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Dunmore Homes bankruptcy leaves homeowners with liens

A year after Juan Reyes bought a new house in Dunmore Homes’ Country Villas subdivision in Livingston, he thought his only headaches were an overflowing A/C valve and a bathroom door that won’t close.

Now he’s got bigger worries.

After more than 50 years in business, Sacramento-based Dunmore has filed for bankruptcy and is liquidating its assets. Some of the contractors that worked on Reyes’ house — and hundreds of others across Merced County — haven’t been paid for the work they did. To get the money they’re owed, they’re placing liens on houses.

In Reyes’ case, two companies have placed liens totaling $7,000 on his house. The liens are financial “holds” on the property that must be paid off when the house changes hands.

That means people like Reyes, who bought his Dunmore house in February 2007 for about $400,000, find themselves cleaning up a financial mess they didn’t make. “Boy, that’s screwed up,” said Reyes when he learned of the liens. “I feel bad for those contractors. It’s not cool. It’s bad for them, and it’s bad for us as homeowners.”

But contractors say they have no other choice. “We don’t think we’ll recover anything worth talking about in the bankruptcy, and if we do, it will be a long time down the road,” said Glenn Peterson, an attorney representing Simas Flooring Company. “We’re just not real interested in playing on that playing field. The unfortunate upshot of that is that relatively innocent bystanders may get pinched.”

The bystanders in Merced County include homeowners in Dunmore’s most recent projects: Country Villas in Livingston, Stone Creek in Atwater and Copper Creek in Merced. Not every house in these neighborhoods has a lien on it. In some cases, the liens are on model homes, sales offices or property that was never sold.

All told, 27 separate companies have placed liens totaling at least $1 million on more than 500 houses in Merced County, according to documents at the County Recorder’s Office.