New Home Buyer's Nightmare
September 11, 2014 11:48 PM Subscribe
I'm asking this for an acquaintance. She and her husband purchased their first home earlier this year in Texas. Some time after moving in, they realized that the floors were uneven and discovered that they had major foundation problems (concrete slab foundation).
Their mortgage company paid $9000 to a foundation-repair company with a horrible reputation ('F' at the BBB) who totally botched the job, and actually left the site without completing the work (large, deep holes all around and underneath the home were left open, holes in the inside that had been jackhammered through the foundation were left open). They had to pay out of pocket to get the holes filled and have the break-throughs in the interior repaired.
Now they're experiencing movement again, just a few months later. The mortgage company tells them to talk to the foundation repair guy. He laughs and says he won't honor his warranty because 'the mortgage company was rude.' Tells them there's no way he's going to do anything for them, at all.
This is a young military couple. He's recovering from a serious back injury he received while deployed overseas, and is undergoing a battery of surgeries to get him back into shape. They also have a young child (just mentioning those things to give an idea of how sympathetic the homeowners would be if this ever went to court). They're also in the middle of adopting another child right now.
I'd love to be able to give them some advice and help them remedy this horrid situation, but I'm a bit at a loss as to how they should proceed. They do have photo evidence of all of the open holes that the foundation contractor left. They're also going to have a structural engineer come out to check the foundation (at my recommendation) so they have a professional opinion, should they need to take the issue to court.
Any further advice? I've thought about suggesting that they contact local news media - seems like a made-for-local-news human interest story. I know that pursuing something like this in court can be expensive and comes with no guarantee. They're not exactly flush with cash at the moment, either. Would appreciate any and all suggestions.
Their mortgage company paid $9000 to a foundation-repair company with a horrible reputation ('F' at the BBB) who totally botched the job, and actually left the site without completing the work (large, deep holes all around and underneath the home were left open, holes in the inside that had been jackhammered through the foundation were left open). They had to pay out of pocket to get the holes filled and have the break-throughs in the interior repaired.
Now they're experiencing movement again, just a few months later. The mortgage company tells them to talk to the foundation repair guy. He laughs and says he won't honor his warranty because 'the mortgage company was rude.' Tells them there's no way he's going to do anything for them, at all.
This is a young military couple. He's recovering from a serious back injury he received while deployed overseas, and is undergoing a battery of surgeries to get him back into shape. They also have a young child (just mentioning those things to give an idea of how sympathetic the homeowners would be if this ever went to court). They're also in the middle of adopting another child right now.
I'd love to be able to give them some advice and help them remedy this horrid situation, but I'm a bit at a loss as to how they should proceed. They do have photo evidence of all of the open holes that the foundation contractor left. They're also going to have a structural engineer come out to check the foundation (at my recommendation) so they have a professional opinion, should they need to take the issue to court.
Any further advice? I've thought about suggesting that they contact local news media - seems like a made-for-local-news human interest story. I know that pursuing something like this in court can be expensive and comes with no guarantee. They're not exactly flush with cash at the moment, either. Would appreciate any and all suggestions.
If they are military, I really hope that they have USAA insurance......if so, tell them to turn it over to them. They are AMAZING with stuff like this and will completely take care of them. IF not USAA (which they should have) their insurance company should be helping them...
posted by pearlybob at 1:14 AM on September 12, 2014 [2 favorites]
posted by pearlybob at 1:14 AM on September 12, 2014 [2 favorites]
If the contractor is legitimate they are bonded which means there is money to be had in pursuing a legal remedy which means contact a lawyer. Letterhead on nice paper does wonders to help contractors overcome their aversion to "rudeness". The mortgage holder paying $9000 is an indication of cuplability.
They are batting your friend back and forth like a tennis ball. This is work for a lawyer.
"I know that pursuing something like this in court can be expensive and comes with no guarantee."
This is not true, at all. The bond is a big fat target and most mortgage holders will weigh the cost of settling vs cost of defending a lawsuit. If the contractor is found liable their insurance rates will go up as well not to mention the damage to their reputation.
/Ten plus years working at law firms and asking them about this type of shit, ten plus years a remodeler, four years married to an attorney
This is likely solved with just a threatening letter.
posted by vapidave at 1:33 AM on September 12, 2014 [3 favorites]
They are batting your friend back and forth like a tennis ball. This is work for a lawyer.
"I know that pursuing something like this in court can be expensive and comes with no guarantee."
This is not true, at all. The bond is a big fat target and most mortgage holders will weigh the cost of settling vs cost of defending a lawsuit. If the contractor is found liable their insurance rates will go up as well not to mention the damage to their reputation.
/Ten plus years working at law firms and asking them about this type of shit, ten plus years a remodeler, four years married to an attorney
This is likely solved with just a threatening letter.
posted by vapidave at 1:33 AM on September 12, 2014 [3 favorites]
Response by poster: pearlybob: I suggested that she contact whoever wrote her homeowner's insurance policy.
vapidave: There's an excellent possibility that this contractor is not legitimate. There are plenty of guys with pick-up trucks, shovels and a handful of laborers picked up outside of Home Depot who just drive around and try to pressure sell jobs on the spot, with no actual company, contractor's license, bonds, insurance or anything else of the sort. It's a bit of a jungle. The cities are trying to crack down on it, but it's not an easy thing to police.
She is, however, talking to an attorney. It's just been my experience that, at least in Texas, this kind of negligent behavior from contractors isn't always easy to pursue all the way to a judgment that's actually paid out to the plaintiff, especially with so many fly-by-nighters out there.
posted by syzygy at 1:52 AM on September 12, 2014
vapidave: There's an excellent possibility that this contractor is not legitimate. There are plenty of guys with pick-up trucks, shovels and a handful of laborers picked up outside of Home Depot who just drive around and try to pressure sell jobs on the spot, with no actual company, contractor's license, bonds, insurance or anything else of the sort. It's a bit of a jungle. The cities are trying to crack down on it, but it's not an easy thing to police.
She is, however, talking to an attorney. It's just been my experience that, at least in Texas, this kind of negligent behavior from contractors isn't always easy to pursue all the way to a judgment that's actually paid out to the plaintiff, especially with so many fly-by-nighters out there.
posted by syzygy at 1:52 AM on September 12, 2014
Response by poster: Follow-up regarding the question of legitimacy:
It's almost certain this contractor didn't do the work legitimately. San Antonio requires a permit for construction work, including foundation repair. In order to close out a permit, the contractor has to have an engineer certify the work. I'm not aware of any engineers who would certify a half-finished job, where gaping holes were left open around and underneath the house, and were penetrations through the foundation inside the home were left unclosed. That's just to say that the standard legal remedies one might be able to use against a legitimate contractor may not be on the table in this case. As such, I've also advised my acquaintance to contact the city's permits and licensing office about this situation.
posted by syzygy at 2:18 AM on September 12, 2014
It's almost certain this contractor didn't do the work legitimately. San Antonio requires a permit for construction work, including foundation repair. In order to close out a permit, the contractor has to have an engineer certify the work. I'm not aware of any engineers who would certify a half-finished job, where gaping holes were left open around and underneath the house, and were penetrations through the foundation inside the home were left unclosed. That's just to say that the standard legal remedies one might be able to use against a legitimate contractor may not be on the table in this case. As such, I've also advised my acquaintance to contact the city's permits and licensing office about this situation.
posted by syzygy at 2:18 AM on September 12, 2014
In San Antonio you can pull a list of permits here. I tried my address and it looks reasonably complete back to 2007 or so.
posted by muddgirl at 3:20 AM on September 12, 2014 [1 favorite]
posted by muddgirl at 3:20 AM on September 12, 2014 [1 favorite]
IANAL, TINLA, but this homeowner definitely wants a consult with a lawyer—a full-blown court case might indeed be expensive, but getting a lawyer's take on this would be considerably less so and would probably provide good advice on their chances. For my part, from a wholly non-lawyerly point of view, it looks good: there's material injury here, and two entities who could plausibly be squeezed for money. If the repair company's legitimate,they're supposed to be bonded and the bond is a viable target. If the repair company is not legitimate, then I'd think the squeeze could be put on the mortgage holder (which undeniably has assets, and unlike a cash-in-hand contractor, isn't a moving target), because hiring an unlicensed contractor is inadvisable, unsafe, and possibly illegal.
posted by jackbishop at 5:41 AM on September 12, 2014 [1 favorite]
posted by jackbishop at 5:41 AM on September 12, 2014 [1 favorite]
syzygy: who selected the shady contractor?
posted by jayder at 7:07 AM on September 12, 2014 [1 favorite]
posted by jayder at 7:07 AM on September 12, 2014 [1 favorite]
This is solidly in "talk to a lawyer" territory. This seems to have progressed far beyond any hope for a reasonable solution if the contractor is laughing at them when they ask him just to do his job. The best thing they can do is to make sure they have plenty of pictures and document the entire process, preferably with names, dates and any notes from conversations with the contractor or the mortgage company. It's preferable to have notes taken at the time of the conversation, but detailed recollections are the next best thing.
I'm a professional engineer and a construction manager, and have dealt with some difficult contractors, but most of them will spring into action once you threaten their ability to bond work.
posted by Ham Snadwich at 9:15 AM on September 12, 2014
I'm a professional engineer and a construction manager, and have dealt with some difficult contractors, but most of them will spring into action once you threaten their ability to bond work.
posted by Ham Snadwich at 9:15 AM on September 12, 2014
Lawyer and homeowners insurance company.
But it's not typical for insurance or the mortgage company to be involved with house issues, unless there's some sort of insurance/warranty on the home.
Have your friends call their realtor and see what he/she has to say.
Texas has a building trades council. Call them and see to whom you should complain about this tradesman's terrible work. They may also have ideas about remedies and how best to pursue them.
posted by Ruthless Bunny at 9:36 AM on September 12, 2014
But it's not typical for insurance or the mortgage company to be involved with house issues, unless there's some sort of insurance/warranty on the home.
Have your friends call their realtor and see what he/she has to say.
Texas has a building trades council. Call them and see to whom you should complain about this tradesman's terrible work. They may also have ideas about remedies and how best to pursue them.
posted by Ruthless Bunny at 9:36 AM on September 12, 2014
Can you clarify why the mortgage company is involved with selecting adn paying the contractor?
posted by WeekendJen at 9:56 AM on September 12, 2014 [3 favorites]
posted by WeekendJen at 9:56 AM on September 12, 2014 [3 favorites]
IANAL: But seconding everyone else. This is clearly the mortgage company or foundation company's problem. Time to contact a lawyer.
posted by cnc at 10:03 AM on September 12, 2014
posted by cnc at 10:03 AM on September 12, 2014
Response by poster: muddgirl: Thanks - I should have thought of that. I checked on the address, and no permit was pulled for this work.
Everyone else: I believe the mortgage company selected and engaged the contractor. I have no idea why they got involved, especially given the fact that they don't seem to care whether the contractor they paid did quality work or even finished the job. My guess here is that the repair was baked into the mortgage agreement and/or the sales contract, and the new owner simply didn't think it was necessary to vet the contractor, trusting whoever selected the contractor to select a good one.
I communicated a number of these suggestions to the homeowner, and also turned her on to avvo.com as a potential place to find an attorney to work with. I appreciate all of the suggestions and will report back if I hear any updates from the homeowner.
posted by syzygy at 6:12 AM on October 2, 2014 [1 favorite]
Everyone else: I believe the mortgage company selected and engaged the contractor. I have no idea why they got involved, especially given the fact that they don't seem to care whether the contractor they paid did quality work or even finished the job. My guess here is that the repair was baked into the mortgage agreement and/or the sales contract, and the new owner simply didn't think it was necessary to vet the contractor, trusting whoever selected the contractor to select a good one.
I communicated a number of these suggestions to the homeowner, and also turned her on to avvo.com as a potential place to find an attorney to work with. I appreciate all of the suggestions and will report back if I hear any updates from the homeowner.
posted by syzygy at 6:12 AM on October 2, 2014 [1 favorite]
Response by poster: Another follow-up:
It seems there was a 30-day warranty of some sort from the mortgage company on certain components of the home. Before the 30 days were up, the new homeowner noticed a plumbing issue. The issue was covered under the aforementioned warranty, and the mortgage company paid another contractor to have it fixed. A leak sprung underneath the foundation as a result of the repair work. The leak went unnoticed for some period of time (weeks, I guess) which caused the soil underneath the foundation to expand. This soil expansion either created new or contributed to existing foundation issues.
The mortgage company agreed to cover the foundation repair, since the problems were related to the warranty plumbing work that they'd also paid for. After engaging a dodgy out-of-town company, owned by an individual who has started and shut down more than one foundation repair company in the past, and that, according to the BBB as of late August , 2014, is apparently no longer in business, the mortgage company washed their hands of any further responsibility. The foundation company doesn't appear to have been insured, bonded or licensed, and may not have been anything more than a DBA front for an unethical, one-man operation (plenty of complaints on the BBB and Angie's List for businesses owned by this individual).
At my recommendation, the homeowner spoke with an attorney who specializes in real estate matters. That attorney approached the mortgage company. The contact at the mortgage company flatly refused to do anything for the homeowner, and invited her to try her hand at suing them, alluding to the company's legal team, legal budget, and general unwillingness to settle cases out of court.
The homeowner's attorney does accept contingency cases, but is currently booked up, and other attorneys contacted by the homeowner have quoted prohibitively high hourly rates to take the case.
I advised the homeowner to try to talk to a few other attorneys, but she and her husband have tentatively decided to just take their lumps and move on, which includes paying a significant amount of money, out of pocket, to have someone else fix the foundation.
:-(
posted by syzygy at 7:47 AM on October 20, 2014
It seems there was a 30-day warranty of some sort from the mortgage company on certain components of the home. Before the 30 days were up, the new homeowner noticed a plumbing issue. The issue was covered under the aforementioned warranty, and the mortgage company paid another contractor to have it fixed. A leak sprung underneath the foundation as a result of the repair work. The leak went unnoticed for some period of time (weeks, I guess) which caused the soil underneath the foundation to expand. This soil expansion either created new or contributed to existing foundation issues.
The mortgage company agreed to cover the foundation repair, since the problems were related to the warranty plumbing work that they'd also paid for. After engaging a dodgy out-of-town company, owned by an individual who has started and shut down more than one foundation repair company in the past, and that, according to the BBB as of late August , 2014, is apparently no longer in business, the mortgage company washed their hands of any further responsibility. The foundation company doesn't appear to have been insured, bonded or licensed, and may not have been anything more than a DBA front for an unethical, one-man operation (plenty of complaints on the BBB and Angie's List for businesses owned by this individual).
At my recommendation, the homeowner spoke with an attorney who specializes in real estate matters. That attorney approached the mortgage company. The contact at the mortgage company flatly refused to do anything for the homeowner, and invited her to try her hand at suing them, alluding to the company's legal team, legal budget, and general unwillingness to settle cases out of court.
The homeowner's attorney does accept contingency cases, but is currently booked up, and other attorneys contacted by the homeowner have quoted prohibitively high hourly rates to take the case.
I advised the homeowner to try to talk to a few other attorneys, but she and her husband have tentatively decided to just take their lumps and move on, which includes paying a significant amount of money, out of pocket, to have someone else fix the foundation.
:-(
posted by syzygy at 7:47 AM on October 20, 2014
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posted by syzygy at 12:01 AM on September 12, 2014