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Condo Builders Ignored Problems, Attorney Says : Lawsuit: Trial opens with claims the units were built poorly to sell for a quick profit. Buyers seek $11.4 million.

August 15, 1995|JEANNETTE DeSANTIS | TIMES STAFF WRITER

Residents of a multimillion-dollar condo complex have lived with leaking roofs, exploding pipes and seeping walls because developers ignored warnings about shoddy construction and forged ahead to make a profit, an attorney said Monday in opening statements of a $11.4-million civil lawsuit in Los Angeles Superior Court.

"The complex was so ineptly put together, it would be comical if it weren't so serious," said Lee Barker, attorney for the Glen Valley Homeowners Assn., which is made up of condo owners from the Montrose Avenue complex in Glendale.

"A lion's share went to the profits, and a mouse's share went to construction," he said.

The case, filed more than five years ago, names 12 defendants, including Glendale City Councilman Larry Zarian, several contractors and a group of New York investors, and alleges that they knowingly sold the poorly built condos to make a quick profit. Zarian is also board chairman of the Metropolitan Transportation Authority.

Barker said the 95-unit complex cost $5.5 million to build, but Glendale investors sold the project for $11 million to New York investors, who in turn sold the units individually for a total of $13 million.

"Not one of those homes met fire safety, seismic or electrical codes," Barker said. "They are all firetraps."

Defense lawyers concede that the complex does have construction problems but said the plaintiffs' claims are exaggerated.

"Those buildings can be repaired for about $2 million or $3 million," said Joe Burrow, an attorney for Glen Mont Investments, a partnership made up of Zarian and Vahe and Haerik Hovsepian. "What they are claiming is exaggerated hype that won't be supported by the evidence."

The defense will present its opening statements today.

According to court documents, plaster peels from the walls inside the units because of leaking pipes. Outside, rainwater seeps under doors and into living rooms because walkways are incorrectly sloped.

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Walls are thin enough to clearly hear conversations, and residents fear that their small children will be injured by the falling plaster, court records claim.

Most homeowners at the complex are senior citizens or first-time buyers who paid between $110,000 and $190,000 for the units. Some had looked forward to moving from their "starter home" in a few years, residents said.

But the building is riddled with problems, they said, and many would have to take a huge financial loss to rid themselves of their units.

Construction of Glen Valley was completed in April, 1989. Homeowners filed suit in Glendale Superior Court in February, 1990, less than a year after the condos were put on the market.

According to court records, Zarian, a 12-year Glendale councilman, was a one-third investor in the project. He said his involvement in the project was limited to a $340,000 investment.

"I am just one person among many investors and subcontractors in this case," Zarian said Monday.

Zarian said he has collaborated with Vahe and Haerik Hovsepian on other real estate deals. Also named as a defendant is Varooj Hovsepian, son of Haerik, head of Sepian Construction Co., which built the condos.

Barker said Varooj Hovsepian was awarded the contract to build the condos barely five months after passing his general contractor's exam. His only previous experience with general contracting was on his father's Beverly Hills mansion.

"No one was really in charge of the project," Barker said, "no one who knew what they were doing."

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