Worthless Foundation Repair Warranties

“Virtually every foundation repair company in Houston would go bankrupt if they had to refund the money from their failed foundation repair jobs,” declared Martin Dawson of Dawson Foundation Repair. “The majority of their jobs will fail in less than ten years and usually a lot sooner. The reason is that they use a low cost, low quality repair method that is very profitable for the repair contractor. The structural engineers at A-1 Engineering have described the repair method of stacking concrete cylinders one on top of another as ‘temporary’ and ‘useless’. And the warranties these companies offer their clients border on fraud. The language used by some of them is so ambiguous that virtually any situation would qualify for one of their exclusions.  Oh, and don’t get me started on the racket they call Mandatory Arbitration,” stated Mr. Dawson.

Broken concrete cylinders used in a low quality foundation repair method

What Is The Warranty On A Foundation?

Most foundation repair companies in Texas offer a “limited” lifetime warranty on their foundation repair and leveling work.  Among other shortcomings the homeowner is usually required to pay the cost for adjustments to the installed stacks of concrete cylinders. Usually the cost is $75 to $100 per stack.  So a house that had 20 stacks installed may end up with a $2000 invoice for adjustments. Unfortunately the same house may need adjustments every 1 to 5 years. The National Foundation Repair Association has stated: “Since many foundation repair companies require homeowner maintenance as a condition of their warranty agreement, compliance is also good business and one of the best insurance policies available.” The Foundation Repair Network has stated: “Warranties or guarantees for foundation repair work are very important, so pay close attention to their terms”.

Is Foundation Repair Covered By A Home Warranty?

Short answer is NO. Home warranties usually cover events that are sudden and unpredictable – a catastrophic event. Catastrophic events like floods and hurricanes are excluded from home warranties. Foundation damage, however, is easily predictable and usually occurs over a period of time. Given the fact that all homes in the Houston area rest upon clay soils they are all at risk and most show signs of foundation movement and damage after ten years or sooner.

Foundation Repair Warranty Exclusions

“Exclusions in foundation repair contracts are used to baffle and confuse the home owner. If you read them carefully you will realize that almost every situation is excluded from the warranty. For example, one large contractor has excluded ‘any movement of the foundation not due to settlement’. That means the contractor is NOT going to warrant his work when the soil expands in volume and heaves upward and he is NOT going to warrant his work if the soil expands or contracts horizontally.  Well there are only three directions the soil can expand and shrink (up, down, horizontally) and the warranty excludes two of them.  Another part of the contracts excludes soil movement due to ‘other causes’. All these exclusions are designed to protect the contractor from shoddy work or a failed foundation repair method. Good luck with that warranty,” commented Mr. Dawson. If the homeowner doesn’t like the contractor’s response then the next step is usually Mandatory Arbitration.

Soil movement causes foundation damage and damages throughout the house.

Mandatory Arbitration In Foundation Repair Disputes

“If arbitration were in any way beneficial to consumers, it could be made an option and consumers would choose it.” Richard Alderman, Director, Consumer Law Center, University of Houston Law Center

Mr. Dawson has a point about Mandatory Arbitration. The general public has been sold on the idea that it is a cost saving and fair system to settle disputes. It is not. When there is a dispute between a company and a consumer the contract between the two usually requires Mandatory (Forced) Arbitration. It is a “stacked deck” that overwhelming favors the company. First the company has the right to hire the Arbitration Company, which is a for-profit company.  That is an immediate conflict of interest. Then the list of consumer disadvantages comes into play. Arbitration costs are usually higher than court costs and arbitration fees and costs imposed by the arbitrator can bludgeon an adversary.  Arbitrators are not required to be lawyers and the only qualification of many is a training course. In addition, there is NO requirement for an arbitrator to publicly disclose the reasons for their decision.  The consumer also forfeits certain legal rights under Mandatory Arbitration including the right to appeal a decision made in arbitration.

Restrictions on Transfer of Foundation Repair Warranties

Many companies impose severe restrictions on the transfer of a foundation repair warranty from a previous homeowner to a new homeowner.  Failure to follow these strict rules will automatically void the warranty. For example both the new owner and previous owner must sign a transfer form BEFORE the sale of the property. And the contractor must be paid a transfer fee within 90 days.

Compare Foundation Repair Methods

There are very distinct differences in the foundation repair methods used by different contractors. All of the common methods have the same basic concept – stack one concrete cylinder on top of another and hope that they are pushed in vertically to support a house or building.  Drilled Piers or Bell Bottom Piers are built as a single unit which gives them much more strength and weight bearing capacity. It is considered a permanent solution for a cracked foundation.

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