Virginia Real Estate, Land Use & Construction Law : Virginia Construction Lawyers & Attorneys : Bean Kinney & Korman Law Firm : VA Real Estate, Land Use & Zoning

Good point on the trusses. I would think, like the question we just pinged on twitter, that this would turn on the question of "what is the predominant nature of the contract, goods or services", just like always.

The trusses themselves would always be goods, the only question comes up when the truss company actually installs them. I have not run into that one, usually they are purchased and delivered then installed by a sub under a separate contract. You end up getting a lot of complicated fact patterns of which warranties are UCC and which are construction contract warranties.

Tim,

Interesting post, and you bring up some valid concerns. However, as a former traditional stick-builder turned custom modular builder in Northern VA, I can tell you that from a pure quality of construction perspective, you can't compare the stick-built industry to the modular industry. For the simple reason that the modules must be built to a higher standard to withstand the over-the-road transport and craning in place, there is just no comparison. I don't know if there is any data you could cite to support your contention that there are problems with modular homes that are of a higher frequency than problems with site-built homes. If you could site a statistic that ___ % of modular homes suffer from ____ problems, versus a lower % of cases with site-built homes, I think you would have a case(and if you can, please do so). I would be very surprised if such data showed a discrepancy for modular homes built in the last 10 years. If anything, I feel ESPECIALLY in our area that modular construction gives the homeowner a better chance at higher quality because of the quality control practices inherent in commercial assembly plants, the better conditions for workers there, and the generally higher level of skill and experience of the factory workers as compared to the folks your encounter in site-built construction in Northern Virginia. The quality control that happens in the field on the just-crossed-the-border framer who can't read the plans (not exaggerating) depends on the builder's availability to personally walk through the job site every day of framing. That's one person you're entrusting the entire quality control standard of the home as compared to the factory's third-party inspection teams in addition to in-house plant supervisors and the fact that walls are framed in jigs, which is essentially foolproof. The truth is that the traditional building world lags behind largely due to the fact that most builders don't have QC systems in place. They rely on their "eyeballs" to detect imperfections, and conduct quality checks in a very haphazard way. How do I know this to be a a fact? I was the choke point for hiring and firing of new construction supervisors for an area builder with a good reputation, and over my 4 year tenure we had over 100 percent turnover. Why? Because the hiring strategy of the builder I worked for was to hire construction supervisors and see how their houses turned out. When they proved themselves incapable of producing quality homes, they were let go. At the same time, we tried to implement quality control systems, but they were largely ignored or "pencil whipped" by the construction supervisors, and it all fell back on their individual "eyeball" methods. This is not a good system for consistent product quality, and because most were hired away from many national builders, I can only assume they didn't learn this practice at the company I worked for. Let's face it, it's hard to do the right thing, and when you're one person managing a community of homes with often 10 homes (during the boom) going at once, you just don't have time to give each one the attention it deserves. So I respectfully disagree with the message your article conveys that Modular homebuilding hasn't come into its own yet. I have operated in both worlds, and I can tell you for a fact that the quality is higher with modular in general, in our market.

I know that you are speaking from the perspective of an attorney and your points may be valid from a "what's your recourse as a consumer?" perspective. To that point, I would say that if anyone decides to take on a builder on quality issues, the way sales agreements are written, and the general cost of things for the consumer, there is no winner in that. But let's assume that a consumer wants to take the "who can I have a better chance of suing" approach for making their buying decision and is swayed by you. Any builder with the financial assets worth going after in a law suit will surely have very carefully crafted contracts in place with their subcontractors that cause the small framing (or plumbing, electrical, HVAC, etc.) contractor to indemnify them. So even though it seems like the local builder is more at risk, they really aren't. Add to that the fact that each community is typically set up as a separate LLC, and there is insurance to catch all fallout anyway, there really isn't a good way of litigating builders into producing quality--they are largely untouchable too. If anything, I would think that because most modular manufacturing companies ship their product to a much larger territory (e.g. mine ships to the entire eastern seaboard) than any but the largest of builders can, there is a greater reputation risk for them, and a greater incentive to build better quality.

The bottom line for me is that no one should purchase a home with the attitude of falling back on litigation as a recourse. My feeling is that they should research any builder (traditional or modular) and get a sense of their chances of delivering on the quality they promise. No one but the attorneys win in litigation (sorry), and I think any discussion of who is more or less "untouchable" is moot. There are a few of us good builders out there, you just have to find us. In my case, if a potential buyer listened to your cautions, they would never buy from me, and I think that would be a disservice to them; but I'm probably biased on that point ; )

Tim,

Thanks for the clarification, and I agree with your perspective in general, as clarified. Honestly, my reaction to your article was mostly colored by the title you chose to give it. Saying "currently risky" implies that other things are currently less risky (or that at some time in the future things will not be risky), and I don't think this is so for modular, especially for the reasons we both agree on. I think the process of vetting modular builders involves a separate evaluation of their modular supplier, because modular suppliers are not all of equal quality. I am constantly reminded of that fact by salesmen from other modular suppliers who call me to bid out new homes and tell me my supplier of choice "overbuilds" their homes. I know I pay more for the modules through Haven, but it brings me peace of mind to know the homes I build are sound, and far surpass the production stick-builder crowd.

I would like to address one point you made specifically: you stated that you always favor "craftsmen" over production shops. I would say if such craftsmen are within the reach of a consumer's budget, that's a great strategy, but realistically, it's less than 10% of the market (just guessing) that can afford that (or has the means and chooses to pay more, if you believe "The Millionaire Next Door"), so most people are forced to hire a company that either is more "production-esque" or is a pure production shop. Given that, I would say that modular is no more risky today, and in fact is less so for the mere fact that at least there are systems in place in most modular processes that attempt to guarantee quality. Add to that fact that when you hire a custom modular builder like me, you get to fully customize your home to your taste, lot, orientation to the sun, etc. You get to do that for much less than the cost of hiring an architect and a separate custom builder who will typically still use panelization, or maybe a low-skilled set of subcontractors to build the home. I would also reiterate that all things being equal, the structural integrity of a modular home IS better than a stick-built home. It has to be because the first floor has a ceiling joist system that is independent of the second floor's floor system, and if you use a company that builds the roof as separate boxes (which we do), the attic floor is also separate from the second floor ceiling. There are great structural advantages to that, and I think it bears mentioning. I would be surprised that you would have any cases of structural failure of a modular home built in the last 10 years, but given the breadth of your experience with litigation, I am not foolhardy enough to make any such assumption. I am sure that just like there are careless builders, there are careless modular manufacturers, but that brings it back to my first point: as a consumer, one must evaluate the modular supplier as a separate segment of the builder vetting process. Ultimately, even purchasing a car is on some level "risky" as Toyota's recent woes illustrate, and I reacted to your post mostly because I don't want someone scanning through their Google Reader one morning to grab onto that sound bite and walk away telling 20 of his/her friends that he read on a construction lawyer's blawg that modular is more risky. I feel now that perhaps you didn't mean to communicate that message, and hope that not too many people were turned off by simply scanning the title and not reading the article further, walking away with a negative impression of modular homebuilding. As a modular homebuilder, I am constantly reading what others have to say about our industry, and there is largely still a prevailing lack of understanding between such concepts as "Modular" and "Manufactured," and of course, the perennial free-association of modular with "double-wide." I am working diligently, one response at a time, and through my own blog to provide more information and give credit where it's due. Listen, I myself once scoffed at Modular as being substandard until I woke up and started reading factual accounts. I had the good fortune to work with a former employee of the NAHB who one day gave me a summary of the NAHB's findings about the merits and even superiority of modular. It began a conversion process for me which finally culminated in me going out on my own to build modular homes. I have to say, as a builder who went from stick building to modular, I would never go back. I don't trust the vendor base in our area to produce as good a quality, and don't feel that there is a large enough population who can afford to hire the truly skilled labor that is becoming more and more scarce around here (and correspondingly more and more expensive). I also could never deliver my homes with the speed, quality and price I can through modular, were I to build by traditional methods.

Modular — or manufactured — housing has been around for more than a century. With modular, individual modules are built off-campus in a factory to the specifications of campus planners or architects. When complete, the newly constructed residences are transported to campus and put in place.
The two primary advantages to this approach are cost and completion time. If properly designed and constructed, modular housing can be developed for a fraction of the cost of traditional housing and still meet the highest quality standards. Because the residence halls or apartments are constructed off-campus, the majority of the development process has no physical impact on the campus. Once the completed product is transported to the university, the setup can be completed in a matter of days.
Completion speed also can have a huge effect on funding. If a building can be completed in a few months rather than in a year, financing costs can be reduced, and funding can be obtained more readily.
So if manufactured housing is so attractive, why don't more universities choose this approach? The primary reason is that modular has acquired a bad reputation over the years — in many cases, rightfully so.
Manufactured housing originally was created as a way to build more durable buildings at a lower cost. But over the years, many developers have used it as a way to maximize their profits by cutting corners. The result has been neighborhoods full of ugly boxes that were constructed shoddily.
However, that doesn't have to be the case. Many reputable modular companies operate throughout the United States that are capable of building high-quality manufactured housing for colleges and universities.
Although modular isn't the right choice for every campus, it can be an attractive option in the right circumstances. In fact, the very nature of modular construction ties in well to the typical campus housing approach. Generally, a residence hall or campus apartment building houses uniform populations with similar needs: a desk, closets, dressers and room for a bed, for instance. The uniformity of modular design is perfectly suited to the needs of most campus housing facilities.