Naples-based Stock Development dealing with construction defects at Paseo in Fort Myers

By: Laura Layden

Tony Conte is tired of dealing with construction defects at his part-time home in Paseo.

While fixes have been made at his condominium, some projects have dragged out, leaving him frustrated.

Planks of wood reinforce his second-story balcony — and the manager of the Fort Myers community told him that it’s unsafe to use and not to walk on it, although Conte has to step on it to go in or out of his front door.

“We’ve had a dramatic spate of water intrusion issues, which were the first indications there was something wrong,” Conte said.

The developer, Naples-based Stock Development LLC, and its sister company Stock Construction, have filed multiple lawsuits and sued a laundry list of companies over the defects, from the architects to the roofers.

One of Stock’s lawsuits names more than 13 defendants, including RDL Architects Inc., based in Shaker Heights, Ohio, and Gulf Western Roofing & Sheet Metal in Bonita Springs. The claims in the suit range from negligence to breach of contract and from violations of the Florida building code to breach of warranty.

Stock seeks to enforce indemnification agreements with subcontractors to shift the losses it has suffered to the other companies, including its attorneys’ fees and costs involved in investigating and repairing the defects. The lawsuit doesn’t say how much Stock has spent.

In an answer to Stock’s complaint, Gulf Western denied any wrongdoing.

So did RDL Architects, which in turn argued Stock is “guilty of carelessness or negligence, which caused or contributed” to the problems at Paseo.

Stock has denied it’s at fault in court documents.

One estimate to fix the community’s problems, provided to the Paseo Condominium Association, topped $46 million. That estimate included replacing all stucco over framed areas, installing new windows, painting and sealing the affected buildings — as well as replacing all their roofs.

The estimate covered 123 buildings, with 763 homes. Turnover from the developer to the association happened in October 2014.

Stock taking issues ‘very seriously’

In an email, Claudine Leger-Wetzel, Stock Development’s vice president for sales and marketing, said her company is taking the issues “very seriously” and has committed “significant resources to resolve homeowner concerns.”

“Stock has been working diligently with the Paseo Condominium Association and construction industry experts, including engineers, to address these matters in a responsible, efficient manner. This process is very thorough and time-consuming, although considerable progress has been made,” she said.

The company, she said, understands that “individual homeowner experiences are unique and, at times, have been frustrating.”

“Stock will continue to collaborate with Paseo and our respective experts to devote the resources needed as we work through the corrective solutions that will provide long-term homeowner satisfaction,” Leger-Wetzel said.

Stock has been doing business in Southwest Florida for more than 17 years. In that time, it has been honored with more than 500 awards for its outstanding communities, product design, amenities, marketing and overall quality, according to its website. Thedeveloper’s other communities include Lely Resort, Olde Cypress and Secoya Reserve. Its slogan is “When Quality Matters.”

Paseo sits on about 444 acres. It was designed to be luxurious, yet affordable, with prices starting at less than $200,000.

Construction at Paseo began in 2006, the year the housing bubble burst and ahead of the Great Recession. The Florida Home Builders Association recognized the development as the best master-planned community for 2006, 2007, 2008, 2009, 2010 and 2011.

There are 1,158 homes in the community, which includes flats, two-story and split-level town homes, casitas, villas and a collection of single-family residences, according to Paseo’s website.

The causes of the defects are unclear. The community was built in stages during the boom, bust and recovery of the housing market.

The problems could be a reflection of working too fast and not having the A team on every job, said Fort Myers attorney Kevin Jursinski, who is board-certified in real estate law, construction law and business litigation.

“I see people complaining every day,” he said. “There is just some bad work being done and it’s not intentional. Sometimes you have the same defects that are just repeated.”

In an email, Russell Hensel, who owns Fort Myers-based Comprehensive Building Consultants, said the real culprit of this “construction debacle we are in” is government inspectors who are “dropping the ball and actually causing more harm than good,” with “zero liability.”

“Who signs off on the certificate of occupancy? Not the builder, not the subcontractor, but the municipality. They are the ones saying the house is fit to occupy,” he said.

Defects not easy to see

Inspection reports done for the homeowners association at Paseo reveal defects that aren’t easily seen from the curb — from the way the walls of the multifamily buildings were stuccoed to how their roofs were constructed.

“It still looks nice. They’ve done a really great job of hiding the issues,” homeowner Conte said. “It’s deceiving.”

Inspection reports show stucco, for example, was thinly applied on some buildings and in some spots measures less than the ⅞ of an inch in thickness required by the building code. On some roofs, overhangs are missing, causing leaks in the walls.

“I just marvel at the scope of the issues here,” Conte said. “It’s considerable. Nearly everybody I’ve talked to have or had some issues.”

Issues at Conte’s home have included water leaking into the garage, which has been fixed. A few stains remain on a wall, but they’ve been painted over and aren’t so easy to spot, unless you’re looking for them.

Conte and other Paseo residents are concerned Stock is not focused enough on fixing the defects, as the company continues to build new homes and develop new projects —and to expand its presence in newer markets, such as Sarasota, Marco Island and Palm Beach.

Not every home or condo has defects in Paseo. At an older condo Conte bought in the community more than five years ago and now rents out, he said he’s not had a single issue.

Florida law requires homeowners to provide contractors, builders and others involved in the construction of a project with alleged defects an opportunity to resolve claims and fix the problems. The homeowners association has served a notice of claim to Stock, and they’re still in the throes of a complex resolution process, spelled out in Chapter 558 of Florida Statutes.

In an email, Stephanie Schaffer, the public information officer for the city of Fort Myers, said there weren’t any indications of defects when the buildings in Paseo received their certificates of occupancy.

Certificates of occupancy indicate compliance with building codes and other laws, and signal that buildings are in a livable condition.

The city is not required to inspect every inch of the project, Schaffer pointed out.

“Stucco is the responsibility of the contractor who installed it,” she said, for example.

The Paseo homeowners association hired a structural engineer, who did a damage assessment and then provided a list of repairs to a contractor to do the corrective work, Schaffer said.

For some, problems are worse

Some homeowners at Paseo have faced more problems than others.

The Contes’ friends and neighbors Morgan Stier and husband Aaron Rodriguez, who own the same kind of condo a few blocks away, can’t use their front door because contractors are rebuilding their front-facing balcony.

Recently, Rodriguez stood in his garage, waiting for a delivery from UPS, fearing the driver wouldn’t know where to leave the package because there’s no way to get to his front door.

The condo, with one end covered in house-wrap and scaffolding running up the side, has become a test case for how to reconstruct the other balconies in the community that are rotting out from water damage, Stier said.

Construction on Stier’s balcony began in April 2018, he said, and carried on for a few months until the city issued a stop work order because a permit wasn’t pulled.

After a four-month delay, the project resumed in October, with a permit and a new plan in hand for fixing the balcony, Stier said.

The fact that he’s become a “guinea pig,” Stier said, isn’t what upsets him most. It’s the time it is taking to fix the balcony. He said he’s lucky he doesn’t live in the condo year-round, or he’d be more upset.

Stier first reported the issues with his balcony to the homeowners association in July 2017 after noticing cracks forming in the decking.

“As time went by, water intruded into the cracks, compromising the balcony support columns and causing the decking to become soggy with rot,” he said.

“It’s been, like, when is this going to end? This is never going to end,” Stier added.

Engineers, he said, have visited his home countless times, so he’s confident the balcony will eventually get fixed the right way. However, he’s concerned about the possibility of other defects in the home.

Most recently, he learned his condominium is one of 10 with bump-outs on the backside that are supported by concrete beams, instead of steel beams. A temporary support system has been installed.

“My guess would be that the engineers are still working on plans for a permanent fix,” Stier said.

“I guess we have issues in the front and back,” he added. “We assume it’s all to code. But we shouldn’t be having these issues.”

Another neighbor, Melissa Locast, said she had more serious problems with water leaks in her condominium, which caused black mold to spread. First, she said, a worker with Stock’s warranty division tried to treat the problem with mold spray, but it didn’t work.

The problem only got worse, she said.

“It was terrible,” Locast said. “It was all over the place. Mold and rot. It was not good.”

It took three years to resolve the defects, she said, and work crews ultimately ripped out and replaced her walls and flooring.

Stock took action

Locast vividly recalls the time she arrived from out of town to find the walls in her two-bedroom condo exposed for repairs and rainwater leaking through the framing around the window and running down the wall and outside the unit toward the street. Once she shared video footage and photos of what she saw that day, Locast said Stock took notice and tackled the issues.

She said she’s happy with the fixes made through Stock.

“They put a lot of money into it,” Locast said. “As far I can tell, it’s fixed with no problems.”

However, she feels bad for her neighbors, who are still dealing with construction defects.

“I don’t want another human being to go through what I did,” Locast said.

As a widow, she felt vulnerable “fighting against the big guys,” she said, but she remained persistent.

“I almost had a nervous breakdown,” Locast said. “It was me against them.”

About Stock Development 

Established: 2001

Founded: By Wisconsin native Brian Stock, who serves as the company’s CEO, and his father, K.C. Stock, chairman. 

Built: More than 4,500 homes in communities throughout Southwest Florida, from Marco Island to Sarasota.

Communities: Lely Resort, where the developer got its start, and many more including Fiddler’s Creek, Quail West, Naples Reserve, The Isles at Collier Preserve, Esplanade Golf & Country Club of Naples on Marco Island, TwinEagles, Hidden Harbor, Esplanade at Lakewood Ranch and Country Club East.

Sales: Reported 231 new home sales worth nearly $250 million in 2017. 

Diversification: Since the Great Recession the company has greatly diversified, building apartments and commercial buildings, such as the Stock Plaza in East Naples.

Related companies: Stock Construction, Stock Financial, Noble Title & Trust, Serenity Pool & Spa, Pizzazz Interiors and others.

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