Test-Drive Your New Home

Editor's note: As a special feature for April, TheStreet.com offers a series of 20 stories on everything you need to know about real estate. Today's installment is Part 8.

Waking up to six-foot-long cracks in your new home's ceilings, walls and floors is a frustrating experience. But construction defects are a fact of life in today's real estate market, and many of these problems stem from shoddy workmanship that was overlooked in the recent U.S. housebuilding boom.

Rod Frye learned this the hard way after he purchased his dream lakeside home in Glendale, Ariz., in 2001. Just four months later, during monsoon season, the large cracks started appearing across the property. The issue, he learned, was expansive soil -- a phenomenon that occurs when houses built on clay end up moving along with the earth, causing cracks in a home's structure. Besides Arizona, the issue is a major problem in California and Texas.

Frye, who is the home's third owner, says he ended up suing the builder, Courtland Homes, because the firm denied it was its responsibility to fix the problem.

"They said we were exacerbating the problem by over-watering. The builder didn't seem like they had any interest in helping us," he says. Frye and other members of the community settled the lawsuit with the builder several years later after a trial jury returned an adverse verdict.

In recent years, "there was a lot more poor-quality work from subcontractors," says Richard Gramlich, an attorney with Carmichael & Powell, the firm that represented Frye. Under Arizona law, there is an implied warranty, where a builder is required to build a good and fit home. The warranty applies to the original purchaser and subsequent purchasers like Frye.

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