Publisher’s Note: A few months ago, two of the most well-known, highly promoted home builders in North Texas filed for bankruptcy, leaving scads of consumers who thought they were building custom-built homes loaded with liens and unpaid subcontractor bills. These were builders who advertised everywhere, won accolades for being the “best” in their business, and filled street after street from Park Cities to North Dallas with shiny new $2 to $3 million mansions.
If this had happened in 2007, when the lending market dried up and home prices plummeted, it may have been swept up as a sign of the times. But our housing market is the healthiest it has ever been. Home prices are rising, and inventory is low. How in the world could two luxury home builders blow it in this market? Bethany Erickson has been researching Bella Vita Custom Homes and other builders in a months-long investigation that uncovered more than 20 victims in the Dallas-Fort Worth area alone. Instead of getting their dream custom-built home, these buyers got a nightmare.
“Your baby’s heart problem ain’t my problem,” the voice on the other end of the phone told Sue. The turn that conversation, which the new mother said happened after months of pleading with the builders of her home to fix major issues with the new abode, took her aback. The voice on the other end, she says, was Tracey Clem, who belongs to the family that owns Bella Vita Custom Homes.
When Sue and her husband, Pete (their names have been changed for privacy reasons) found out they were expecting their first child, they wanted to find that perfect home in that perfect neighborhood — just like many expectant parents. And when they found a big home built by the popular builder, they began picturing the day they would bring their daughter home to it.
But even before they closed, they knew the house needed a bit more work. “I was pregnant when we looked at the house in January 2015,” Sue said. “We put a contract on the house unfinished.”
Sue, who has a background in infection control, and her husband knew that their unborn child was going to be facing some health issues at birth — a congenital heart defect meant she would be born without a pulmonary valve. Their child would be in and out of the hospital for surgeries throughout the first year of her life.
The things they saw that needed to be completed or fixed, she said, would be important for their child’s health.
“Everything was like pulling teeth,” Sue said. “And I had a loan at 3.7 percent — and the deadline on that loan was coming up. I was six months pregnant. The house wasn’t ready.”
Throughout the experience, Sue and her husband dealt with the Clem family — Andy Clem is listed as CEO of the company, and his father Mike Clem and sister Tracey are listed as CFO and human resources administrator, respectively.
“First they said, ‘we’ll make it a punch list,’” Sue said of the incomplete projects. “That would allow us to move forward and close, with the understanding that they would continue to fix the issues.”
“We go to close, and made a seven-page punch list,” Sue said. The couple signed the paperwork around the end of May that year, and then she drove to the home to pick up the keys from a Bella Vita employee.
“Mike Clem calls my cell phone while I’m there — but I can’t make out what he’s saying because it was garbled. So he called his employee’s phone, and then tells me, ‘You owe me $15,000 — for the fence.’”
“If you don’t pay, I’m not giving you the keys,” she said he told her (a message to Mike Clem regarding his recollection of events did not receive a response by press time).
“I basically told him he was crazy,” Sue told us she recalled. “And then I pointed out that I had already closed on the house, so technically he was trespassing and I could call the police.”
“Then he starts screaming at me,” says Sue. “In the meantime, his employee hands me the keys.”
But that punch list began to collect dust after that encounter.
“Nothing went right,” she said. “The water faucet handles were coming off. Seven windows weren’t set right. We were having floods from roofing issues.”
“We paid them extra money to put a traffic coat on the floor — we had senior dogs, and a baby coming, and it seemed like a worthwhile investment,” said Sue. “It is chipping off – like nail polish.”
“Everything they touched was messed up,” Sue said. “The plumbing in one sink was backwards, even.”
Sue’s baby was born in September. They continued to try to work with Bella Vita and the Clem family to get the repairs on that punch list ticked off. “And then Tracey Clem gets involved,” she said. “And during this whole time, they’ve never said, ‘I’m sorry.’”
When Tracey Clem became involved, at first it seems as if the family’s requests might be honored.
“We knew we would need to relocate while they did some of these repairs – particularly the floors,” Sue said. “I suggested that we temporarily move into one of their empty homes, because with my daughter’s condition — and our very old dogs — it would be better if we could go someplace where I don’t have to kennel the dogs, and where I can hire a cleaning crew and air scrubbers to make sure the air is safe and the home is as sanitary as possible.”
“They stopped taking our phone calls,” she continued. Eventually, Tracey called her and said they were going to be able to begin the work — and that she had arranged for the family to go to a hotel.
“When I tried to explain how medically fragile my daughter was, and how a hotel wouldn’t work, she said — and I’ll never forget it — ‘Your baby’s heart problem ain’t my problem.’” (A Facebook message, text, and email to Tracey Clem regarding her recollection of the conversation was left unanswered.)
After the conversation, a rain brought a flood in their home — thanks to the roof issues — and required extensive cleanup. “We billed Bella Vita for the clean up (since the roof issues had remained unrepaired) because mold could actually kill our daughter,” Sue said.
When she found that friends were considering letting the Clems build their home, she invited them to hers.
“They pulled out of the contract with Bella Vita after seeing my home,” said Sue.
Then she got a phone call from Tracey — who screamed, ‘You’re a bitch’.”
“I feel like they were gaslighting me. They kept telling me they had hundreds of satisfied clients and I was the only one making a fuss,” Sue said. “But then I met another person, and another, and realized, ‘OK, this is everyone.’ I also realized that they were saying the same things to everyone else.”
Sue said she even pleaded parent to parent with Andy Clem, but was berated for bringing his children into the discussion.
“Then they sent me a release. You’d have to be nuts to sign this,” she said, adding that she was not nuts. The family is mulling over their options now, but know they’re limited since the company has declared bankruptcy.
But Sue and Pete aren’t the only ones who had issues with their brand new home.
“There Was No Money Left to Finish Our House”
Adam Norton was so incensed with the outcome of his experience with Bella Vita and the Clem family that he took to Houzz to leave a review warning other would-be clients away from the company.
“I was recommended to Bella Vita through my real estate agent, who happened to be a friend of Andy, the owner of Bella Vita,” Norton said. “So my wife and I met with Andy, they seemed like they knew what they were talking about, had some very nice model homes in the area, and their signs were up all over the neighborhood doing builds.”
“All I could find online was positive information about them, so we signed on, and the project ‘seemingly’ went smoothly for the longest time.”
“Our build started in early 2015, with estimated completion date of January 2016. During the build, work would be done, then they would send an email to us, and the bank, asking us to approve the draw request for the work that was done,” Norton continued. “Since the work was in fact done, we would approve the request.”
“The project went on like this until probably the last few months of construction,” Norton added.
But then things began to change.
“First of all, everything slowed significantly,” he said. “We started noticing nothing was happening for weeks at a time. We would question it, and then it would pick back up.”
“Then, we started noticing some really inferior work being done. When we would demand it be fixed, it would take a long time, and they would try to charge us for it, even though it was terrible workmanship,” said Norton of their custom-built home.
“When we would refuse (to pay) they would do it, but only after a lot of arguing. Also, different contractors started showing up than the ones that had been doing the work.”
And, familiar to other Bella Vita stories, the experience went downhill after that.
“And then one day, all the work came to a screeching halt,” Norton recalled. “After about two weeks went by, we asked our project manager what was up. After ignoring us for several days, he finally came by and told us that there was no money left to finish our house.”
“We asked how that was possible, we paid all the draw requests up to this point for the work that was done. He informed us that Bella Vita had started having financial issues, and that they were taking money from one project, to pay another, which is illegal to do.”
“That got them farther and farther behind until now they just can’t finish anyone’s home,” Norton said. “Right about this time, we also started getting inundated with mechanic’s lien filings. It turned out that even though we had paid for all the work that had been done, Bella Vita did not pay the subcontractors that actually did the work with that money.”
What the Nortons found out next:. “So, we find out there is over $140,000 of money owed to subcontractors on our house — that we had already paid to Bella Vita,” Norton said.
“Where did that money go?” Norton wondered. “We are still trying to find out, probably never will.”
Out so much money with no livable house to show for it, the Nortons reached back into their pocketbook. “We paid some contractors out of pocket to finish the house, which of course was the second time we had paid for that work,” Norton said, but added that their financial turmoil isn’t over.
“Now we still have over $50,000 in liens, that we are stuck with because Bella Vita is in bankruptcy. And we cannot convert to a regular mortgage from our construction loan because of the liens and the hole this has put us in.”
“We are in danger of the bank foreclosing on what was supposed to be our dream home, through no fault of our own,” he said, adding that the condition of their brand new home adds insult to injury.
“Not to mention the inferior work that was done. There are foundation issues already causing large cracks in the walls, in a brand new house. Wood siding already cracking, warping, and popping off.”
“We’ve had to have a lot of work redone, which should never have passed inspection, so not sure what kind of deals that had going to get that done,” Norton continued. “Basically if we don’t lose the home outright, we will end up paying about $200,000 more than it was supposed to cost, for a house that’s definitely not worth that amount.”
“Lies Upon Lies”
Greg and Jennifer Roslund tell an eerily similar story to the Norton’s and Sue’s — only they ended up facing a lawsuit. “My husband and I bought our land independently while looking for the perfect builder,” Jennifer said of the lot they found in University Park.
“In July 2014, we signed a contract with Bella Vita Custom Homes,” she continued. “Lies upon lies about the delays of our promised building timeline and finally our foundation was poured on April 29, 2015 — nine months after we gave them 10 percent down, which they requested to ‘get the ball rolling’ as quickly as possible.”
Turns out that ball was going to roll in an excruciatingly slow manner.
“Next started our painfully slow, agonizing building process with four different project managers,” Roslund said. “Then multiple subcontractors started complaining to us about not being paid. We were dishing out property taxes on our land and month to month rent in an Uptown high-rise trying to guess when our house would be completed.”
“Finally, the City of University Park deemed our house livable in the spring of 2016, yet the house wasn’t finished as promised in our contract,” she said. “Bella Vita never did a reconciliation with our funds. The bank released endless draws without the work being 100 percent. We moved our belongings into the garage on April 11, 2016, lived in a hotel and waited for the floors to be stained and sealed, etc.”
But then a bad situation for their custom-built home took an even worse turn in the form of lien notices.
“Then the lien intent notices started rolling in,” said Jennifer. “I called the subs and tallied nearly $60,000 in unpaid funds. Under the Texas Trust Fund Act, they misused the funds given by our bank by not paying the subcontractors before collecting revenue.”
But as bad as that was, the situation became even more of a nightmare when a subcontractor sued the Roslunds for a bill they had already paid.
“We were sued by the Pennington Concrete company, who should have been given the funds from our draw. We ended up settling out of court for $18,000 with Pennington Concrete. We also wrote a check for $7,000 to the fence company.”
“There’s no warranty on our property — even though it was included in our contract,” Roslund continued. “We paid almost $4,000 to repair the hardwood floors after a plumbing leak a few months after moving in — and it goes on and on of additional expenses.”
The Roslunds and their children are now in their home, but they can’t help but feel violated.
“The damage emotionally and financially feels endless,” she said. “Our story, in a nutshell, does not shed light on the totality of corruption by Bella Vita. The $9 million-plus they listed on their bankruptcy filing doesn’t include the all of the victims they still owe.”
It Looks “Like a Ponzi Scheme”
“Now, we find they did this to many people all over DFW, and down in Travis County,” Norton agrees. “A large group of us have found each other, and are going after the Clem’s as best we can. A lot of these people are even worse off than us. They put down very large deposits and then never got anything for it.”
“The paper trail we’ve all put together now actually looks like a Ponzi scheme,” he said. “So we are pursuing that at this point with the district attorneys and FBI to hopefully put the Clems away for a long, long time, which is exactly what they deserve.”
(Bethany Erickson has been researching Bella Vita Custom Homes and other builders in a months-long investigation that included uncovering at least 20 victims in the Dallas-Fort Worth area alone. In the course of writing this story, Erickson found several families that sued Bella Vita, and one of those filings is included below. This story is the first in an initial four-part installment of what will be an ongoing series. Tomorrow’s story will look at Bella Vita clients whose homes were left incomplete or never really started. Have a story to tell? Contact Bethany at firstname.lastname@example.org.)
Several families, subcontractors, and investors have sued Bella Vita Custom Homes. To read one such suit, click the following link: cashinfamilyOP.