Two homebuilding companies are getting hit with lawsuits for defective units. Homeowners in the Daybreak community say their townhomes need repairs that could cost millions of dollars.

There are 387 townhome units in the Daybreak development known as Townhome 1, and the homeowner's association says every single one has experienced leakage and water damages. The HOA has enlisted the help of Sean Gores, an expert in construction defects.

“Daybreak is a beautiful community,” Gores says. “Unfortunately, it’s got a lot of a problems.”

Gores says it looks like many of the homes here were built quickly and poorly. Now, a few years later, the problems are surfacing.

The list of complaints from residents includes roofs and gutters that don’t drain properly, leading to damage in walls and ceilings.

Gores pulls samples of water-damaged materials and that came from surrounding homes.

“This is an interior sheetrock,” Gores says, unwrapping a crumbly slab. “This is the inside of one of the units. And unfortunately, it’s in a crumbling state. That’s not what sheet rock should look like. Once sheetrock gets wet, it’s no good anymore. You’ve got to take it apart and rebuild it.”

Gores holds up a piece of dry rot. It came from a home less than 10 years old.

The homeowner’s association here has picked up the tab for some emergency leakage repairs. But they estimate the extent of damage to be between $50-60,000 per unit—a total of more than $20 million.

Elizabeth Hill owns a unit near here and sits on the HOA board. She worries about how her family and their neighbors are going to pay for it all.

“I can’t afford $900 for an HOA payment,” Hill says, tearing up. “I can’t afford that. But I didn’t buy my home to watch it crumble to the ground. And I don’t want to see that happening to anybody in this community.”

Hamlet Homes is one of the homebuilders named in the lawsuit. In a statement the company says it was surprised and concerned about the allegations. “Early evidence suggests to us that these homes exteriors were not properly maintained, leading to other larger issues as the homes aged,” the company says, while noting that only a third of the homes in question were built by Hamlet.

The other builder named in the suit, Holmes Homes echoed that statement. “All buildings require maintenance,” says a statement attributed to partners Spencer and Patrick Holmes. “The homes identified in this townhome litigation include those that were built up to or over a decade ago.”

The company says it often hires a third-party inspector during construction to ensure quality.