Avalon CO Reaches Accord over Sanctions

AVALON – The state Department of Community Affairs (DCA) and the Borough of Avalon building inspector have reached an agreement in the matter concerning violations of the Uniform Construction Code, essentially settling the issue.
In addition, the borough is in the process of purchasing state-approved home warranties for homeowners who are not properly covered on their modular homes by Avalon Development Group, now out of business.
The Uniform Construction Code requires the builder to purchase a state-approved plan that covers major structural defects before a Certificate of Occupancy (CO) is issued.
Avalon Construction Official John Tracy was found to have issued COs for 12 homes not enrolled in a state-approved new home warranty plan, a violation of the state regulations. He was fined $600 and required to successfully retake and complete the Construction Official course in an order dated June 11, 2018, from the DCA.
About two months later, the borough hired special counsel to appeal the sanctions. Since then, the DCA officials said they were continuing to investigate Tracy.
In a settlement agreement Tracy signed Jan. 17, 2019, the state and he agreed that he would complete three continuing education seminars and pay a $600 fine by May 31.
A state DCA spokesperson said Tracy has completed the courses.
The case was settled prior to being sent to the Office of Administrative Law.
Once the fine is paid, the settlement agreement states “the matter will be concluded with no further proceedings to be held in this matter.” The state also agreed that it will “not seek to impose further penalty on Tracy on the ground that he improperly issued certificates of occupancy” to homes in Avalon that were not properly enrolled in a state-approved new home warranty prior to the date of the settlement.
Under the borough’s Indemnification Ordinance, the borough is required to provide Tracy with legal representation and to pay any sanctions ultimately imposed on him.
In the meantime, the borough has been trying to resolve the home warranty issues for four homeowners by purchasing the warranties from the state since the builder is out of business.
According to James Waldron, Avalon’s assistant business administrator, he was directed by the mayor to start the process to purchase the warranties, which the DCA approved in November. Since then, Waldron said he has “encountered nothing but frustration from (the) DCA.”
He said only three of the four homeowners without warranties have expressed an interest in getting a state warranty. The warranties, when issued, are retroactive to the date when the COs were issued by the borough’s construction official, 2011-2012.
The state-sanctioned warranties cover major structural defects and are paid for by the builder. The cost is based on a formula that includes the total contract price. In the event of a problem, homeowners have access to the warranty procedures under the state plan or state-approved private warranty plans.
“The plan to pay for such warranties was initiated by the borough at the direction of the mayor and the borough was not directed to do so by DCA,” Waldron said. “This was voluntary on the part of the borough.”
Waldron said the three warranties are estimated to cost $6,000-7,000. He also said the borough intends to lodge a fraud case against the builder to recover costs for the warranties and attorney fees.
Waldron’s frustration with the state is due to DCA’s requirement of the homeowners “to produce contracts, notarized letters, and other documentation pertaining to the purchase, which many of the homeowners no longer have.
“To resolve the issue, the borough then requested DCA to accept other documentation based on official business records maintained by the borough Construction Office, which shows the contractor’s estimates as to the construction costs, which the borough has suggested is the best available evidence at this time,” he continued. “The borough has been ignored in its efforts to bring this to a conclusion on behalf of the homeowners.”
Waldron said he asked the borough’s special counsel Feb. 6 to “appeal to the Commissioner of DCA to obtain relief for Avalon’s homeowners and to inform the Commissioner of the laxity and lack of responsiveness of certain DCA employees.”
To contact Karen Knight, email kknight@cmcherald.com.