/10/15)
Fort Worth home builder skirts labor shortage plaguing industry to post 23% gain in deliveries
By Kris Hudson
Home builder D.R. Horton Inc. sidestepped the labor shortages plaguing many of its peers, posting a 23% year-over-year gain in delivered homes for its fiscal fourth quarter ended Sept. 30.
D.R. Horton, the largest U.S. home builder by sales, contracted to sell 8,477 homes in the quarter, up 19% from the year-earlier period, and delivered 10,576. The Fort Worth, Texas-based builder notched a 0.6 percentage point increase in pretax profit margin to 10.7%, a sign that rising labor costs haven’t tripped it up.
“No question, labor is tight,” D.R. Horton CEO David Auld said Tuesday on a conference call with investors to discuss the quarterly results. “The reports coming out from other builders—we’re not immune to it. I think we may have mitigated it by having the best operating team in the industry. The relationships that our people have with vendors and suppliers put us at the front of the line.”
D.R. Horton’s experience is atypical. Big builders such as PulteGroup Inc. and MDC Holdings Inc. have reported declines in home deliveries in the third quarter as they scramble to find enough crews to complete construction of houses sold during this year’s busy spring selling season. Others, such as Meritage Homes Corp. , reined in their financial guidance due at least in part to construction delays caused by labor shortages.
Much of the U.S. home-building industry has struggled to cope this year as new-home sales gained momentum but the ranks of construction workers remained depleted from the downturn. The seasonally adjusted annual pace of construction starts on single-family homes in September of 740,000 marked a 72% gain from the market’s nadir in 2011. In comparison, employment in residential construction has increased by 25.5% to nearly 700,000 in October from the market’s trough in January 2011, Department of Labor data show.
“It’s clearly impacting our production,” Pulte CEO Richard Dugas said of labor shortages during the builder’s quarterly call with investors on Oct. 22. “In general, we’re having to pay more for labor.”
Builders, contractors and economists think that the construction industry has been slow to rebuild its workforce because pay isn’t high enough to lure people from other industries, tight immigration laws have limited one source of labor, and networks for training and recruitment have atrophied since the downturn. Some builders now are paying more to lure workers back from retail, hospitality and other indoor jobs. Those pay increases are expected to result in higher new-home prices.
D.R. Horton, however, said higher pay isn’t part of its solution yet. The builder notched a revenue gain of 4% a square foot of homes delivered in the fourth quarter from a year earlier while its costs for labor and materials, excluding land, increased by 3.5% in that span. Still, the builder anticipates that labor costs will be a limiting factor next year, contributing to its forecast that its margins will show minimal to no gains in 2016 from 2015.
D.R. Horton, which operates in 27 states, draws subcontractors partly because it produces a high volume of home sales, which in turn provides them steady, relatively predictable work. Mr. Auld added that the builder’s seasoned executives in many of its markets have long-standing relationships with subcontractors, which helps keep them on its sites.
Another factor in D.R. Horton’s favor: The builder relies more than many of its peers on sales of speculative homes, meaning those that go under construction without a buyer already lined up. That allows D.R. Horton a bit more leeway in spreading out its construction schedule rather than lumping much of the work toward the end of each year.
Still, analysts suspect the labor shortage eventually will trip up most, if not all, home builders.
“If there’s anyone who can manage through this, from a revenue standpoint, it’s probably them,” said Mike Dahl, an analyst with Credit Suisse AG, regarding D.R. Horton. “The question is really the implication for margins. Even if you are able to get these crews in, how much are you having to pay to get the work done? And is that going to eat into your gross margins?”
All told, D.R. Horton reported a 27% increase in sales for its fourth quarter to $3.1 billion. It posted a 44% gain in net income to $238.9 million.
Meanwhile, the builder gave an optimistic forecast for its 2016 fiscal year, predicting revenue of $12 billion to $12.5 billion, a gain of at least 11% from its fiscal 2015 revenue of $10.8 billion. It predicts delivering 39,500 to 41,500 homes, up at least 7.8% from 2015.
“We still think there are legs left in this (housing) cycle,” Mr. Auld said. “We’re not even close to what is historical demand.”
http://www.wsj.com/articles/d-r-horton-profit-jumps-as-do-new-home-orders-and-closings-1447156637
detearing
11 years ago
DHI, Q1, Operating Metrics Released 01/28 04:30 AM
--------------------------------------------------------------------------------
07:30 AM EST, 01/28/2014 (MT Newswires) -- Company Name: D R HORTON INC Quarter: FQ -2014 - Q1, 2013-12
Operating Metric
---------------------------------------------------------------------------
Gross profit / (loss)-Homebuilding-Home
--- Actual: 364.1, Est: 310.6, Surprise (vs. consensus): 17.24%
Gross profit / (loss)-Homebuilding-Land/lot
--- Actual: 0.5, Est: 1.0, Surprise (vs. consensus): -50.00%
Homes Closed
--- Actual: 6188.0, Est: 5374.1, Surprise (vs. consensus): 15.14%
Net sales order-Homes sold
--- Actual: 5454.0, Est: 5234.9, Surprise (vs. consensus): 4.19%
Sales order backlog-Homes in backlog
--- Actual: 7684.0, Est: 8065.3, Surprise (vs. consensus): -4.73%
--------------------------------------------------------------------------------
Get more news on:SYMBOLS: DHI NEWS TYPE: Company News, Earnings News, Earnings Release, Extended Trading, Pre-Market Movers SECTORS: Consumer Discretionary, Household Durables, Industrials, Construction and Engineering
detearing
11 years ago
DHI, Q1, Operating Metrics Released 01/28 04:30 AM
--------------------------------------------------------------------------------
07:30 AM EST, 01/28/2014 (MT Newswires) -- Company Name: D R HORTON INC Quarter: FQ -2014 - Q1, 2013-12
Operating Metric
---------------------------------------------------------------------------
Gross profit / (loss)-Homebuilding-Home
--- Actual: 364.1, Est: 310.6, Surprise (vs. consensus): 17.24%
Gross profit / (loss)-Homebuilding-Land/lot
--- Actual: 0.5, Est: 1.0, Surprise (vs. consensus): -50.00%
Homes Closed
--- Actual: 6188.0, Est: 5374.1, Surprise (vs. consensus): 15.14%
Net sales order-Homes sold
--- Actual: 5454.0, Est: 5234.9, Surprise (vs. consensus): 4.19%
Sales order backlog-Homes in backlog
--- Actual: 7684.0, Est: 8065.3, Surprise (vs. consensus): -4.73%
--------------------------------------------------------------------------------
Get more news on:SYMBOLS: DHI NEWS TYPE: Company News, Earnings News, Earnings Release, Extended Trading, Pre-Market Movers SECTORS: Consumer Discretionary, Household Durables, Industrials, Construction and Engineering
MiamiGent
12 years ago
DHI D.R. Horton's Profit Jumps
Wall Street Journal
November 12, 2012, 1:13 p.m. ET.
By ROBBIE WHELAN
http://stockcharts.com/h-sc/ui?s=DHI
D.R. Horton Inc., DHI -5.44%the largest U.S. home builder by annual closings, reported its most profitable year since 2006, capped by a sharp rise in fiscal-fourth-quarter profit on strong revenue.
An improving housing market has triggered the biggest rally in home-builder stocks in years, sending Horton's shares up about 63% this year. The Fort Worth, Texas, company has long been a favorite with industry analysts because its management team avoids risk and it constructs low-priced homes that are accessible to many buyers.
D.R. Horton said about 49% of what it builds are speculative homes, which are typically sold to first-time buyers, but that percentage could shrink going forward, as the company focuses on build-to-order and move-up homes for retirees and growing families.
"Unless we have some sort of macro situation with the U.S. economy, we feel comfortable that we'll have a much better 2013 than we did 2012," said Donald Tomnitz, D.R. Horton's chief executive, in a conference call with analysts Monday.
For the quarter ended Sept. 30, D.R. Horton reported a profit of $100.1 million, or 30 cents a share, compared with a year-ago profit of $35.7 million, or 11 cents a share.
Home-building revenue jumped 21% to $1.3 billion. Closings increased 12% to 5,575 from a year earlier, while orders rose 24% to 5,276 homes. The cancellation rate was 27%, compared with a reported 29% a year ago. The company's average sales price for the quarter was $231,100, or 7% higher than the previous-year quarter.
Chairman Donald R. Horton said Monday that the company has continued to see strong sales demand through October and into November. The sales order backlog of homes under contract, at the end of the fiscal year, was up 49% to 7,240 homes, which Mr. Horton described as "our highest year-end backlog since fiscal 2007."
Beazer Homes USA Inc. BZH -18.15%on Monday also posted strong revenue gains, but its fiscal-fourth-quarter loss widened as the home builder recorded a large debt-extinguishment loss.
The nation's ninth-largest builder has struggled to achieve profitability since the housing downturn, reporting a string of losses in recent quarters while many of its competitors have begun to capitalize on the nascent housing recovery.
The builder has yet to fully recover from previous corporate missteps, including a federal probe into lending practices and a settlement with the Securities and Exchange Commission over accounting issues that helped force out longtime Chief Executive Ian McCarthy in 2011.
In spite of these troubles, sales and orders have picked up as consumers take advantage of the record-low interest rates that have made buying a home cheaper than renting in many markets.
"Operationally, we generated significant growth in orders, closings and backlog, while seeing improving trends in gross margins," CEO Allan Merrill said Monday. "From a balance sheet perspective, we added liquidity, improved our book value, extended debt maturities and reduced interest expense."
For the quarter ended Sept. 30, Beazer posted a loss of $66.2 million, or $2.82 a share, compared with a year-ago loss of $43.2 million, or $2.91 a share. Revenue rose 11% to $370.9 million as home construction and land sales climbed.
Home-building gross margin, excluding impairments and abandonments, widened to 11.8% from 9.9% in the prior year. The builder's cancellation rate was down at 31.1% from 34.2%. Total home closings were up 17% to 1,608. New orders rose 10% to 1,110 homes, a rate that is slower than many of the home builder's peers. Total backlog units rose 31% from the year-ago quarter
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