Angry Las Vegas homeowners say their million-dollar luxury homes crumbling after 5 years — is it the builder's fault?

Fox 5 Vegas

Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.

Willie Barron thought he had found his dream home when he purchased a $1.3 million property overlooking Lake Las Vegas. Five years later, he’s dealing with tilting floors, splitting walls and the constant worry of falling as he navigates his own house.

“My house is tilting an inch and a half from the rear to the front … everything is unstable and uneven and I can’t afford to fall,” Barron told FOX5 Las Vegas. (1)

He’s among several Del Webb homeowners on a ridgeline in Lake Las Vegas who claim their luxury homes are “crumbling from below.” Attorney Norberto Cisneros, who has spent two decades representing families in construction-defect cases, describes this situation as “probably one of the worst cases I’ve ever seen.”

New homes falling apart

FOX5 cameras captured wide cracks in the dining room wall of one home that keep reappearing despite multiple repairs. In the kitchen, tiles are coming apart, and in the backyard, the patio has detached from the house, with fences splitting and retaining walls cracking. Many of the affected homes are finished in stucco, making the damage appear even more dramatic as fractures spread across exterior walls.

“This is a classic example of soils problems,” Cisneros explained. “They gutted out the community, took all the soils, and they have to re-compact it before they build the homes on top. They did not compact the soils properly here”.

Homeowners are concerned that the next earthquake or monsoon could spell disaster.

“If it’s large enough … this house will go down and affect the houses below us,” said resident John Penn.

Cisneros estimates that stabilizing each property could cost between $300,000 and $500,000. Under Nevada law, builders are required to respond within 90 days of receiving a construction-defect notice. However, Cisneros notes that this timeframe has passed without any repair plan as required by law. (2)

PulteGroup, the parent company of Del Webb, stated to FOX5: “We stand behind the quality of homes we deliver. We are actively engaged with homeowners in assessing their concerns and addressing warranty-related repairs.”

Not just a problem in Las Vegas

The issues in Lake Las Vegas are just a glimpse into a much larger problem affecting homeowners across the country. In places where the ground is unstable — or where finishes like stucco are improperly applied — rushed construction can turn the dream of owning a home into a financial nightmare.

Florida offers another cautionary tale — and it also involves PulteGroup. For years, the state has grappled with what local media calls the “billion-dollar stucco problem,” where poorly applied stucco led to cracking walls, leaks and hidden water damage. (3) FOX 13 Tampa Bay uncovered so many failures in new-build homes that the Florida attorney general launched an investigation. (4)

Story Continues

PulteGroup, the same builder behind the Lake Las Vegas development, has faced major legal consequences in Florida. In 2018, the company agreed to a $78.7 million judgment to resolve claims over stucco defects. It also reached a settlement with the Florida AG that required millions in restitution and repairs for homeowners. (5)

Texas brings a different but equally worrying challenge. The state’s clay soils expand when it rains and shrink in dry spells, tugging at foundations and warping walls. Researchers at Texas A&M warn that climate extremes are making the problem worse. (6)

In Houston, even homes rebuilt with public funds after Hurricane Harvey developed structural issues within just a few years. (7) And in 2023, lawmakers reduced the time homeowners have to pursue claims, cutting the statute of repose for many projects from ten years to just six. (8)

Then there’s California, which has some of the strongest consumer protections in the nation. The state’s “Right to Repair Act” requires builders to fix certain defects if homeowners follow strict notification timelines. (9)

But disputes can still drag on. A UC Berkeley Terner Center report found that rising litigation and insurance costs have slowed new condo development, illustrating how the fallout from construction defects can ripple far beyond the families directly impacted. (10)

What this means for your finances

For many families, their home represents the biggest investment they will ever make. But purchasing a new home doesn’t always guarantee peace of mind. Here are some ways to protect yourself:

Research the builder. Look for complaints, lawsuits or settlements before signing a contract. Hire an inspector — even for a new property. Issues like soil instability or poor stucco work can be concealed behind fresh finishes. Examine the soil. The USDA’s free Web Soil Survey can help you determine if your lot sits on expansive clay or in a flood-prone area. (11) Know your state’s defect laws. For example, Nevada builders must respond with a plan within 90 days; whereas in Texas, many owners have up to six years to act. Review your insurance policy. Many homeowners’ policies exclude earth movement or construction defects, meaning you may have to pay out of pocket or pursue legal action. (12)

The homeowners in Lake Las Vegas thought they were buying dream houses. Instead, they may be facing repair bills in the hundreds of thousands.

Wherever you live, the lesson is the same — don’t assume a brand-new home comes without risks.

Is a home a bad investment?

Owning a home has long been coveted as a pinnacle of the American dream. But the reality is changing. Not only has homeownership become increasingly unaffordable for the younger generation, but the hidden costs may have diminished its appeal.

Grant Cardone, a real estate mogul, echoes this sentiment. Despite having built a multi-million dollar empire — a significant portion of which comes from real estate investments — he considers home ownership to be “a terrible investment.”

“[A home] doesn’t cash flow. You don't get big tax write-offs because of it. You have no leverage. You're living in it. You're paying for it. You never own it,” Cardone said during a podcast interview with Sean Mike Kelly last year. (13)

“Even when the loan is paid, you don't own it, no, you still got to pay property taxes, still got to insure, still got to maintain it.”

These hidden costs of homeownership can average up to $21,000 a year, according to a report from BankRate. (14)

But you can still leverage the growth potential of the real estate sector without sinking your life savings into a house.

Own a slice of real estate without the hassles of homeownership

For instance, crowdfunding platforms like Arrived let you become a landlord with as little as $100 — without having to pay any hidden costs.

Backed by world-class investors like Jeff Bezos, you can buy shares of SEC-qualified investments in residential properties and vacation rentals across prime locations in the U.S. through Arrived.

The best part? Arrived handles every aspect of the investment life cycle — from finding suitable properties vetted for their appreciation and income potential to managing them and finding tenants.

And any rental income generated is distributed to you monthly, and any property appreciation is paid out as capital gains at the end of the investment hold period. This way, you can sit back and collect passive income while Arrived does all the legwork.

Become a landlord for corporate America

You can take it one step further by tapping into the $27 trillion U.S. commercial real estate market. (15)

Those with capital on hand can invest in grocery-anchored commercial properties with First National Realty Partners (FNRP) — without taking on the additional responsibilities of being a landlord. They allow accredited investors to diversify their portfolio through grocery-anchored commercial properties, without taking on the responsibilities of being a landlord.

FNRP employs a proprietary Dragnet Acquisition Model when selecting properties to acquire. Additionally, their team of experts assesses the value of a property through various strategies, including physically examining the property, conducting a tour of the neighborhood and local market, and engaging with the tenants currently in place.

FNRP leases its properties to national brands like Whole Foods, Kroger, and Walmart, which provide essential goods to their communities.

What’s more, FNRP signs triple net leases with its tenants, ensuring tenant costs do not cut into potential returns.

Getting started is easy. Simply answer a few questions — including how much you would like to invest — to start browsing their full list of available properties.

Tap into the multi-trillion-dollar home equity market

Despite horror stories like Barron’s, Americans have built substantial wealth through homeownership, but the $34.9 trillion U.S. home equity market has historically been reserved for large institutions — until now.

Homeshares allows accredited investors to gain direct exposure to a portfolio of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the hassles of buying, owning or managing property.

The fund focuses on homes with substantial equity, using Home Equity Agreements (HEAs) to let homeowners access liquidity without taking on debt or interest payments. This creates an attractive, low-maintenance investment vehicle for retirement savers, with a minimum investment of $25,000.

Homeshares diversifies across multiple real estate markets in the country — helping reduce overall risk. Plus, the fund is designed with a 45% downside protection, adding an extra layer of safety.

With risk-adjusted target returns of 14% to 17%, the U.S. Home Equity Fund offers investors access to America’s largest store of household wealth.

And for a limited time, Homeshares will provide Moneywise readers an exclusive 5% bonus for IRA investments.

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

[1]. FOX5 Las Vegas. “Lake Las Vegas homes crumbling due to soil issues, attorney says.”

[2]. Justia. “NV Rev Stat § 40.6472 (2024)”

[3]. WTSP Tampa Bay. “Florida’s billion-dollar stucco problem.”

[4]. FOX 13 Tampa Bay. “FOX 13 Investigates: Hidden defects in new construction homes and who’s to blame?”

[5]. Top Class Actions. “Florida Pulte Home Stucco Construction Defects Settlement.”

[6]. Texas A&M AgriLife Extension. “Investigation of Maintenance Base Repairs over Expansive Soils”

[7]. Houston Chronicle. “Houston rebuilt their homes after hurricanes hit. Now, they are watching them fall apart.”

[8]. Texas.gov “H.B. No. 2024”

[9]. Adams-Stirling. “SB 800 - Right to Repair Act.”

[10]. UC Berkeley Terner Center for Housing Innovation. “The Financial Impacts of Construction Defect Liability on Housing Development in California”

[11]. USDA. “Web Soil Survey.”

[12]. Policygenius. “Does homeowners insurance cover foundation problems?”

Digital Social Hour Podcast by Sean Kelly(13) Bankrate(14) Clarion Partners(15) ATTOM(16); (18) CNBC(17

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

View Comments