City moves to stop unpermitted flood repairs

A 9Wants to Know investigation has uncovered how investors are buying flooded mobile homes that were condemned last year and reselling them in neighborhoods in the Denver area.

KUSA - The City of Federal Heights is changing building inspection rules in response to a 9Wants to Know investigation, which exposed the safety concerns when flooded mobile homes are resold to unsuspecting families.

Those mobile homes include the one belonging to Ty and Marty Taylor, formerly of Evans.

RELATED: 9WTK finds couple's condemned trailer

"The floor was buckled up over a foot high," Ty said, recounting what the floods did to his home in the Bella Vista Mobile Home Park. "It smelled like raw sewage and mold and mildew."

His wheelchair-bound wife, Marty, was napping when the rains started. The next thing she knew, she was being rescued.

"It was scary to find a boat in your bedroom," she said. "They wrapped me up in a blanket and threw me in the boat."

Her husband returned a few days later to recover what he could.

"I knew it was gone; I knew we would never live there again," he said.

Ty says he almost didn't live to find another home. He thinks the flood waters he waded through gave him an infection that landed him in hospital for the next four months.

"Something in there got me, exactly what I will never know," he said.

The Taylors were surprised to hear that 9Wants to Know found their old home as it was being flipped and marketed for sale in the Kimberly Hills mobile home park in Federal Heights.

"Are you kidding me?" Marty Taylor said. "It was totally condemned."

"I never would have thought it was habitable again," Ty Taylor said.

Trashed trailers on the move

'I never would have thought it was habitable again'

9Wants to Know found the Taylor's flooded trailer in Kimberly Hills in June -- along with eight other trashed trailers from Bella Vista in Evans -- being prepared for resale. Some still had large Xs on their sides, which were placed by the original rescue crews.

Many also had red tags in the windows. All 200 trailers from Bella Vista and the Eastwood Village mobile home parks in Evans were tagged as unsafe to occupy by building and health inspectors after the flood.

"It took the mobile homes off the cement blocks and twisted and turned them sideways, and when that happens, the structural integrity of the home is damaged beyond repair," said Evans Economic Development Director Sheryl Trent.

"In every case, we found it was not safe to occupy," Trent said.

But as 9Wants to Know discovered, there are no laws in Colorado that prevent investors from buying condemned mobile homes and reselling them, as long as they disclose the home's true condition. Pat Coyle, director of the Colorado Division of Housing, says to fail to disclose the previously flooded condition would be fraud.

Coyle says there are state-issued guidelines for construction crews repairing flooded homes, which would include flooded mobile homes. He says the red-tagged homes would have to be properly rehabbed and pass a government inspection before people could move back in. The possibility of toxic mold concerns Coyle the most.

"You've got to make sure it's eradicated and not just covered up," he said.

The investors refurbishing the homes found by 9Wants to Know in Kimberly Hills did not obtain the proper permits, leaving Federal Heights' city inspectors in the dark about the extent of the damage and the repairs needed to lift the red tags.

"Our ordinances don't require that we do any checking on the condition the home was in before it came into the city," said Steve Durian, community services director for the City of Federal Heights. He confirmed none of the homes discovered by 9Wants to Know had pulled the proper permits to do the interior work.

In response to 9Wants to Know inquiries, Durian drove to the Kimberly Hills to assess the homes and issue Stop Work Orders, shutting down construction.

AFTER 9WANTS TO KNOW'S INVESTIGATION: The Colorado Division of Housing sent a warning about flooded mobile home flipping

"We worry about electrical connections and electrical wiring. We want to be sure the structures are safe," he said.

The Colorado Division of Housing has started tracking all of the 900 flooded mobile homes from the Colorado floods in response to concerns 9Wants to Know raised about unpermitted flooded mobile home flips.

The state is also concerned about disclosure. Coyle sent a letter to all mobile home installers and inspectors and municipal and county building inspectors warning that it's considered fraud if a seller "knowingly fails to identify" the truth about a flood damaged mobile home. It's a violation of the Consumer Protection Act.

Knowing that, 9Wants to Know wanted to know what Kimberly Hills management and staff are telling potential renters or buyers about the flooded trailers, so we sent in two producers undercover.

Those producers were shown a rehabbed flood home by an employee who identified himself as a maintenance worker. At the beginning of the showing, the worker said he did not know about the mobile home's history. However, our producers pointed out several signs of flood damage.

Producer: "What are those lines right there?"

Kimberly Hills Employee: "Looks like water."

Producer: "Water? From What?"

The employee went on to explain that the homes came from Evans.

"Where they had the big flood," the employee finally admitted.

We asked the manager of the Kimberly Hills mobile home park if she was telling staff not to mention the trailer's past. Tanya Wiebold would not comment, saying she is not authorized to speak for the company.

Kimberly Hills is owned by Utah-based Kingsley Management. They run 40 mobile home parks in eight states. Phone calls to the corporate office asking for an interview were not returned.

Who owns the trailers

'...I have felt like we are doing a good thing'

9Wants to Know followed the paper trail of the mobile homes' journey from Bella Vista in Evans to Kimberly Hills in Federal Heights.

The trailers sat in place for months following the floods. The Bella Vista and Eastwood Village property owners became legally responsible for them after the residents abandoned them. Evans city officials pushed for those owners to clean up the debris and remove the all the homes. With demolition bids coming in around $4,000 per trailer, the owners claimed they could not afford the cost to clear the land. Several early requests for government disaster recovery assistance were denied.

The owners found a cheaper way to clean up their communities by hiring Craig Shriver from Riverside Storage and Recycling. Shriver says he was allowed to pick homes that he deemed salvageable for removal, refurbishing and resale.

"Most of them I got for free to little money," Shriver said.

Shriver says his workers throw out destroyed personal belongings left in the homes and they rip out moldy carpet, cabinets, and wallboard.

"Everything would have to come out that's black," he said.

Shriver says each mobile home is doused in vinegar and Killz paint before he sells them off to other mobile home investors. Shriver says he charges between $7,000 and $12,000 for each home, which he sells in "as-is" condition and transports to their new lots.

Shriver says he also discloses the flooded condition on the sale documents.

"I put it right on the contract. It shows it in big bold print. [I] initial it, and they sign it… I don't feel bad at all with my part," Shriver said.

Several investors who buy fixer-upper mobile homes to flip take over from there. 9Wants to Know met Mike Townsend in Kimberly Hills. He says the company he works for bought two of Shriver's homes and moved them to a neighborhood in Thornton where they are fixing them up on site to either sell or rent.

"Affordable housing is important right now," Townsend said. "I have felt like we are doing a good thing."

He says the flippers will spend up to $15,000 on each mobile home to return them to livable condition, then advertise them for lease or purchase.

Townsend says Kimberly Hills managers, in an effort to fill vacant lots, are offering the investor/flippers additional incentives of several thousand dollars to place homes in that community. He believes that's why more flooded mobile homes are trucked in every day.

9Wants to Know found several formerly flooded homes marketed by Kimberly Hills online, including Craigslist. The prices for finished flood flips are nearly $40,000.

Residents in Kimberly Hills tell 9Wants to Know they have wide-ranging concerns about their formally submerged neighbors.

"The first night it came in, my kitchen filled with flies," said Joan Kelley, who lives next door to one of the trashed trailers. "The windows are open. The kids play in it."

"Makes me wonder - a few patch jobs and a paint job," Richard Stauffer said. "How safe is it going to be?"

Dr. Karin Pacheco, an allergy and environmental medicine specialist at National Jewish Hospital, says flooded homes have the potential to make residents sick.

"They can cause allergies," she said. "You can become allergic to the mold and get [a] runny nose, itchy eyes, sneezing, coughing, asthma."

Pacheco says proper remediation can eliminate the hazards.

"It's probably not good enough to paint over them. You probably have to replace them. You especially worry about carpeting because you can get mold underneath it that you can't see," Pacheco said. "As well as building materials like drywall so that's what you need to get rid of."

Pacheco offers this advice to potential homeowners:

"If it smells musty and moldy, it probably is. Using your nose is the fastest way to determine if there is a mold problem."

Building rule changes

Due to 9Wants To Know investigation

Before the wave of flooded homes, used mobile homes were allowed into Federal Heights without an initial inspection. The owner then had 90 days to set the home before city officials would look to ensure it had been properly tied down. That allowed flippers to make major, unpermitted repairs without being detected.

After 9Wants to Know discovered the flippers activities, Community Services Director Steve Durian issued 19 stop work orders. Durian says he has sent a letter to Kimberly Hills urging the property managers to either force the proper repair of the flooded homes or remove them from the mobile home park.

"It's the landowner that's responsible for ensuring the zoning regulations are being met," Durian said.

In mid-August, Federal Heights' building inspectors also announced changes to include a five-day, conditional mobile-home installation permit. A city inspector will now walk-through the mobile home during those five days. The inspectors check its overall condition and note any repairs needed to bring the home up to code.

"Inspections are done first. Then we give them 90 days to finish the mobile home set permit, which includes any repairs they need to have done, and after the 90-day period, they would be out of compliant," said Durian.

Building inspectors will double-check the construction as it progresses.

The city posted additional changes on their website, including a list of requirements for flood-damaged mobile homes. That includes providing the VIN and title to trace the origin. Electrical wiring that was wet will have to be replaced. Environmental assessment will also be required, looking for potential contaminants.

"Life safety is our primary concern," said Durian.

9Wants to Know reporter Melissa Blasius started investigating trashed trailers after receiving a viewer tip. If you want to expose suspicious activity email or call Melissa directly at 303-437-2083.

Anna Hewson and SuiTan Wong contributed to this report.

(KUSA-TV © 2014 Multimedia Holdings Corporation)


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