Some homeowners have already learned the hard way that lawyers and lawsuits may be their only recourse with new construction problems.

I-Team reporter Linda Eggert finds that little regulation and consumer protection put homeowners at risk.

Part three aired Feb. 13, 2003.

Home inspection consultant John Freiburger says it's "the largest non-emotional, as well as financial, investment they are making, and people see that being ruined and turning into a source of irritation and stress."

I-TEAM REPORT: Dreamhouse Disasters Part I: Read It | Watch It Part II: Read It | Watch It Part III: Read It | Dream House Disasters, Part III TALKBACK: TALKBACK: What's your story? E-mail Linda Eggert ONLINE RESOURCES: State Department of Agriculture, Trade and Consumer Protection -- Find information on Wisconsin's top consumer complaints, get the facts on deceptive business practices and scams, or call the Consumer Protection Hotline at (800) 422-7128. File a complaint online. State Department of Commerce Division of Safety and Buildings/Uniform Dwelling Code Section/ Field Services Web site and Complaint Form Wisconsin Builders Association 4868 High Crossing Blvd Madison WI 53704 (800) 362-9066 Better Business Bureau 10101 W. Greenfield Ave, Suite 125 Milwaukee, WI 53214 (414) 847-6000 | Toll Free Within Wisconsin (800) 273-1002 E-mail: info@wisconsin.bbb.org

After 30 years of inspecting homes, Freiburger says he's worried about serious construction problems in newer homes, and what they can do to homeowners.

Mike and Dorie Hubbard are involved in an insurance dispute with their builder -- seven months after moving into their $350,000 dream house.

"I want our life back," said homeowner Mike Hubbard.

The builder denies the house has code violations, but the Hubbards say it does -- and plenty of other problems that could mean more costly repairs.

Other homeowners News 3 talked to have similar stories. All say they have no place to turn.

"There are no safeguards," Hubbard said. "It's totally amazing to us that you can get by with this ... that somebody can take that much money and not be held accountable."

Unlike surrounding states, Wisconsin doesn't license home builders, but the trade group for state builders says that doesn't mean they don't follow the state building code.

"You certainly do your homework when you're choosing a builder and you hope that you choose someone that's going to adhere to the code," said Mary Anne Moore Church, president of Wisconsin Builders Association.

But what if you don't? News 3 has learned many rural areas don't have local building inspectors to monitor construction, and mistakes can still happen in those that do.

"The good inspectors that are out there, are doing a tremendous job," Freiburger said. "The problem is we don't have enough of them."

Records show a state-certified town building inspector watching the Hubbard house never noted obvious things we saw like open holes, support beams that aren't tall enough and insulation exposed to the elements.

"Obviously, from the types of things you describe, those are code violations, and those should have been noted and corrected during the construction of the building," said Ron Buchholz, deputy administrator of safety and building, state Department of Commerce.

If construction problems aren't detected and cause water and mold damage, experts say don't expect your homeowner's insurance policy to clean up the mess. "On a homeowner's insurance policy, an inherent defect in construction is probably not covered under the policy as an insured loss, never has been," said Dave Dybdahl, a mold risk consultant for the insurance industry.

Homeowners may get nowhere with a builder's insurance either.

What Wisconsin does require is a dwelling contractor financial responsibility certification -- fee: $40.

Under it, most builders carry at least $250,000 of general liability insurance, but that's mainly for worksite injury and death.

"It's primarily liability protection for the builder, and the workers who are on the jobsite during construction," Bucholz said.

Homeowners can file complaints with consumer protection, but even those officials say they have no laws that apply directly to new home construction -- only home improvement.

"There's a lot of regulations covering home improvement, which is just the remodeling or altering of existing structures," said Dave Tatar of Consumer Protection. "There isn't a specific law on new home construction."

As for the criminal system, state officials and detectives say builder fraud cases are extremely difficult to investigate and prosecute.

Freiburger says the best solution may be comprehensive builders' insurance that covers any defects a year or two after the house is finished.

"If we did have completed operations insurance that builders had to carry, so that if they did have a house with a $200,000 defect, that insurance would cover it," Freiburger said.

The State Builders Association, a large and powerful lobby that recently met with other businesses, says it is considering the licensing of builders. But Moore said, "Licensing may mean nothing more than you can pass a test. It may not necessarily mean that you are any better doing what you do than the person who isn't."

In Minnesota, builders are licensed, and must pay into a fund that homeowners can tap for repairs.

So how do you can avoid a dream house disaster?

Some say talk to as many former customers as possible. Ask them if they would they rehire their builder?

Watch out for so-called "builder's plans." They can lack detail.

Withhold the final payment from the builder until you're completely satisfied, and consider hiring a private home inspector.

In Wisconsin, you have do your homework.