This home at 330 Ringneck Trail in Warsaw has been the center of a legal battle since 2006. (Photo from Beacon)

Litigation on a home at 330 Ringneck Trail in Warsaw began 7 years ago and still has no resolution, but Warsaw’s code enforcement officer Lawrence Clifford made it clear today that “significant progress” needs to be made by Aug. 18, or he may order the home to be demolished.

The home is owned by Kyle Babcock and problems with the house he had built in 2005 began almost immediately. In a counterclaim to a lawsuit filed against Babcock in March 2006 by Ousley Construction for nonpayment, Babcock alleged water and mold issues in the home rendering it uninhabitable.

Babcock failed to show for today’s code enforcement hearing, but an attorney representing the mortgage holder, IndyMac Bank, did attend.

Attorney Amanda Porter said the bank’s intent is to get the home in a state good enough to be put on the market for sale. “The bank is looking to move the house, flaws and all, to a new owner,” she said.

But that may not be as simple as it sounds.

City building commissioner Todd Slabaugh estimated it would take $25,000 to $28,000 just to bring the house into compliance and approximately $110,000 to make all of the necessary repairs. The cost to demolish it would be $8,500.

“I think it’s worthy to note, that crosses a fine line with unsafe,” said Slabaugh. He noted the presence of approximately 3 feet of water in the basement and the mold, structural damage to studs and electrical wiring, issues of mildew and heaving laminate flooring that have all resulted from it.

Slabaugh added, “We might not have known this had the electric not been shut off (in May of this year), but I can’t imagine that the cause of water is ground water. To have that amount of water in that basement in two months time is a foundation failure … by virtue of the window wells and the downspouts where water is being directed, that may not be a failure in the foundation itself as in it’s cracked, but water is getting into places it shouldn’t.”

On Aug. 12, 2009, a settlement agreement was entered in court between Ousley Construction, Babcock and IndyMac Bank. Porter said the agreement called for Babcock to sign over a “deed in lieu” to the bank, but Babcock has never done that. “He did not comply with the court order and additional liens have been attached so there’s no clean title,” she explained. She said the liens are in excess of $50,000.

The owner of record is Babcock, but Porter said the foreclosure process has been long in the works. Clifford told Porter, “Obviously this has been going on for way too long. Seven years in litigation … it needs to be resolved.”

He added, “The statute is clear: the owner or someone with a substantial financial interest is responsible. The point is, something needs to be done quicker than it’s going … I see very little if any progress so far. If there’s any thought in the bank’s mind that this guy up in Warsaw has just let this ride for a while, you need to disavow them of that.”

Clifford opted not to issue any civil penalties in the matter this time, but said if there are no significant improvements and changes made to the property and the residence by Aug. 18, he will impose the maximum civil penalty of $5,000 per month. “I could order the demolition and that’s what the city wants, but I think the civil penalty is more valuable,” he said.

The matter will be revisited at 1:30 p.m. Monday, Aug. 18.