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Anthem Compendium, 23 December 2006


Good morning:

Patrick Aulds, South Division President for Pulte Homes/Del Webb Las Vega made the following statement in an interview with Favil West on the President's report. I suggest you view the full interview on the President's report showing on Ch. 99 beginning Monday December 25, 2006.

The Board of Directors is hosting 2 meetings in January on solely for the purpose of providing SCA residents with as much information as possible on this important issue.

  1. The first meeting will be held
    January 4, 2007, 3:00 p.m. in Hanneman Hall.
  2. The second meeting will be held
    January 7, 2007, 6:00 p.m. in Hanneman Hall.

Senior representatives of Pulte/Del Webb as well as the Associations lawyers will be there to answer questions. If you have questions you would like answered, please submit them as soon as possible using the form on the SCA website. (see the instructions following the transcript) Our expectation is that at the conclusion of the meetings you will be able to make an informed decision regarding this issue.

Favil West
President, SCACAI

Ch 99 Statement
Kitec Issue – settlement offer
Final edits - 12-19-06 (2)

Hello. My name is Patrick Aulds and I am South Division President for Pulte Homes/Del Webb Las Vegas.

I’d like to give our Sun City Anthem homeowners an update regarding the possible defect related to Kitec brass plumbing fittings that many of you have been hearing and reading about in recent weeks.

Kitec is a brand name for a plumbing system manufactured by the Ipex company. The Kitec brass fittings in question connect a home’s pipes to the fixtures.

Due to the unique quality of water in the area, chemical reactions may occur that cause these brass fittings to clog over time. In recent months, some homeowners in Sun City Anthem have reported decreased water flow in their homes, believed to have resulted from corrosion of Kitec brass fittings. To date, corrosion of Kitec fittings has not been found to have caused leaks or any problems other than reduced water flow in any homes in Sun City Anthem.

We first communicated with approximately 3,000 Sun City Anthem homeowners in October whose homes were identified as possibly containing Kitec brass plumbing fittings, based on the dates their homes were built and the types of materials used. We are confident that we have accurately identified those homes that were constructed with Kitec plumbing systems. If you did not receive a notice from Del Webb in October, we do not believe that your home contains Kitec brass plumbing fittings. However, if it is later discovered that you have Kitec brass plumbing fittings in your home, you will still have the ability to notify Pulte to address the fittings.

These particular Kitec brass fittings were used not only at Sun City Anthem, but at communities built by other homebuilders throughout the Las Vegas area. A group of homeowners in Southern Nevada, including the owners of one home in Sun City Anthem, have filed a class action lawsuit against Ipex – the manufacturer of the fittings. It is important to note that Pulte/Del Webb is not named as a defendant in that class action and is not directly involved in that case. The lawsuit contends that homes with Kitec plumbing are experiencing problems allegedly caused by the brass fittings.

The attorneys who filed the class action case also presented Pulte/Del Webb with written notice of the alleged defective fittings. Such a notice is called a Chapter 40 Notice, in reference to Nevada’s construction defect law. The notice received by our company alleges that the problem with Kitec brass fittings is common throughout certain parts of Sun City Anthem. . By sending a Chapter 40 notice to Pulte/Del Webb, the plaintiffs’’ attorneys set into motion a complex legal process – with a number of very short deadlines – giving Pulte the opportunity to inspect the homes and offer a remedy to the alleged defect.

Following the specific legal requirements established by Nevada Chapter 40, Pulte Homes sent written notice of the Chapter 40 claim via certified mail to approximately 3,000 Sun City Anthem homeowners in October. Again, Sun City Anthem homeowners whose homes were determined NOT to have these Kitec plumbing fittings are not affected by these allegations and would not have received the certified letter from Pulte Homes in October.

Per Chapter 40 stipulations, homeowners who received a certified letter from Pulte were legally given 30 days to respond to Pulte Homes with the request of an inspection of their home’s plumbing system. Only through inspection can we determine if a potential defect exists, how many homeowners may be affected, and how best to address the issue.

Of the 3,000 who received the certified letter in October, approximately 2,400 homeowners subsequently requested an inspection from Pulte Homes. Due to the large number of responses, we have not yet inspected all 2,400 homes.

Please be aware that there are local companies – not associated with Pulte Homes or Del Webb – that are currently approaching our homeowners and claim to be working with Pulte to inspect your home. One of these firms, called Construction Design Specialists or “CDS,” claims to offer “FREE Home inspections” to assess whether your home contains the Kitec fittings. However, it is important to know that only ONE company is authorized to inspect homes during this process on Pulte Homes’ behalf. The name of the Pulte Homes authorized inspection company is Southwest Consulting Group. The inspections that Southwest Consulting Group is conducting on behalf of Pulte Homes are always scheduled in advance by phone. Southwest will not show up at your house for an inspection unless it has been pre-scheduled with you.

If you are contacted for an inspection by someone other than Southwest Consulting Group, please be aware that they are NOT working with or for Pulte Homes or Del Webb  – they are likely working in conjunction with outside law firms hoping to drum up additional business. The inspection paperwork they may ask you to fill out could have legal ramifications that would prevent Pulte Homes from working directly with you to address issues with your home. We strongly recommend that you do not allow unauthorized inspectors into your home, and be wary that many are currently approaching our residents to further complicate the situation that Pulte Homes is dedicated to working with homeowners to rectify.

We’ve also had some questions from homeowners who say that they have a Kitec brand sticker located inside the door of their utility box, and that they’ve heard that this sticker will confirm whether or not a home contains Kitec fittings. However, this is not necessarily certain. The sticker is applied during construction to alert electricians that the home has nonmetallic water piping that cannot be used to ground electric circuits. While the sticker may have the “Kitec” logo on it, there are some instances in which plumbing contractors post a sticker with any brand name on it – as long as the message about grounding is clear. So in some cases, a “Kitec” logo on the sticker in your utility box may not actually indicate that Kitec fittings were used in your home. Only an actual inspection will enable us to verify the presence of Kitec products in your home.

Pulte Homes has a legal obligation to the homeowners who requested an inspection per Chapter 40 law, and we must respond to all of these homeowners within 45 days of receiving their inspection request. On December 7, Pulte notified the group of homeowners whose inspection requests were among the first ones received that we would be offering monetary compensation in the amount of $7,800 to homeowners with Kitec brass fittings in their home.

The $7,800 amount reflects the estimated cost for replacing the existing plumbing system that includes Kitec brass fittings with an entirely new plumbing system that does not use Kitec brass plumbing fittings. We’ve worked closely with trusted contractors to determine the cost for the repair and the time needed to do it. According to our contractors, the plumbing system replacement work should require 8-10 hours to complete. After that work is complete, the local building department must inspect the new system. Once inspected, drywall and stucco contractors will repair the drywall and stucco and repaint as necessary. The total process, including necessary inspections and drywall work, would be completed over the course of three to four days. It will be necessary to shut off the home’s water supply during the first eight to ten hours while the re-plumbing work is being performed.

Pulte Homes also considered an alternative repair that would simply remove and replace the Kitec brass fittings with other fittings manufactured by Ipex. The estimated cost of this repair was $5,700. Pulte Homes chose to offer the higher compensation amount so that re-plumbing of the entire house could be done using non-Ipex parts.

The same monetary offer has been sent to all 2,400 homeowners who responded to Pulte’s original letter, indicating that they wanted an inspection of their plumbing system. Upon receiving the monetary offer, homeowners have 35 days to accept the terms of the offer.

It is NOT necessary to have your home inspected by Pulte Homes within 35 days; however, payment of the monetary offer WILL be contingent upon an inspection in the coming months, verifying that your home has Kitec brass plumbing fittings. Because of the large number of homeowners requesting an inspection, we cannot access 2,400 homes within the 35 day legal limit for accepting the offer. Homeowners who wish to accept the offer must still respond within 35 days, however, the monetary compensation will not be paid until an inspection can be scheduled and the presence of the Kitec brass fittings is confirmed. Once the presence of Kitec brass plumbing fittings is confirmed in the home, homeowners can move forward with repairs and will receive the $7,800 compensation.

In the offer letter sent to these 2,400 homeowners, there is contact information for two local contractors who are familiar with and willing to perform, the necessary plumbing and drywall work to repair the problem. If you accept the monetary offer, you will need to contact one of these contractors or another contractor of your choice, to schedule repairs at a time that’s convenient for you. We understand that a number of homeowners have already contacted contractors to schedule their plumbing replacement. Again, compensation payments cannot be processed until the home is inspected and the presence of Kitec brass plumbing fittings is confirmed.

Accepting the monetary offer also means Pulte Homes is released from further obligation or legal action regarding the Kitec plumbing system in that home. This monetary settlement is being offered in lieu of Pulte Homes performing the plumbing repairs in your home.

Some homeowners have also let us know that they received a letter from a law firm and a Notice of Class regarding the class action lawsuit involving Kitec brass plumbing fittings. As stated previously, I emphasize that Pulte Homes and Del Webb are not named in the lawsuit. This lawsuit was filed against only the manufacturer of the Kitec fittings – Ipex – and the plumbing contractors who initially installed the product throughout Southern Nevada. Pulte Homes and Del Webb have no additional information about the class action suit.

As mentioned earlier, homeowners have thirty-five days from the date of receipt to accept Pulte’s offer of $7,800 by returning the signed release form. Once we have obtained the release and have inspected the home to confirm the presence of Kitec brass fittings, we will process the request for compensation and issue payment. Because of the large number of inspections that have been requested, it may take several months for Pulte to complete the inspections and issue the checks. We anticipate that homeowners will receive their checks within 90 days after returning the signed release to us, or after verification that a home has Kitec plumbing, whichever is later.

If you received a notice from Pulte Homes/Del Webb concerning Kitec brass fittings, but did not return your request for inspection form, you may still request an inspection of your home to determine whether you have Kitec brass fittings. Please call Kelly Peterson with Koeller Nebeker at (702) 853-5500 to obtain a new “request for inspection” form. Once we receive your completed request for inspection form, you will be contacted to schedule your inspection. Again, Kelly Peterson can be reached at (702) 853-5500.

We know that there’s a lot of information circulating among our residents regarding this plumbing issue, and that many outside firms and individuals are trying to capitalize on our homeowners’ concerns. We are very grateful for your patience and willingness to work with us as we address this issue with our Sun City Anthem homeowners.