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Foundation Issue - I Have Questions, Do You Have Answers?

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Real Estate Agent with Bob Leigh & Assoc., LLC

Foundation Issue - I Have Questions, Do You Have Answers?
by Pam Simpson
Desoto-Tate County Real Estate

I went to preview a bank-owned home the other day.  The agent remarks on the MLS sheet said "possible foundation problem".  Hmmm - you think!  What gave it away?  Possibly the fact that it looks like the back end of the house is pulling away from the rest of it?  I'm talking big, ugly cracks all on one side of theTilted House home and across the back. 

 

While walking around the outside of the home, it looked to me like the dirt under the home had to be built-up to make a building pad that was level (or near level) with the street.  That left a big drop-off down the back and one side.  The same back and side where the cracks are showing.

I left thinking what a shame.  The house is only 3 years old, is in a sought-after school district and is otherwise a nice home.  I imagined trying to live there with all that cracking and popping going on.  I wondered if they had approached their builder about the problem before the foreclosure. 

The next evening, I was watching our local news and a story came on about a family who purchased a home and they were having problems with the builder who would not live up to their warranty. This home was in the exact same neighborhood and the family was experiencing the same problems with their foundation.  They contacted the builder and could not get anywhere so they ended up in court.  (Side note:  in MS, a home builder is required to furnish a 1-yr. warranty).  What eventually happended is that the builder declared bankruptcy and a judge ruled that the warranty could not be enforced.

Question #1:  Someone told me that if a builder belongs to a Builders'a Association (i.e., North MS Home Builders, Memphis Home Builders, etc.) and the builder goes out of business, the home builders association is on the hook for that builders warranties.  Now, I really don't put a lot of faith in the person who told me this, so I am asking, has anyone heard this or knows if it is true?

InspectOne of the points that the news story brought out was that a buyer should have a professional home inspection even on new construction.  Now, I totally agree with this, but it brings me to...

Question #2:  When this house was newly constructed, could a home inspection uncovered possible foundation issues?  I'm thinking that none of the tell-tale signs were there at the time of purchase.

I have seen many older homes with foundation issues related to the age of the home, but never a newer home on a concrete slab in this bad of shape.  It was truly both a shock and eye-opener. 

 

 *** The content of this blog is not meant to be nor should be construed as legal advice***

 

____________________________________________________________________________________________________
About the author:

 Pam Simpson is an Assoc. Broker with Bob Leigh & Associates, LLC in Northwest Mississippi.
Copywright©  2009 by Pam Simpson.  All rights reserved...***Foundation Issue - I Have Questions, Do You Have Answers?***

  Disclaimer:  All information provided by this author may be  based on information collected from several sources and is believed accurate but not guaranteed.

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Carol Lee
Dilbeck Real Estate - Oak Park, CA
Realtor - Agoura, Oak Park, Westlake CA Homes

One would think that an inspector would have at least suggested further investigation, as it would likely be beyond the scope of a home inspector's responsibility.

Mar 27, 2009 01:55 PM
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Carol-I think you are right.  I guess if a home inspector saw something that raised a red flag, he might suggest a structural engineer take a look.  I had to have an engineer come out to one of my listings and give the ok on a chimney.

Mar 28, 2009 12:34 PM
Dale Baker
Baker Energy Audits and Commercial Properties Inspections - Claremont, NH
New Hampshire Relocation Real Estate Information

Howdy there Pam

I can't really be of much help with your first question. But for the second question. Yes a Home Inspector, could have found signs that this kind of thing could very will happen to the home. A specially with two big drop-offs. If these big drop-offs did not have retaining walls. To hold the soil from moven down and out. And lack of the right drainage to let water leave pass the retaining walls.  Carol is right in her comment above, a lot of Inspectors would say it's out side the scope of the Inspection. But they should at less put in there report that the area, should be further checked. I am known to point things out that some Inspectors will over look. This kind of thing is also where a good phased inspection come handy when folks are haven a home built.

God Bless America

Mar 28, 2009 02:43 PM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Hey Pam. In my area (Jackson, Brandon, & Madison) unfortunately we have a LOT of foundation issues, even with newer homes. Regarding your first question, I've never heard of the rule that the association would have any responsibility, but I have heard of the required six-year structural warranty being required, not a ONE-year (in MS). Of course, since the builder filed bankruptcy, that may have been his way out. I'm not sure, but I would have the homeowner consult an attorney before walking away from their home.

Question 2: I agree with Dale and Carol that the home inspector probably wouldn't have noticed anything amiss, and he would have likely placed a disclaimer to consult a structural engineer if the foundation were in question.

It's a sad situation when the house falls apart and no-one is held accountable. If you need any foundation work done, there are several companies in my area who have made foundation repair a FULL time job!

Thanks for the post, Pam.

Apr 16, 2009 01:06 AM
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Dale-thanks for the insight.  Years ago, I worked in commercial real estate development for a national retailer and we always got Geotechnical Reports on every site to make sure the soils would support our foundation and parking lots.  But this was really eye-opening.  Just thinking to the future when representing clients looking at new homes.

Pat - thanks for the information.  Unfortunately, the home has already been taken back by the lender.  The other home (that is still occupied) in the subdivision with the same problem was dealt with by the courts.  Those homeowners ended up paying out of their pocket to fix the issue because a judge said the warranty was no good due to the bankrupt builder.  It is truly a sad situation. 

 

Apr 16, 2009 05:38 AM
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