Home Builder Takes Deposits, Leaves Million-Dollar Homes Unfinished

A North Texas family says they spent more than $200,000 to build a new home and never got the house. They want a refund, but the builder says they won't get one.

Gilbert and Heather Melendrez say they lost their life savings to a bankrupt builder. When NBC 5 Responds started looking into their story, we found out they weren't alone.

The Melendrezes have rented all their lives, and when they spent their life savings on a "dream home" with a price tag of $1.3 million they thought they would finally have something to show for all that hard work.

The family signed a contract with M. Christopher Builders. The home they picked out in Prosper was under construction and about halfway done when they paid a $100,000 down payment.

"We were gonna have Thanksgiving at our house," Heather Melendrez said.

But that didn't happen. There were delays for weather, material and labor.

Their halfway-completed house stayed half completed.

Still, it is much further along far more than Lori Pace's new home.

"Nothing has been done, what the heck?" Pace said.

She paid $80,000 to M. Christopher Builders to start building a home valued at more than $500,000 in Colleyville.

"I kept saying, 'When is it going to be sheet-rocked?'" Pace said.

After her constant delays she said her saleswoman told her the builder was nearly bankrupt.

"The way they did their accounting wasn't correct, and they didn't realize it until it was too late," Pace explained.

The Kabbanis heard the same bankruptcy claim but didn't believe it.

Their Richardson home was more than 80-percent complete. They already paid more than $200,000 and were preparing to move in when the builder's bank foreclosed on what they thought was their home.

"The bank has a debt close to $1 million. They wanted me to pay for it, to take it as it is and I don't have the money," Wareef Kabbani said.

Neither did the Melendrezes, who say they kept paying more money as the builder asked. In total, they spent $200,000 before they heard about the financial problems that M. Christopher was having.

Before they could take action they say M. Christopher's owners called a meeting with them wanting more cash.

"I said, 'If you need more money it is because y'all are having financial problems.' And they looked at each other and just stormed out of the house," Gilbert Melendrez said.

The building company's website is in limbo and the homeowner's phone calls were not returned. They asked NBC 5 Responds for help.

We tried to track down the company's owner, Rudy Rivas, for more than a month before getting him to answer a personal cellphone.

"Due to circumstances beyond our control, we have had to seek protection of bankruptcy. We are sincerely sorry for this situation," he said.

The Melendrezes, Kabbanis, Lori Pace and several others say they trusted their builder, spent their life savings and in the end they don't even own a single brick.

"The way that they did was just so ugly and so wrong," Heather Melendrez said.

If you're ever planning on building a home, here's what you should know:

Real estate experts say there are laws which allow the buyers to "follow the money." If M. Christopher's owners still have any cash or assets, they can sue even though the company went bankrupt. A lawsuit is the only option, but other creditors may be in line for cash as well. One real estate expert suggested getting a performance bond and not paying for work that isn't completed yet.

NBC 5 Responds was unable to find a filing in court where M. Christopher filed for bankruptcy, but we have reached out to the attorney the builder says is handling the filing and are waiting for an update.

Many complaints about home builders are coming from Austin. KXAN, the NBC affilliate in Austin, spoke to homeowners just like we did who paid hundreds of thousands of dollars in down payments on a new home only to have the builder file for bankruptcy before they could move in.

NBC 5 Responds' reported on several North Texas families who lost money when their home builder's business went under, and now we're hearing from even more homeowners going through the same problem with another builder.

NBC 5 and KXAN in austin are working together to profile the next steps for these homeowners. Many are pushing lawmakers to come up with better laws and protection for home buyers. Stay with us as we profile these families efforts to seek justice.

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