Santa Rosa makes it easier for unhappy homeowners to sever ties with builders

On a mid-February afternoon, people driving along Camino Del Prado in Coffey Park witnessed a curious sight.

Bea Caldwell, 66, was picketing in front of an unfinished home in the Santa Rosa neighborhood devastated by the October 2017 Tubbs fire. Inside the structure, construction workers went about their jobs.

Stooped from four back surgeries, Caldwell held her cane in one hand and a placard in the other, a sign criticizing Scott Gabaldon Construction, whose workers were on the job site, even though the company’s license recently had been suspended by the California Contractors State License Board.

She and her husband, Keith, had a litany of complaints against Gabaldon, including long delays, poor construction and overbilling on their Coffey Park home, a few blocks away. Underlined in the upper left corner of her sign was the word “HELP.”

Help was, in fact, on the way. On March 6, the city of Santa Rosa announced a new approach that will enable disgruntled property owners like the Caldwells to sever ties with their contractor and - more important - to reclaim the building permit for their home. The Caldwells are now in the process of wresting back their permit.

“Here’s the thing: I didn’t know it was suspended at the time,” said Gabaldon, whose contractor’s license has been suspended three times, and who’s paid $9,250 in fines to the state since 2015 for violations including failure to pay workers compensation and working with an expired license. Upon learning his license was suspended in February, he said, “I took care of it in four days.”

Keith Caldwell has a different recollection. After discovering his builder lacked a valid license, he called Gabaldon to express concerns.

“I can still work on your house,” he recalled Gabaldon telling him. “I just can’t take on any new work.”

When Jesse Oswald, chief building officer for Santa Rosa, announced the new policy at a meeting last week of the North Coast Builders Exchange, he got zero pushback. Most contractors “are as disgusted by the bad actors as the rest of the community,” said Keith Woods, CEO of the exchange. “They don’t like that it gives them a bad name.”

Before construction on a new home can begin, the property owner or contractor must apply for a building permit. If, as is usually the case, the contractor goes to city hall, pays for the permit and picks it up, that builder then owns the permit.

This can become a thorny problem down the road, if the homeowner becomes dissatisfied, and seeks to fire a builder. By refusing to release the permit - by holding it hostage, as some unhappy Coffey Park clients have accused contractors of doing - the builder can make it very difficult to relinquish it.

The city’s new stance on this issue reverses a longtime policy.

Pressured by increasingly desperate homeowners, the city recently consulted an outside law firm. Last week, Santa Rosa’s legal team changed its tune, concluding that city building officials can cancel an existing building permit and reissue a new one at a homeowner’s request.

“Under state law, building permits are ultimately issued for the benefit of property owners, not the contractors,” said Jeff Berk, chief assistant city attorney.

Among those pleased by this change of heart is Santa Rosa construction attorney Tim Hannan, who thinks “the contractor is, for the duration of the construction project, the agent of the owner” with no “proprietary interest” in the property.

“So it makes sense the owner would have control over the building permit,” he said.

It was Hannan who in November threatened to sue Santa Rosa if the city would not strip a building permit from Urban Equity Builders, then entangled in a dispute with his client, Marybeth Adkins.

That proved unnecessary. In December, the Santa Rosa building department canceled the permit after it determined that Urban Equity had abandoned Adkins’ home in progress.

While applauding the city for the new policy, said Adkins, “I do wish it was in place when I was trying to get my permit back.”

Oswald said the builders affected by this change in policy are a tiny minority. “By and large,” he said, the contractors working on the fire rebuilding “are doing an amazing job, extremely committed to getting folks home.”

Oswald estimated between 10 and 20 homeowners, rebuilding after the Tubbs fire, will take advantage of this opportunity to reclaim their permits.

Among them are Keith and Bea Caldwell, who on Wednesday stood outside their unfinished house on Walnut Creek Court, ticking off examples of apparent poor workmanship: the rain gutter above the front door that runs uphill, the twisted post supporting it.

Inside, he pointed to a vent in the kitchen floor that’s in the wrong place. “That was supposed to be a downdraft for the island. But the island was supposed to go over there.”

A cabinet, installed too close to the wall, opens only halfway. A door to the garage opened in the wrong direction.

Regardless of who holds the permit, the construction contract both parties signed remains legally binding. The Caldwells contend that the builder, Gabaldon, breached that contract by taking well over a year to even break ground on their house, after cashing a $33,000 check from them in March 2018. In all, the Caldwells have paid $300,000.

Calling Bea Caldwell a “liar” who is “off her ... rocker,” Gabaldon cited extenuating circumstances that delayed the progress on her home, including a historically wet rainy season, and the fact that, on June 6, he fell off a roof and broke six bones in his neck. “Fouled me up for four months,” he said.

“Honestly I wasn’t concerned about their house at the time. I was trying to stay alive,” Gabaldon said.

For their part, the Caldwells are trying to get back in their home, which will now be finished by a different builder.

You can reach Staff Writer Austin Murphy at 707-521-5214 or austin.murphy@pressdemocrat.com.