CT: Taxpayers could help pay for defective crumbling foundations of HOA homes, condos

By Deborah Goonan, Independent American Communities

Today’s post is an update on a serious problem for homeowners in Connecticut — what to do about their crumbling foundations.

The problem is widespread in the state, affecting thousands of homes with concrete foundations that were poured in the mid-1980s-1998 by contractors supplied by J.J. Mottes Concrete Company. According to state’s construction experts, the cause of foundation failures is traced to the presence of a mineral in the concrete mixture – Pyrrhotite – that starts to expand and break down the structure of the concrete after roughly 15 years, resulting in premature failure of home foundations.

The problem is even more vexing for condominiums with shared foundations, not only because of the expense, but also the due to the complication that all members must agree to pay their fair share for the rebuild.

But local governments are also concerned about widespread loss of property values in their affected districts. If thousands of homeowners are unable to afford to rebuild their foundations (at a cost of $150,000 – $200,000), property tax assessed values will decrease, resulting in lower tax revenue for municipalities.

And then there’s the moral concern — some say that one important role of state government is to assist its constituents in need.

The Connecticut state Legislature is seeking a solution that involves addition of a surcharge (somewhere between $10-$20) on all homeowner’s insurance policies, and the creation of a government agency to disburse statewide funds to property owners seeking assistance to replace their foundations.

However, the bill seems to have stalled in Senate committee as of May 2017.

Track SB 806:
www.cga.ct.gov/asp/cgabillstatus/cgabillstatus.asp?selBillType=Bill&bill_num=SB00806&which_year=2017

However, in 2017, Connecticut General Assembly was successful in establishing a Crumbling Foundations Assistance Fund to allow $100 million in bonding over the next five years, with funds earmarked for assistance to affected homeowners.

Meanwhile, at the federal level, Connecticut Senators Richard Blumenthal and Chris Murphy have introduced the Aid to Homeowners with Crumbling Foundations Act, that would allow affected property owners to apply for a FEMA grant to help cover the cost of rebuilding their foundations. The bill proposes to create a $100 million grant through HUD, that would be for exclusive use of assistance to homeowners with failing concrete foundations affected by pyrrhotite.

According to the proposed Act, individual states would be eligible to apply for a maximum of $20 million grant, between the years of 2019 and 2023. The funds could be used by state agencies to aid owners of residential single family homes and multifamily properties of up to 4 units, includind condominiums.

Larger condominium associations and commercial properties would not qualify for a grant or other financial assistance under the Act.

Read Aid to Homeowners with Crumbling Foundations Act:
www.murphy.senate.gov/download/crumbling-foundations

Both state and federal bills are politically unpopular, critics say, because they force consumers and taxpayers to pay for remedies to what they view as construction defects for one particular group of property owners.

The issue affects only Connecticut and Massachusetts homeowners within a 20 mile radius of the former J.J. Mottes concrete supplier.

Insurance companies continue to deny homeowner claims for their failing foundations, insisting that insurance policies only cover “sudden” collapse of a foundation, but not a gradual failure due to the use of defective materials, or improper construction practices. Most insurance companies chose to exclude coverage for crumbling foundations after the cause of failure was discovered to be presence of pyrrhotite.

Connecticut State lawmakers vow to continue to pressure insurers to cover the costs of rebuilding foundations, citing the fact that millions of homeowners have paid insurance premiums for years.

In Crumbling Foundation Crisis, Speaker Vows To Help Some Homeowners With a Tax on All

by Jack Kramer and Christine Stuart | Apr 19, 2018 5:30am

HARTFORD, CT — House leaders gave the crumbling foundation issue a boost Wednesday when they pledged to schedule a vote on a $10 fee for all Connecticut homeowners.

The concept of a surcharge on homeowners had already been defeated, but it was recently resurrected as an amendment to another bill this week.

“The $10 surcharge on insurance policies is something we are ready to move forward on,” House Speaker Joe Aresimowicz, D-Berlin, said Wednesday. “This will happen before we leave,” referring to the end of the current session on May 9.

Earlier this year, a bill aimed at making insurance companies cover the cost of crumbling concrete foundation was voted down in the Judiciary Committee.

That bill would have added a $20 fee on all Connecticut homeowners.

Aresimowicz said if the $10 bill passed it would be his desire to have a regulated body disburse the millions of dollars the surcharge raises to ensure it goes directly to the owners of homes with crumbling foundations. The state is in the process of setting up a captive insurance company to begin to handle claims from homeowners staring at six-figure bills to replace their foundations.

Read more:

www.ctnewsjunkie.com/archives/entry/20180419_speaker_vows_relief_for_some_homeowners/

Blumenthal, Murphy sponsor bills to help homeowners with crumbling foundations

By: ANA RADELAT | April 25, 2018

A crumbling foundation

Washington – Connecticut’s U.S. senators on Wednesday introduced a pair of bills aimed at helping homeowners with crumbling foundations, but conceded it will be an “uphill fight” to win congressional approval of the legislation.

The Aid to Homeowners with Crumbling Foundations Act introduced by Sen. Chris Murphy and co-sponsored by Sen. Richard Blumenthal would provide up to $100 million over five years from the U.S. Department of Housing and Urban Development (HUD) to states like Connecticut that have created programs to help damage to residential structures built with concrete containing pyrrhotite, a mineral that expands with moisture and causes foundations to bow and crack.

About three dozen towns in north-central and northeastern Connecticut have foundations built with concrete containing pyrrhotite from a quarry in Willington.

Last year, the Connecticut General Assembly established a Crumbling Foundations Assistance Fund to allow $100 million in bonding over the next five years to assist victimized homeowners.

The Crumbling Foundations Small Business and Homeowners Assistance Act would create a new $100 million grant program within the Federal Emergency Management Agency, an agency that has rebuffed Gov. Dannel Malloy’s requests for help for affected homeowners.

If the legislation is approved, qualified homeowners would apply to FEMA directly for a grant.

Read more:

ctmirror.org/2018/04/25/blumenthal-murphy-sponsor-bills-help-homeowners-crumbling-foundations/

Previous Posts:

CT HOA did not disclose crumbling foundation problem  (March 5, 2016)
Can condo owners afford to reconstruct defective concrete foundations? (Dec. 19, 2016)

 

Advertisements

Have something to say? Share with other readers!

This site uses Akismet to reduce spam. Learn how your comment data is processed.