Attorney General negotiated settlement gives 5 Paugus Woods homeowners option to sell property back to the developer

LACONIA — As part of a negotiated settlement with the N.H. Attorney General, developer Brady Sullivan Properties has agreed to buy back the home of five families who purchased homes here in the Villas at Paugus Woods, LLC — if the owners want to sell.

The agreement, which was announced yesterday afternoon, was approved by Belknap County Superior Court on January 27, ending a legal battle that began in December of 2010 when a Sarasota Lane family reported some cracks in their modular home.

Told by Brady Sullivan the cracks were "cosmetic," they notified the state fire marshal and asked for an inspection. Fire Marshal Ken Walsh's affidavits were made public and said that the lag bolts that connect module "C" with the rest of the three-part modular home were not installed.

Walsh also noted that the foundations under the "C" module was not constructed in a way that would support it.

"Because of these failures," wrote former Attorney General Mike Delaney in his filing, "the C Module was physically moving away from the remainder of the house.

The separation of the "C" module was creating the drywall cracks that the family noticed and reported.

Other problems in some of the homes that were inspected were in ventilation and air handling systems as well as electrical issues.

All totaled, Walsh said he got eight complaints and contacted Brady Sullivan to see how the company was going to resolve the complaints.

The Villas at Paugus Woods is a multi-unit sub-division off White Oaks Road. Initially started by a different private developer, the entire subdivision was purchased by Brady Sullivan in 2009.

Brady Sullivan attorneys contended that the City of Laconia had inspected all of the homes and occupancy permits were issued.

On January 13, 2011, city officials, Walsh, and the Brady Sullivan project construction manager met with representatives of all of the subcontractors with the exception of Excel Homes, whose attorneys said the company was in bankruptcy.

Brady Sullivan agreed to stop selling homes while a resolution was in the offing but later asked for and received an exemption for two buyers who had already given up their former homes.

AG Delaney brought suit against Brady Sullivan after learning that an independent inspector had identified 20 code violations that still existed.

The agreement between the state and Brady Sullivan also states that at the attorney generals request, an independent engineer was engaged to inspect every home in the sub-division and fix any defects identified and fix them at Brady Sullivan's expense.

Brady Sullivan must also pay $85,000 in administrative costs and investigative costs to the State of New Hampshire.

Owners of the five homes offered buyouts couldn't not be reached for comment.