Foundation Problems Throughout Townhome Community

Please, if anyone can offer advice on any aspect here whatsoever, I would appreciate it immensely.

Our townhome community which started builds in 2005 have several buildings experiencing foundation problems. I am the president of the association and am overwhelmed and distraught with trying to determine how to best help while protecting the remaining properties. One building slab cracked down the center and the developer had concrete pilings put underneath. The building adjacent has signs of foundation damage due to my knowing of two individual units with floor cracks extending from their entrance to exit (garage). I have observed another unit outside with horizontal cracks through the exterior, and the entire roof appears to be seperating from the structure. I was just advised today that another home may have foundation issues and several plumbers and engineers (from developer) have been on our property to look at this building. We will all be stuck with mandatory binding arbitration, which I hear the developer can just drag on forever until the individual has no more money to spare.

Our board is already struggling with money issues stemming from the housing market downslide. We could only implement stricter rules governing collections. Our $100 a month assessments cover management company, insurance, and water - about 75% of our total costs. I don't want to send the neighborhood into further panic about the other homes, because everyone already wants to sell due to all the renters that have had to move in! Now another building has foundation problems, so that is five more homeowners wanting to sell as fast as they can. How much of this must we disclose to the insurance companies and how will that affect our costs? Is their any hope for our neighborhood now? I am so overwhelmed, so any advice is appreciated. Thank you!

What is the statute of limitations on going back against the developer in Texas?

Thanks, JosephW, I will be sure to look closely at this!

KM:

I would get yourself a good attorney...if the damage is that severe the develope and builder are not going to want to fix it because they will lose money. You are going to need someone with experience dealing with this stuff...This is my opinion.

I have been digging up information for awhile, and did look at city permits on file. Here the city will accept a letter from a Professional Engineer saying the foundation is approved, in lieu of getting an inspection from the city. Of course that is what the developer opted to do.

I had a couple of appointments to talk to lawyers for a free consultation. Did some research to talk with those that had specific experience with construction defects and developer transition (we had other problems throughout common areas). I had an expert witness report from an engineer, along with a $3M dollar estimate (for what that was worth), but for these type of cases, the lawyers told me they would not work on contingency. I can't imagine blindly starting any proceedings paying up to $400/hr against one of the top-three home builders in the U.S. I'm not sure there is any way to estimate what a potential final cost to us could be? Paying $10K to just get a draft engineer report really hurt and basically got us nowhere. The developer just got their engineer to write up rebuttals that are over my head.

One lawyer didn't feel the association should go forward for all the findings, but rather those affected specifically by the foundation issues should pull together resources. Unique problems are posed there when you have an affected townhouse but not everyone in that unit wants to give money or put up a fight.

I believe in some areas of the country the soil contributes to these type problems. I don't know that you can just blame the engineer or the contractor who poured the slabs. However, I believe you still may have cause for a construction defect lawsuit. You need a good attorney who specializes in this area of the law. Also, if the problem is prevalent throughout the development it is the resp. of the assn not each individual h/o who's unit is affected. AZ has laws concerning construction defect litigation. You might want to check to see if TX does also.

You have a number of different problems, I have been involved in similar issues during my career.

First spent the money to get a top notch Forensic Engineer. NOTE the type of Engineer. Have them do destructive analysis on the concrete.
My expert states vs Your expert states is common in the business world let the courts decide.

Soil types are not relevant
Regardless of the soil which should have had the proper compaction

the slabs should have had pour samples taken by some engineering testing firm.
Find out if they did ! That may resolve the issue.
The concrete may have been a bad mix.

Did the county approve the type, grade and strength of the concrete?

As for only the affected units taking actions, the Association may act on behalf of the units owners affected as well those that have the potential of similar problems.

Like anything else you only get what you pay for. Get a Darn good lawyer who specialized in construction defects and go from there.
Support this attorney with the Forensic Engineer's report and test results.
Bring in the media, TV, Radio, etc WHAT do you have to loose

Once the developer sees you not joking he may reconsider, BAD pr will have an impact on their future sales.

I agree. There must be some sort of regulatory agency for engineers, even in Texas.

BradP, I think you are probably right. I think my game plan will be to first notify ALL owners of each affected unit as noted in our engineering report. I don't want them to find out at the same time as those without damage, and I would like to meet with them for the opportunity to discuss prior to holding a special meeting for all residents. I'm sure there will be a lot of disagreement for all concerned with property values, but ignoring the problem isn't really helping.

I also agree as you stated, that the attorney reaction is telling. I thought a $3M estimate from a P.E. would be motivating in some sense, but apparently it was not. After spending the 10K on the DRAFT report, then meeting with a couple of well-researched attorneys, things are at a standstill. I suppose at this point I just need to make sure the residents know what the situation is, and take the pressure off trying to make these decisions myself.

KM if you read my posts here I'm very pro BOD transparency. That said, BOD conversations with the attorney and any correspondence are privileged (at least here in OH) and do not have to be shared with the H/O's. Even in states with open meeting laws, this is one type of business that can be conducted in executive session without the H/O's present. And the BOD is not required to turn over any information about an ongoing case.

Glen,

The biggest problem here -- and throughout the Southwest -- is caliche soil. Caliche is a layer of soil in which the soil particles have been cemented together by lime. You sometimes need a jackhammer to get through it! I read an article which said: ". . .problems can arise if the building's foundation is constructed partially on caliche and partially on softer or more compressible soils, because differential settlement can occur. Builders who are aware of the difference in soils before building can use several methods to reduce potential for future soil-related damage."

KM is in Texas -- the Southwest! Don't know if caliche is a problem there, but perhaps it could be. Sure is worth looking into.