By some estimates, the crumbling basement epidemic has the potential to reach 34,000 homes in Connecticut and destroy the financial security of hard working people who find themselves facing this crisis through no fault of their own. Sellers can’t sell. Buyers won’t buy. People can’t retire. Many sellers still will not come forward and file a complaint to establish themselves as a victim. Those most severely affected, Eastern Connecticut homeowners, constitute a large part of our market area and as residents ourselves, are our own neighbors, friends and family.
At Home Selling Team, we have daily conversations with potential sellers and buyers about best approaches in navigating this uncharted territory. As Realtors, our local boards and National Association have provided us with legal disclosures for buyers and sellers and as much guidance as they can in identifying our professional and fiduciary duties in this challenging environment. Putting your head in the sand and feigning indifference or ignorance of the problem is not doing the job we are hired to do.
That said, as of this moment (7/2021) this is what we know now and our recommendations to sellers who find themselves facing this devastating problem.
Possible Approaches for Sellers
Try to determine the source of the concrete. Was your home built between the years of 1983 and 2017? Is your home in one of the affected towns? Sellers should look for receipts or photos in their documents and check the town hall building department for any information about the construction. Check with a closing attorney for lien waivers which may reveal the contractors/vendors who were involved in the construction. Find your home inspection report from your purchase. Contact the builder, if known, to inquire.
If you suspect JJ Mottes may have been the provider of your concrete and/or you have visible signs of a crumbling basement you have the following options:
Contact a structural engineer for a visual inspection. See Qualified Vendor List. Inspections are a 100% reimbursable expense up to $400 at https://foundationtesting.org. but in order to receive the reimbursement, you must hire a structural engineer, not a CFSIC-trained home inspector. Core testing is only required when the engineer gives your home a Severity Rating of 1 (no visible evidence) and you (or a potential buyer) intend to apply for future CFSIC replacement funds. In other words, in order to file a CFSIC claim for a property with a Severity 1 Rating you have to prove (via a core test) that your concrete contains pyrrhotite even if you have confirmed that the concrete was supplied by JJ Mottes. If you do have a basement with a confirmed Severity Rating of 1 you will not be able to receive funding for replacement until your concrete deteriorates to a Severity Code of 2 or 3 which would have to be confirmed by a new inspection and at which time you would could apply to CFSIC for replacement funding or amend your existing Severity Code 1 claim to a Severity Code 2 or 3.
If you discover or have previous knowledge that your concrete did not come from JJ Mottes but you don’t have documentation to prove it. You may want to get a core test (50% reimbursable up to $2,000 at https://foundationtesting.org). You can provide the test results to any interested party and alleviate any trepidation a buyer may have about purchasing your home. Your sale will not be delayed waiting for an inspection if you can provide the documentation ahead of time. We recommend only taking his option if you are able to source your concrete from another supplier.
You can do nothing. Whether you suspect you have the problem or not, you can wait until you have a potential buyer who will be required (effective 2/1/19) to do a visual inspection or core test if they want to be eligible to apply for CFSIC funds to replace the foundation should it become an issue in the future. Buyers are not obligated to complete the test if they wish to waive the right to make a CFSIC claim in the future. HST office policy requires a seller to complete a CADSB-Concrete Advisory and Disclosure for Sellers & Buyers-7/17/2019. Contact us if you'd like a copy of the disclosure to review. There are many homes selling with confirmed existence of pyrrhotite in the foundation some with visible evidence and some not.
Have your property reassessed. See An Act Concerning Concrete Foundations. In most towns, if you have a confirmed crumbling basement and you want your property value depreciated and your property tax adjusted you will probably be required to:
- Have an engineer inspect and provide a report and a severity letter.
- File a complaint with CT State Department of Consumer Protection.
- File a claim with your insurance company and provide copy of acceptance or denial.
- Get a replacement quote from a contractor to replace your foundation (not required in all towns)
- Get these documents to your assessor. The assessor is required by law and has 30 days from the date of the request to inspect the foundation. A letter will be issued to you with your new assessment. Most assessors assess the depreciation using these guidelines provided by CRCOG.
- You should check with your town Assessor for specific requirements.
Options: Selling or Renting
Sell the home for what the market will bear. We can offer you a market analysis. It is difficult to ascertain what a selling price would be for a home with a crumbling basement. We have seen many sales for almost full market value with a home with an acknowledged crumbling basement. Most of these homes are fully habitable and the buyer's perspective may be the key. We can look at previous sales of similar homes with documented concrete issues and give you a ballpark but ultimately a buyer will determine what it is worth. Consult with a qualified tax accountant to see if you qualify for a casualty loss deduction. See Courtney-Larson tax press release. Casualty Loss defined.
Apply for CFSIC captive funds and sell your property once you have a registered claim. Effective July 13, 2020 and retroactive to June 1, 2020, all CFSIC claimants, active, inactive or pending can transfer your place in line for replacement funds to your buyer (buyer must commit to staying at least 12 months from Certificate of Occupancy prior to disbursement of any funds). More information about how to transfer a claim here.
The maximum benefit via CFSIC is $175,000. There may be an additional supplemental amount (up to $25,000) available through your insurance provider, so far, Travelers, the Hartford and Liberty Mutual have signed on to the collaborating insurers benefit program. A foundation replacement quote from a contractor will specifically identify what is not covered by CFSIC and what you will be responsible for out of pocket. If you have an expensive foundation to replace this option may be financially not feasible for the seller or the buyer without a large concession by the seller. There is a Supplemental Collapsing Foundation Loan Program to assist homeowners with repairs not covered by CFSIC funds. The maximum amount is $75,000 financed over 20 years. For more information click here.
Rent the home in one year lease terms until your active claim is in Particpation Agreement status and funding imminent. If the home is in otherwise good condition and safe you can rent it as an investment for a positive cash flow while you also have a reduced property tax burden.
If you have a large mortgage and the home is likely worth less than what you owe: Short Sale- Outcome unpredictable. Bill pending to protect homeowners from deficiency judgments when value is decreased by presence of pyrrhotite. Consult with an attorney.
Deed in Lieu Foreclosure-Outcome unpredictable. Bill pending to prohibit lenders from denying first mortgages to borrowers who lost their homes due to pyrrhotite. Consult with an attorney.
Who’s Who and the best resources for information:
CFSIC-CT Foundation Solutions Indemnity Company (Captive)
JJ Mottes/Beckers Quarry, Willington, CT -Source of faulty concrete
CT Coalition Against Crumbling Basements- CCACB Facebook Page:
Update on CFSIC funds: There is a lot of good news on this front! 321 families have been returned to their homes and to the tax roles. The previous sunset date for CFSIC has been extended indefinitely. Active Severity Code 2 homeowners will shortly be welcomed into the Participant Agreement phase of their journey. There are currently almost 600 pending claimants, who, effective July 2022, thanks to additional funding of $100 million in annual installments of $25 million will begin receiving help 3 to 4 years earlier than originally thought.
If you have an inactive claim with CFSIC you have 180 days from July 5,2021 to comply with the requirements to be an active claim or you will be removed from the program. If you have an active claim now and are not in complete compliance with CFSIC to move forward to the participation Agreement phase, you too will be removed after 180 days.
Click here for a video tutorial of the application process.
At this point, CFSIC is now authorized to operate through at least June 2029. Current funds are committed to the existing list of active and inactive claimants. If you have additional questions or need more information about other sales in your area, contact us.
If you are a buyer and looking for information regarding crumbling basements and purchasing please see our Buyers and Crumbling Basements page.
DISCLAIMER: The information contained on this website has been provided for informational purposes only, and Home Selling Team makes no representations or warranties, express or implied, as to the completeness or accuracy of the facts, presumptions, conclusions, methodology of preparation, or any other matters contained therein. By viewing any information contained on this website, all visitors to and viewers of this site expressly understand and agree that any information or materials provided on this site are provided only for the convenience of any such visitors or viewers in making their own examinations and determinations as to whether to engage in any real estate transactions, and, in doing so, visitors and viewers shall rely exclusively on their own evaluations and not on any materials supplied by Home Selling Team. Visitors and viewers are also expressly advised to conduct their own independent investigations and inspections of any property in which they might be interested, utilizing such experts as they, in their sole discretion deem to be necessary for an independent assessment of all liability and risk, with respect to any property. Visitors and viewers further agree that they shall ultimately rely only upon their own investigations and inquiries with respect to all such liability and risk, including, without limitation, all liability and risk with respect to the presence of crumbling foundations, in, on or around the Property.