According to a brand new investigative report from KXAN in Austin, Dallas-based Bella Vita Custom Homes has declared bankruptcy. The builder, after failing to pay subcontractors and losing vast sums of client money, has permanently closed and remains a target in lawsuits.
Bella Vita was founded in Dallas in 2010, with its trademark white crest on a navy blue background popping up on lots all over Dallas and the Park Cities. But just after Tracey and Joel Lackovich selected Bella Vita to build their custom home in the gated community of Spanish Oaks just outside of Austin in Bee Cave, construction slowed and problems began to crop up. That was in 2015, and since then, the Lackovich family has dealt with one nightmare after another.
But what can be done to protect a homeowner from a less-than-honest builder? Not much, the story alleges.
First, let’s do some disambiguation. There are three major custom homebuilders in Dallas that use “bella” in their names. First, for expediency’s sake, there’s Bella Vita, which is now defunct. East Dallasites will recognize Bella Vista, which has quite a presence on this side of the city. And then there’s the cream that rises to the top — Bella Custom Homes — which does extremely high-end construction on bespoke luxury properties. (Full disclosure: Bella Custom Homes is a CandysDirt.com Approved Builder and has a long track record of outstanding work and trustworthiness from some of the most discerning clients in North Texas and beyond.)
So, Bella Vita is going belly up, leaving some custom home buyers, including the Lackovich family, in a lurch with either no completed home or a whole lot of bills for work that was never completed and subcontractors that were never paid. The company officially filed for bankruptcy in December of 2016. Bella Vita founders Mike and Andy Clem were forced to speak at a civil hearing, KXAN’s report says. Their reasons for declaring bankruptcy?
When addressing creditors, CEO Andy Clem said the overhead costs were too great. “The project managers, the interior designers, [and] the architects we employed, their expenses were too high and they spread across all the jobs. So, they started going negative,” said Clem. “On top of that, we had a severe period of price increases from our subs [subcontractors]. So a lot of our jobs were way over budget.”
U.S. Trustee Robert Yaquinto said total liabilities for the company are listed at more than $9 million. Prior to the filing, Andy and Mike Clem paid themselves a salary. During January’s bankruptcy meeting, Andy Clem said he was paid $132,000 annually and Mike Clem, was paid $120,000. Also during the meeting, Andy Clem said that around the time the company filed for bankruptcy, he began doing contract work in the Dallas area with concrete and construction consultation sales.
More than $9 million in liabilities with some clients under contract for homes priced at $1 million? Something’s not right here.
But for those homeowners left paying for things two or three times after checks bounce and vendors threatening to sue — the Lackovich family effectively paid for their custom door three times! — what can they do to seek justice?
“To have wasted three years of my life, and be in the hole that we’re in and try to climb out, I think after today, we realized that our system is broken. The homeowners are not protected,” said Tracey.
In 2003, Texas state lawmakers created the Residential Construction Commission to oversee the homebuilding industry. But, the agency was dissolved shortly after it started. In a final review of the commission, it was decided that the then-regulation of the residential construction industry was “fundamentally flawed and [did] more harm than good.”
In addition, according to the report,
“The Texas Residential Construction Commission was never meant to be a true regulatory agency with a clear mission of protecting the public. It has elements of a regulatory agency in its registration of homebuilders, but this program is not designed to ensure that only qualified persons can enter the field – the way true regulatory agencies work – and so does not work to prevent problems from occurring.”
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