WARREN, Mich. (WXYZ) — Controversy continues to swirl over a house in Warren that the city sold for $1 to a nonprofit. The 7 Investigators first exposed the potential problems with this home sale last week.
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Now The Warren City Council is launching an investigation about the condition of the home and are demanding answers about how city inspectors signed off on the property.
“I think this is completely unfair,” said the new owner of a house on Dodge Ave. in Warren. “Had I known that information at the closing table I would have got up and walked away.”
When this young woman decided to become a first-time homebuyer, she never imagined her home would become the center of controversy in Warren. We are not revealing her identity because of safety concerns unrelated to this story. But she wanted to speak out about what happened with her first home purchase.
The 7 Investigators were the first to show you how this house was sold by the city of Warren for $1 to a nonprofit that helps foster kids. That charity is run by Theresa Toia who’s married to Macomb County Circuit Court Judge Joseph Toia. He’s the judge who recently ruled in the Mayor of Warren’s favor on a term limits case, just 10 days after his wife’s charity sold the rehabbed house for $95,000.
“It appears to be the classic case of a conflict,” said Warren City Council President Patrick Green.
The Court of Appeals later overturned Judge Toia’s ruling in a 3-0 decision. That means Mayor Jim Fouts cannot run again.
When the 7 Investigators first reached out to the young woman about the home transaction with the nonprofit, she told us she has discovered several things wrong with the house and now she wants to know how it passed city inspections.
She walked us through the home and pointed out several things, including what she says are bowing walls and areas of water damage.
“This huge chunk right there, this is rot,” she said, pointing to the base of a door frame. “This is rot - they just painted over it.”
She says she also found a leak in the ceiling. And according to two private home inspection reports, there are animals burrowing under the home’s crawl space, broken concrete on the steps, a damaged door, and more.
She says the home’s real estate listing stated the home had a new furnace, but when a contractor came to install an air conditioner, she says he told her the furnace that came with the home was several years old, had rust inside and had a crack that could leak carbon monoxide. He even signed a statement explaining why he condemned it, saying it “shouldn’t have passed final inspection.”
“So, legally, he said he was obligated to shut off my gas line to it and to remove it from the house,” said the young woman.
Then there’s the sloping floor and what the homeowner, private home inspectors, and other contractors say are problems with the foundation. Photos taken by those private home inspectors show pieces of wood used as supports under the home.
“This house is literally sinking,” said the young woman.
This was her first home purchase, and she says she now realizes she did not know all of the questions to ask. Her original private home inspection flagged the foundation as a defect, but she says she didn’t realize how serious the problem was until multiple contractors told her she needed more than $18,000 in repairs to the foundation.
“How do you pass a furnace that’s a safety hazard? How do you pass a house that has no stable foundation underneath,” said the young woman.
“This house is a mess! This poor young woman is stuck with this. It’s just a travesty,” said Warren City Council Secretary Mindy Moore.
Now the Warren City Council has voted to subpoena all of the building department inspections for the home. They’re also asking the Fouts administration and Toia’s non-profit “to meet with the homeowner or representative to provide an explanation for the problems she has experienced and to help find her assistance for the repairs or make her whole.
“You have a beam carrying a load that’s turning sideways. You have a cinder block on bias with scrap pieces of wood. You have a load-bearing wall not supported,” said Green during Tuesday’s city council meeting.
Green says after he learned about the problems with the home, he ordered a second independent private home inspection.
“The foundation is collapsing. It’s supported by unstable cinder blocks and untreated scrap pieces of wood. How it passed an inspection is beyond me,” said Green.
Meanwhile, the 7 Investigators obtained the city inspection records for the certificate of occupancy that Toia’s non-profit would have needed to sell the home.
In October of 2021, a city inspector noted that a permit was required for foundation repairs.
For the final inspection in July of 2022, Warren’s Building Department Director told the 7 Investigators his inspectors did not go into the crawl space to check the foundation. He said the floor was level at the time and said they believed Toia’s contractor had made the necessary repairs based on what they observed inside the home.
City records obtained by the 7 Investigators also show Toia received a warning letter in January of 2022 as well as a ticket in June of 2022 from the Warren building department for not having her Certificate of Occupancy work done yet. Court records show, after Toia failed to appear in court, a default judgment was entered. A few days later, court records show Warren Chief Assistant City Attorney Mary Michaels dismissed the ticket.
Michaels at first told the 7 Investigators that she didn’t remember the ticket, but on Wednesday she said the ticket was dismissed because it was issued in error. Building Director Jim Cummins also said the ticket was issued in error because work had been ongoing at the property.
But sources inside Warren city hall tell the 7 Investigators that ticket was not issued in error and that it’s extremely unusual to have the ticket dismissed by someone in the law department rather than someone in the building department.
“Why should I be financially liable for issues I literally had no knowledge of? Had I known that this house was like this – I would have walked away and kept looking,” said the homeowner.
As part of the city council resolution that passed Tuesday night, they’re asking the Fouts administration to disclose records about all of the homes they’ve donated for $1 during the last ten years.
The 7 Investigators have called and sent text messages multiple times to Theresa Toia to ask her about the condition of this home, and to see if she has a response about the city council’s resolution asking her non-profit to help the homeowner with repairs. So far she has not called us back.
