Home Builder Caught Illegally Cutting Corners

Attorney General Spitzer today settled a case with a Hudson Valley home contractor who tried to cut costs by installing septic systems that it knew were too small for at least a dozen houses.

W.F.L. Construction, Inc. and its owner, William F. Ligouri, and former owner, Robert S. Paterson resolved Spitzer's investigation by agreeing to provide upgrades necessary to refit the septic systems, at a cost to WFL Construction of nearly $40,000.

"This home contractor's attempt to cut expenses ended up costing it dearly," Spitzer said. "This settlement will underscore the need for home contractors to uphold the highest standards at all times."

In 1997, WFL Construction became the exclusive builder at the Landings at Pond Hills, in the town of LaGrange. For at least 12 of the 28 homes, WFL Construction installed a septic system too small for the house under construction. When the Dutchess County Department of Health failed the septic systems upon inspection, WFL Construction simply resubmitted building plans that reduced the number of bedrooms in each house to three from four, thereby changing the size septic system required to be installed.

Based upon the altered plans, the building department approved 1,000 gallon septic tanks instead of the required 1,250 gallon tanks necessary for four-bedroom homes. WFL Construction, however, failed to inform its customers of the smaller size of the septic tanks and the associated leach fields.

It is estimated that the scheme saved WFL Construction approximately $300 - $500 per house. Because the Certificates of Occupancy were issued for three bedroom homes, the homeowners were left with houses that can not be resold as "four bedroom homes." The homeowners further faced increased costs associated with the more frequent service requirements needed for the smaller systems.

In settling the case, Ligouri, Paterson, and WFL Construction agreed to upgrade the septic systems, to cover the costs necessary for leach field extension, including the grading and re-seeding of disturbed project areas, and to pay the costs associated with securing the appropriate permits and revised Certificates of Occupancy. It is estimated that the total cost of these upgrades to WFL Construction and its operators will be approximately $40,000 for the 11 homes covered by the agreement. A twelfth consumer will receive additional compensation through private litigation.

WFL Construction also agreed to pay a $5,000 civil penalty and an additional $2,000 to the state to cover the cost of Spitzer's investigation.

Finally, under the terms of the agreement, additional consumers who believe they too did not receive the proper size septic system have until November 4, 2002 to file a claim with the Attorney General's Office. Individuals who are the original occupants of new homes constructed by WFL Construction should contact the Attorney General's office to find out how to determine whether the proper size septic system was installed in their homes. Consumers are encouraged to contact the Attorney General's consumer help line at (800) 771-7755 or the Poughkeepsie Regional Office at (845) 485-3900.

This case was handled by Assistant Attorney General G. Nicholas Garin of the Poughkeepsie Regional Office.