MILFORD — In November, Caitlin and Brian Depelteau sold their house in Colorado to move to a home under construction in Milford’s West Shores subdivision, on the southeast side of town.
But six months later, the military family with four kids will be bouncing between nightly rentals and relatives in Maryland, as they can’t move into their new home and the lease on their short-term rental is up.
“We’re kind of just waiting right now, with no end date in sight,” Ms. Depelteau said of the situation last week.
By Tuesday, the family had all but given up on moving in.
“We sent in a letter canceling our contract, and due to the situation, (the homebuilder) refunded our earnest money,” Ms. Depelteau said of D.R. Horton, West Shores’ building contractor. “We have decided to move on to a preexisting home.”
The reason the Depelteaus and at least nine other households haven’t been able to move into their homes has to do with the subdivision’s faulty retention ponds, which are built to handle floodwaters.
“They’re dry ponds, meaning they should be dry within a 48-hour period. Right now, you can go fishing in them,” Mr. Depelteau said.
“The neighborhood is continuing to flood, and it’s also flooding nearby neighborhoods,” Ms. Depelteau added.
A statement from Sussex Conservation District program manager Jessica Watson sent to West Shores residents confirmed this last week.
“We have heard from many of your neighbors this winter concerned with flooded streets and water in their backyards,” the statement said.
The issue was on Milford City Council’s radar Monday night, as well.
“I’ve gotten inquiries from two people in West Shores concerning the situation with the ponds and the inability to move in or to correct the problem over there,” said Councilman Mike Boyle of the 1st Ward, where the subdivision is located.
“There is an item in executive session, and I would prefer that we discuss anything there,” said City Solicitor David Rutt.
But when the executive session concluded Monday, there were no new public developments.
Builders and developers
David Baird, SCD’s district coordinator, said the flooding impacts between and 10 and 15 homes in the subdivision and the roadways, which were constructed properly to his knowledge. He said it’s still not clear exactly what the issue is, but he does have some theories.
“It could be a whole host of things,” Mr. Baird said. “It could be the way it’s constructed. It could be that the groundwater levels are extremely high right now.”
He said the ponds are designed to absorb stormwater into the ground, but that they aren’t doing that at the rate they were expected to.
“That’s something for the developer to determine, why it isn’t functioning per its design,” Mr. Baird said. “It would be very premature to say, ‘This is what the problem is,’ but the developer needs to investigate that.”
In the case of West Shores, the developer subdivided the land and prepared it for construction, while D.R. Horton, a nationwide homebuilding company, purchased individual lots on which to build.
Ms. Watson’s statement identifies William Luther and his company, RB Holdings, as the developer. Mr. Luther could not be reached for comment on this story. SCD has had a hard time getting in touch with him, as well.
“We reached out to the developer. We reached out to the city and tried to get all on the same page and have a coordinated effort,” Mr. Baird said.
“I believe there has been some correspondence, but it has been limited,” he said. “We really haven’t gotten much of a response.”
Ms. Watson’s statement said Mr. Luther had tried to fix the problem but was unsuccessful.
“The developer, under the guidance of a geotechnical engineer, has attempted to revitalize the infiltration; however, they have been unsuccessful to date,” the letter said.
D.R. Horton agreed that the developer, not the builder, is responsible for dealing with this issue.
“These issues are the sole responsibility of the developer, as we have no authority to work on land, such as the open spaces and ponds, that we do not own,” said Brian McManus, an operations manager with D.R. Horton.
Certificates of occupancy and bonds
The developer’s noncompliance has left residents, the conversation district and the city with few options when it comes to forcing him to fix his work.
Therefore, SCD is coordinating with the city of Milford to hold certificates of occupancy for the final handful of homes completed in the subdivision.
It’s a move meant to bring Mr. Luther to the table, but it’s also one that comes at the expense of the Depelteaus and other new homeowners in West Shores.
“The only way to really force (the developer’s) hand was to hold the certificates of occupancy for nine houses,” Ms. Depelteau said. “They are the final nine houses that are supposed to be closing right now. All nine families are unable to close on their homes.”
Therefore, she said, “until the retention ponds are working properly, we don’t get to live there.”
As it turns out, they will never get to live there, since the family canceled its contract.
Mr. Baird said there are two ways SCD and the city can go about funding a fix for the retention ponds.
“Option one might be using the city’s bond on top of the district’s bond,” he said. “Option two would be adding some additional financial guarantee in the form of a bond on top of what was already issued to the district.”
The city and SCD both received performance bonds from the developer, which would be returned to him if the project was completed correctly.
“We’ve talked to the city about his being able to use the city’s performance bond on top of the bond that the district received,” Mr. Baird said. “It wouldn’t cost the developer any more money, per se, in posting this guarantee.”
The two bonds, he said, would likely cover the cost of fixing the retention ponds.
“Using the city’s bond would be the preference because everything’s already in place, and it wouldn’t cost anyone any more money,” Mr. Baird said. “That way, if there are additional improvements or corrections that need to be made, the developer would actually be able to use those dollars on making the repair versus having to spend money posting a cash bond as a guarantee the work is going to be done.”
But the second option is the one outlined in Ms. Watson’s statement.
“The District is currently holding a financial guarantee — (a) bond — for the development to ensure implementation of the approved sediment and stormwater plan,” it said. “That bond will not cover additional costs beyond the original plan, therefore, we felt that an increase would guarantee implementation if needed.”
The statement said that “once the District receives the increased bond amount, we will request that the City of Milford release the certificates of occupancy.”
Mr. Baird said this strategy was the one SCD was going with at the time of the statement but that, since then, they’ve switched to the other approach.
He said SCD will “continue to look at any option that’s out there. If somebody has another alternative, we’re willing to sit down and listen to it.”
He said situations like this are not common.
“The conservation district has been requiring bonds on projects for the last seven or eight years, and we have not had to collect on one that entire time, and we don’t want to on this one,” Mr. Baird said.
Earlier this month, there was some confusion about what would happen if the developer continued to not step up and the residents move forward with taking over the homeowners association. D.R. Horton is holding a meeting May 5 to discuss turning over the HOA.
“Should this issue not be addressed now, it could fall on the responsibility of the homeowners to make the repairs as stormwater facilities become the responsibility of the community once a project is fully constructed,” Ms. Watson said in her statement.
But earlier this month, a user on NextDoor who said she was both an employee of D.R. Horton and a West Shores resident made a post claiming that her neighbors should not fear forming an HOA and that doing so would not let the developer off the hook.
Mr. McManus said he could not confirm if this user was actually an employee of the company.
But Mr. Baird was able to confirm that this poster was, in fact, correct. Merely forming the HOA would not be a step toward letting Mr. Luther or RB Holdings off the hook for the stormwater retention ponds.
“Usually what happens, and I’m speaking very generically here, is that when a property is developed, there are certain covenants with that. One of those establishes the HOA,” Mr. Baird said. “There’s usually a clause in the contract somewhere that says once the improvements reach a certain level of completion, … those improvements are turned over to the HOA and it becomes their formal responsibility.”
But an HOA wouldn’t just blindly agree to this transfer.
“What you find is a lot of those HOAs want to have some sort of assurance that, when that is transferred to them, it’s actually working the way it’s supposed to be,” Mr. Baird said.
If the infrastructure isn’t up to the HOA’s standards, they don’t have to take responsibility for it. In addition to getting approval from the conservation district for their stormwater plans, developers need to get a notice of intent permit through the federal Environmental Protection Agency’s National Pollutant Discharge Elimination System.
“That’s a federal permit that’s administered by the state that basically says, ‘OK, Mr. Developer, you’re responsible for these environmental conditions during construction,’” Mr. Baird said.
“As long as construction is going on, that NOI permit has to be in place.”
The HOA doesn’t have to agree to take responsibility for that.
“Unless you agree to put your name on the NOI permit and the stormwater permit that was issued by the conservation district, the developer is going to still be responsible,” Mr. Baird said. “The HOA is going to have to agree to accept all the responsibilities associated with it before the transfer.”
The whole situation was too much for the Depelteaus, so they gave up on West Shores and pursued moving into an existing home in the area.
When the family sold their house in Colorado back in the fall, they assumed they would be able to move into their new home in Milford on May 6.
“We just found out we have no expected close date whatsoever,” Ms. Depelteau said last week. “Instead of an expected close date, (a D.R. Horton representative) messaged me, saying ‘I’ll help you find a Realtor for another rental.’
“If they’re trying to get me into a rental home, they don’t expect this to be finished anytime soon,” she said.