“You love your home and then it turns on you,” The New York Times reports one homeowner said when he discovered the foundation of his home was cracking, crumbling and moving. Repairing unstable foundations costs homeowners around $4 billion a year and that cost often is not covered by insurance.
Frequently, the shifting is the result of contractions and expansions triggered by soil drying out from lack of rain or being flooded by excessive rain. Kate Murphy, writing for The New York Times, reports in “Shifting Soil Threatens Homes’ Foundations” that some experts believe these shifts are due to global warming.
But weather does not let builders, engineers and architects off the legal hook. They are supposed to consider soil conditions and how that soil might expand and contract during dry and wet weather conditions in designing and building the foundations of homes and other buildings.
Some homebuilders and developers regrettably were involved in the massive mortgage fraud that helped trigger the present recession.
A Federal Financial Institutions Examination Council (FFIEC) White Paper (PDF) labels one common scheme the “Builder Bailout.” and describes it as follows:
A builder bailout occurs when a builder, who has unsold units in a tract, subdivision, or condominium complex, employs various fraudulent schemes to sell the remaining properties. In stressed economic or financial conditions, a builder may be pressured to liquidate remaining inventory to cover financial obligations. To sell the remaining properties, the builder may use a variety of tools including, but not limited to, hidden down payment assistance or excessive seller concessions to elevate the sales price. As a result of the scheme, the unsuspecting financial institution is often left with a loan secured by inflated collateral value and the “real” loan-to-value is greater than 100 percent.
On April 21, new lead paint rules applicable to housing and certain child care schools and facilities built prior to 1978 go into effect. Lead exposure can cause brain damage; exposure prior to age six is especially dangerous.
Contractors and owners can find the EPA’s regulations on lead paint in Title 40, Part 745 of the Code of Federal Regulations.
Visit The Illinois Construction Law Blog for a great summary of these new rules.
"To listen to talk radio, to watch TV pundits, to read a newspaper’s online message board, is to realize that increasingly, we are a people estranged from critical thinking, divorced from logic, alienated from even objective truth. We admit no ideas that do not confirm us, hear no voices that do not echo us, sift out all information that does not validate what we wish to believe. I submit that any people thus handicapped sow the seeds of their own decline; they respond to the world as they wish it were rather to the world as it is."
The Virginia Real Estate and Land Use & Construction Law Blog reports that the recent blizzard in Washington caused a wave of roof collapses. Undoubtedly questions will be raised about the design and construction of some of these structures by owners and their property insurers. . Seeing photos of the damage reminds me again why I love living in Mississippi. It snows for a day then goes away.
The Federal Contracting Law Blog reports that in January President Obama signed a presidential memorandum instructing the IRS to audit all federal contractors. The audit will prevent companies that owe back taxes from obtaining more federal work.
State and local governments across the country may have to replace their water systems because of defective PVC pipes, according to a whistle-blower lawsuit filed in California against JM Eagle, one of the worlds largest pipe manufacturers, reports the New York Times.
The whistle blower claims that the manufacturer fabricated test results. We will be monitoring developments in this case.
In a long awaited decision, the Mississippi Supreme Court ruled last week in Architex Association, Inc. v. Scottsdale Insurance Company (PDF) that construction defects caused by subcontractor negligence are occurrences(accidents) triggering coverage under the terms of a general contractors’s commercial general liability policy.
The Court’s decision is a huge victory for all the major players in residential and commercial construction. The biggest winners may be homeowners, developers, schools and state and local agencies. The cost of remedying a construction defect and the diminished value of a building caused by a construction defect often greatly exceeds the original cost of construction. Absent insurance coverage, homebuilders and general contractors often do not have the wherewithal to indemnify the owner for these legitimate damages.