Houses on 5th Street built by Streamline had cracks in the foundation and sewer backups. (Kimberly Paynter/WHYY)

A Philadelphia developer accused of building defective homes is in court this week fighting demands that it pay out hundreds of thousands of dollars to aggrieved homebuyers.

Streamline Solutions is being sued by four families who say shoddy construction of roofs, walls, gutters and other elements allowed water to penetrate newly built homes and cause extensive damage. 

The cases consolidated in the current trial are among many filed recently against the Fishtown-based homebuilder. 

Four other complaints have already resulted in $1.2 million in judgements or arbitration awards since last September, according to court records.

The plaintiffs are among hundreds of homebuyers in the Philadelphia area who bought new houses from various builders over the last two decades and suffered serious water damage that required tens or hundreds of thousands of dollars in repairs.

Repeated deviation from building codes or standard construction practices led to the problems, per the lawsuit, which alleges Streamline refused to fix or pay for or to repair them. The company has denied any wrongdoing.

A WHYY PlanPhilly investigation in 2020 identified at least 45 Streamline homebuyers with defects in their houses, most related to water infiltration. Streamline general counsel Dave Larkin acknowledged the complaints, but said the company had changed since those houses were built. 

“Streamline then and the Streamline now are entirely different entities,” Larkin told PlanPhilly in 2020. “That was really an upstart operation, with people doing whatever they could to survive and make money.”

CEO Michael Stillwell, who co-founded Streamline in 2008, said in an interview on Friday that Larkin’s remarks did not represent the company’s position. He denied it had ever built defective homes.

“We look to hire the best subcontractors in the area. We followed all inspections that the city had required at the time,” Stillwill said. The company continues to develop large housing projects and to market both rental and sale units in recently built projects.

Experts have attributed the breadth of the problem in Philly in part to builders who were poorly trained or cut corners as they rushed to profit from the construction boom fed by the city’s 10-year tax abatement and a general shift toward city living.

Cracking walls, peeling stucco, and mold

Jennifer Horn, an attorney representing homeowners in the trial that started last week, declined to comment while it’s ongoing. 

In the past she and others have criticized the use of short-term warranties like those offered by Streamline, saying companies often don’t honor them or use them as a reason to avoid fixing problems that surface after the warranties expire.

This particular trial concerns four houses on Crease Street in Fishtown that were purchased in 2015. Built by a team that included Streamline and an associated company, Nineteenth Street, according to the lawsuits, they sold for $515,000 to $590,000. The suits also name design firm Harman Deutsch. 

The buyers say they believed they were getting high-quality, well-built homes with warranty protection, but soon encountered problems.

Stillwell, the Streamline CEO, told Billy Penn he couldn’t discuss the Crease Street cases in detail while the trial is underway. But he contended that the people suing have admitted the homebuilder satisfied its warranty responsibilities.

“In the trial, the plaintiffs all kind of agreed to the fact that the warranties were upheld. We did go back and fix everything. And at the end of the warranty period, everyone was satisfied,” he said.

That’s not what homebuyer Matthew Selbovitz alleged in his court complaint. 

About six months after Selbovitz purchased his home, there was water coming in through a window. A manufacturer inspection concluded it had been installed incorrectly — but Streamline refused to fix it, according to the lawsuit.

Selbovitz later commissioned a moisture inspection, which found a laundry list of construction mistakes and resulting problems, per the lawsuit. The exterior stucco was thinner than required, window frames and seals were installed improperly, and certain necessary building elements were missing, like a vent to allow moisture to drip out of walls and sealants around doors. All that resulted in leaks and stains, bulging and cracked cladding, peeling stucco, mold, and other problems, per the court complaint.

One former Streamline construction manager, Mark Swisher, said in 2020 he used to get calls from homebuyers who’d asked for repairs during the warranty period and were flatly denied.

“Our clients are dealing with roof issues, water damage and possibly mold,” attorney Horn wrote in a letter to Streamline about the Crease Street homes. “This presents a serious hazard to the health, safety and well-being of our clients, especially given the vulnerable populations present in the homes, namely young children and pets.”

The trial is expected to continue through this week, with a verdict possible on Friday.

Meir Rinde is an investigative reporter at Billy Penn covering topics ranging from politics and government to history and pop culture. He’s previously written for PlanPhilly, Shelterforce, NJ Spotlight,...