Buyers sue developers of condos Unit owners allege Baltimore Co. project poorly constructed; Trial begins this week; Suit seeks $12 million for air, water leaks and faulty fireplaces


The sales brochure for the Club at McDonogh Township promised condominiums "built with the highest quality construction materials" in "an environment of lasting beauty that you'll be proud to call home."

Ten years later, the 132 condo owners at Reisterstown and Greenspring Valley roads in northwest Baltimore County call their homes a disaster -- full of water and air leaks, ill-fitting windows and doors, hazardous fireplaces and leaking heat pumps.

They say even some of the nails were hammered in wrong.

The owners will face off this week in Baltimore County Circuit Court against the project's architect, developers and the warranty company they are suing for $12 million in damages, alleging negligent construction, fraud, breach of warranties and violations of the Maryland Consumer Protection Act.

The suit claims Baltimore County developers James and Terry M. Rubenstein oversaw shoddy construction, knowingly sold units that were defective and did not make adequate repairs, even after problems were discovered by their staff architect, consultants and county building inspectors.

It also alleges that the Rubensteins siphoned more than $1 million from their company -- Bancroft Homes of Greenspring Valley Inc. -- that should have gone into construction before they closed the business in 1988 for lack of funds and laid off 100 workers.

Documents filed in court by the condominium owners' lawyers state that James Rubenstein was unable to explain during his deposition why more than 20 checks were transferred -- in amounts ranging from $2,000 to $75,000 -- into the Rubensteins' personal bank accounts and the accounts of their other corporations.

The money was allegedly transferred during the project's construction phase, from 1986 to late 1987.

The project was completed by Signet Bank, which took over the final construction phase after foreclosing.

L The Rubensteins declined to be interviewed for this article.

But in a statement, the couple said: "Disputes about the alleged need for and amount of repairs at the Club condominium have been ongoing for 10 years.

"Unfortunately, we have not been able to resolve the disagreements with the unit owners who have filed suit against Bancroft Homes of Greenspring Valley Inc. There are serious differences in how we view the situation, and the legal system will help the parties come to a resolution."

In court documents, the Rubensteins' lawyers have denied the charges and blamed the subcontractors who installed heating, air conditioning, siding and floors for any problems at the Club.

The trial, expected to begin this week with jury selection, may take six to eight weeks.

The Rubensteins are well-known among Baltimore developers. At the time of the Club's construction, the couple began to build in a larger residential development, now called Owings Mills New Town, a few miles to the north.

Terry Rubenstein, the granddaughter of the late developer and philanthropist Joseph Meyerhoff, was chairwoman of the board of the Baltimore County Chamber of Commerce from 1994 to 1996.

The condominium owners hope to recoup nearly $2 million that )) the condominium council has paid for repairs and legal fees, said Marty Sitnick, president of the board of directors of the Club at McDonogh Township. They also need $5.8 million to complete repairs to the eight buildings, he said.

"The community has taxed itself way beyond what it can afford to rectify the wrong which is this horribly defective construction," he said.

Many of the condominiums, originally priced at $80,000 to $185,000, are owned by retirees.

Sitnick said each condominium owner already has paid between $10,000 and $20,000 for repairs and legal fees, in addition to the usual condominium fees and mortgages. He said some retirees have had to get jobs to finance the repairs.

He said condominium owners began noticing problems in 1986 that included water leaks in numerous places -- from the roof to the ground level.

Owners were told "these type of problems are to be expected and that they would be repaired. Ultimately, they weren't. I was given Mr. Rubenstein's assurances personally that these things would be taken care of," Sitnick said.

In 1991, the condominium owners realized some of the buildings had structural problems when balconies began to sag. They decided to finance the repairs themselves, spending nearly $1 million to retrofit the bottom two levels of the buildings, said Sitnick.

When workers began to make repairs, said Sitnick, they discovered a lack of insulation in places and water damage to the structure: "It was obvious that a great deal of work needed to be done."

Then, in 1994, they discovered problems in fireplaces. Since the discovery, the 40 condominium owners with fireplaces have been unable to use them. No accidental fires have occurred.

"It's not only cheap construction," said property manager Barry Yatovitz, "but construction by people who didn't know what they were doing."

Pub Date: 2/24/97

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