Tuesday, April 30, 2002

Erpenbeck: Scores of liens filed on homes

By James McNair, jmcnair@enquirer.com
The Cincinnati Enquirer

        Scores of people who bought new homes from Crestview Hills builder A. William “Bill” Erpenbeck are being dragged into legal entanglements over payment claims held by subcontractors, banks and local governments.

    Provident files suit

    Provident Bank has sued the Erpenbeck Co. and its former president, A. William “Bill” Erpenbeck, claiming they failed to guarantee $4.5 million in loans for a residential project in Miami Heights.

    Mr. Erpenbeck and his company guaranteed the loans to his Aston Oak Builders in 1998. Filing suit in Hamilton County Common Pleas Court, Provident said they breached the guarantees.

    Provident is asking for $2.6 million in its lawsuit.

        “We figured with a brand new house and a brand new subdivision, we never dreamt that anything like this would have come up,” said Chris Wahlbrink, who had $13,424 in liens filed against his Erpenbeck-built house in Independence in the last two weeks. “Everybody in the neighborhood is shocked.”

        As the FBI investigates allegations of bank fraud involving Erpenbeck Co., customers of Mr. Erpenbeck's various companies are learning painful lessons about the fine print of title insurance and mechanic's lien law. The FBI continues to decline comment on its probe. No charges have been filed.

        At the Grand Cypress condo projects in Clermont County's Legendary Run development, homeowners met last week to discuss the repercussions of Mr. Erpenbeck's apparent failure to pay bills. Two subcontractors, Builders FirstSource of Cincinnati and Quinn Electric of Erlanger, filed liens since February against the project for $6,112 and $16,260, respectively.

        “We've hired a lawyer to come out to speak to us May 8,” Grand Cypress homeowner Christine Clark said. “We found out that the $28,000 that Bill Erpenbeck was supposed to put in the kitty for grass, insurance, water and electricity was never put in.”

        Ms. Clark said 63 of the 91 units are occupied, with some occupied for about two years.

        Some owners want to sell, but they can't “because there's liens against the property,” Ms. Clark said. “They've been up for sale for some time. Some people paid cash for their condo and didn't get title insurance.”

        Some of those “owners” still don't have clear title to their homes because the mortgage from Legendary Run Builders to its bank was never satisfied and released. Mr. Erpenbeck was listed in loan documents at the Clermont County recorder's office as president of Legendary Run Builders.

        Mr. Erpenbeck was replaced as president of Erpenbeck Co. last month by his brother, Jeff. Neither has returned phone calls. Bill Geisen, a lawyer for Erpenbeck Co., said Jeff Erpenbeck is too busy to deal with the news media.

        “He's a people person and wants to satisfy his customers,” Mr. Geisen said. “He's going to focus his full time and energy on the company's business.”

        In the meantime, however, Erpenbeck customers are flustered by the company's inability — or unwillingness — to address the liens clouding the ownership of their homes and developments.

        Mr. Wahlbrink considers Erpenbeck Co.'s unresponsiveness par for the course. He signed a contract for his four-bedroom, 2 1/2-bathroom house in May but didn't close until Feb. 11.

        He has no idea how he will handle the two liens placed on his home.

        “I don't have the money to clear” them up, he said.

        The exact number of homes tied up by liens is unknown because they are filed throughout a seven-county region. An Enquirer review of records shows that the liens are often being filed against entire projects and condo buildings, as well as against individual homes.

        Rob Linneman, a Cincinnati lawyer who represents Builders FirstSource, said mechanic's liens aren't filed to abuse home buyers. Property encumbered with liens can be sold, but only if the buyer is willing to assume them, he said.

        “A mechanic's lien is a statutory right given to anybody who works to improve real property,” Mr. Linneman said. “It gives the creditors a right in the property.”

        Homeowner's title insurance can cure the problems Erpenbeck customers are facing — if they asked for coverage against liens filed after closing. In Ohio, the coverage is free. In Kentucky, it costs $5 for every $1,000 of coverage or $1,000 on a $200,000 home.

        “A title policy has an exclusion for unrecorded mechanic's liens,” said Dan Dozer, executive director of the Ohio Land Title Association, a trade group in Columbus. “On new construction, people can ask that that exception be taken out.”


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