2020 Wildfires: Oregon State Begins Legal Action Against Suppliers of Defective Modular Homes

The two companies appointed by Oregon Housing and Community Services (OH&CS) to build 140 homes destroyed in the 2020 wildfires are facing legal action by the state for nearly $11.8 million.

In legal documents filed in Marion County Circuit Court, it is alleged that Nashua Homes of Idaho and Pacific Housing Partners delivered modular homes with several defects, such as damaged and cracked sidings and improperly installed drywalls and roofing.

OH&CS say repairs to the homes have already cost $7.7 million and that this figure is expected to continue climbing.

The state is also seeking to recover the cost of payments to consultants for overseeing repairs and investigating the damages, as well as ‘loss of use,’ storage fees, and the diminished values of the houses.

Contractors Failed to Respond to Requests for Repairs

OH&CS said it resorted to legal action after the contractors failed to respond or agree to repair the defects, according to the lawsuit.

The 2020 wildfires destroyed and damaged more than 4,300 properties, including Jackson County, where about 2,500 homes were destroyed or damaged. Many of the homes were prefabricated structures owned by families with limited financial resources.

The state chose Pacific Housing Partners, operating as brokers for a 10% commission, to supply homes to the Royal Oaks Mobile Manor in Phoenix. The brokers selected Nashua Builders as the supplier of the prefabricated modular units.

However, in April 2022, the Jackson County Housing Authority informed the state about alleged defects inside and outside the homes. State officials also discovered weatherproofing problems. The state then called for repairs but received no response.

In late 2023, the state announced an auction of the defective units with full disclosure to potential buyers.

The state agency has declined to comment on the lawsuit but disclosed that it was continuing to pursue the recovery of costs.