R. Greg Andrews, Esq.

www.andrews.law

 

          The foundation of a house is as critical as the tires on a vehicle. Investing in a strong foundation for a home is the best way to protect a new investment and secure yourself from unnecessary financial burdens in the future.  The choice of which foundation to choose for a new home can be overwhelming to new homeowners due to the importance and longevity of the structure.

 

          A home’s foundation is classified as the load-bearing portion of the structure. Kit Layton discusses the crucial functions of a foundation by stating, “The three most important [functions] are to bear the load of the building, anchor it against natural forces such as earthquakes, and to isolate it from ground moisture” (Layton).  When a customer decides to build a home, choosing the type of foundation is one of the first decisions they are confronted with, which is then followed by a variety of other meticulous decisions. However, the advantages of certain foundation types greatly outweigh others, and the builder should be responsible for educating their customers on the best choice for their new investment.

 

          Things to consider when choosing the best foundation for a home are the appearance of the foundation, the durability of the structure, and the likelihood of facing future financial burdens.  A common foundation type is typically referred to by homebuilders as a Pier and Grade foundation.  Builders often choose this foundation type over other foundation types due to its lower cost and labor compared to other options.  However, it is imperative that both builders and new homeowners are knowledgeable about the durability and longevity of this foundation type compared to others on the market to select the best option for the most critical part of their new home. 

 

Pier and Grade Beam Foundation

 

          One type of a true Pier and Grade Beam foundation is elevated, which means it sits above the ground, and it encloses a crawl space. Contained within this crawl space are the plumbing, electrical wiring, and other utilities.  Concrete beams that support the exterior of the house and floor joists that are on wooden beams create this foundation structure. A true Pier and Grade Beam foundation, even one built with a slab-on-grade floor, can be a good foundation when built and constructed correctly.  I use the word “true” to describe these foundations as different from what is often being built around Oklahoma, which is some form of a hybrid-type Pier and Grade foundation that does not meet Oklahoma’s minimum standard requirements.  I will address this hybrid-type of Pier and Grade foundation in more detail later in this article.  However, to construct a true Pier and Grade Beam foundation, soil samples should be taken before construction begins. Soil samples are rarely taken for two reasons.  First, soil samples are somewhat costly, which therefore diminishes the homebuilder’s profit immensely.  Additionally, if soil samples were taken, many instances would prove that the soil cannot provide the bearing capacity needed and would, therefore, be prohibited. 

          Figure 1 below is a diagram by Robert C. Zahl, P.E., illustrating how a true Pier and Grade Beam foundation should be constructed to be code compliant (see Figure 1).  As can be seen from the diagram, for the foundation to be code compliant the bottom of the “grade beam” has to be at least 16 to 18 inches below the finish grade.  Zahl explains that “[t]he purpose of the footing (grade beam) being below the frost line is partially to help keep water from going under the house, but it is mainly to keep the ground under the house from freezing.”

 

 

 

 

 

 

 

 

 

 

 

Figure 1: True Pier and Grade Beam Foundation from: Zahl, Robert C., P.E., “Typical Pier and Grade Beam.” Zahl-Ford Structural Investigators & Consultants, n.d.

 

Hybrid Pier and Grade Foundation

 

          Unfortunately, the true Pier and Grade Beam foundation is not what is typically being used in Oklahoma.  Many homebuilders are instead using the cheaper, hybrid form known as the Pier and Grade foundation, to cut back on building costs, which ultimately lead to a more significant expense to the homebuyer for subsequent repairs.  Zahl explains that these cheaper foundations are not code complaint because “they are not being built with the continuous portion of the system below the frost line, and they are using the stem wall as the grade beam.”  Specifically, there is not a separate grade beam being trenched and poured prior to the stem wall forms being set. 

 

          These hybrid foundations that the builders are building are not keeping water from going under the house or keeping the ground under the house from freezing.  Zahl describes how he has personally investigated multiple homes, all built in different parts of the metroplex, where the bottoms of the continuous portion of the footings were not more than 4 inches below the exterior finish grade, and provided that “it is no wonder that the houses were having significant foundation movements within the first few months of occupancy.”

 

           Some engineers refer to them as either a “Pier and Grade foundation” or a “post-hole and stem wall system.”  I will refer to them in this article as a hybrid Pier and Grade foundation as they do not have a grade beam.  Regardless of their name, these hybrid Pier and Grade foundations have come under attack.  In some cities, such as Edmond, Oklahoma, they have been “outlawed” or prohibited.  The restriction is due to the fact that they are not being built in compliance with the applicable residential building codes.  The city of Edmond’s supervisor for commercial and residential building explained that these hybrid Pier and Grade foundations have been problematic due to issues regarding the frost depth not meeting the minimum requirements.

 

          Zahl echoed the City of Edmond’s sentiments on these hybrid Pier and Grade foundations stating, “[a] serious problem exists with many of the residential foundations that are being built today in central Oklahoma, in that they do not meet the minimum requirements of any of the local residential building codes” (Zahl).  Zahl asserts, “It seems that whoever decided that this system was a good way for builders to save money in the construction of a house overlooked the fact that the continuous portion of the foundation system, and not just the piers, needs to be below the frost line” (Zahl).  In various areas of Oklahoma the frost line is approximately 16” – 18” below ground level; however, in these hybrid Pier and Grade foundations this requirement is not met.  Builders market these hybrid Pier and Grade foundations because they save money in an area of the house that is easily overlooked since a home’s foundation is not an eye-appealing feature that is noticed at first glance.

 

          From a structural engineering standpoint, these hybrid Pier and Grade designs do not even really qualify as a true pier and grade beam system.  Zahl describes “the latest one that I have checked, which is almost identical to the others that I have seen, had 10 inch diameter piers that are 30 inches deep and are spaced 7 feet apart.  Using the 3000 pound per square foot (psf) allowable soil bearing value listed on the detail, this system will not even support the 2x4 wall framing and eight foot high exterior brick veneer that is shown on the detail.”  Figure 2 below is a diagram by Robert C. Zahl, P.E., illustrating how these hybrid Pier and Grade foundations are being constructed across Oklahoma that do not meet code (see Figure 2).    

 

 

 

 

 

 

 

 

 

 

 

 

Figure 2. Hybrid Pier and Grade Foundation Detail from: Zahl, Robert C., P.E., “Typical Pier and Grade Detail.” Zahl-Ford Structural Investigators & Consultants, n.d.

 

           

          During the building process, the foundation of a home is either inspected by the city to ensure that it complies with the residential building code or the builder must present the city with a foundation detail that has been approved and stamped by a licensed engineer.  As the hybrid Pier and Grade foundation does not comply with the residential building code and would never pass a city inspection, every municipality that allow them simply requires them to have an engineered-stamped foundation detail.  Possible reasons that municipalities require an engineering-stamped foundation detail on these hybrid Pier and Grade foundations are: (1) because they know they will likely fail a city inspection; and/or (2) the cities most likely do not want to accept responsibility/liability for passing them because they know the foundation system does not meet code requirements.  

 

          Zahl expressed his concern about the number of houses that are currently being built using this hybrid Pier and Grade foundation system by stating, “this is a situation that is creating great harm to unsuspecting home buyers in this area, and part of the reason that this is occurring is that people issuing the building permits for these foundations are relying on the details being furnished by the builders’ engineers, and these engineers are not providing code-compliant details.”  The reason for this concern centers around the fact that if a builder has an engineer-stamped detail of the foundation - even one that is not compliant with the applicable residential building codes - the city is not required to inspect and approve the foundation either during or after construction.

 

          Zahl stated that the answers he received most often from builders who are constructing these non-compliant systems are, “The City approved it as code-compliant, so we are using it,” and “everyone else is using it.”  From a legal standpoint, Zahl proclaimed “one of these days, I would not be surprised if someone actually files a lawsuit against one of the cities allowing this foundation system to be built, at least the way it is currently being done.”

 

          Figure 3 below is an actual engineer-stamped detail of a hybrid Pier and Grade foundation that does not meet code and was approved for construction as code-compliant. (see Figure 3).  As can be seen from the detail itself, this hybrid Pier and Grade foundation is not code-compliant.  I have redacted the name of the engineer and the location of the building for privacy purposes.

 

 

 

 

 

 

 

 

 

 

 

 

Figure 3. Hybrid Pier and Grade Foundation Detail Stamped by Engineer and Accepted by City as being Code-Compliant.

 

          Figure 4 below is another actual engineering-stamped hybrid Pier and Grade foundation detail that does not meet code and was approved for construction as being code-compliant. (see Figure 4).  As can be seen from the detail as well, this foundation also does not meet the minimum standard in Oklahoma.  Again, I have redacted the name of the engineer and the location of the building for privacy purposes.

 

 

 

 

 

 

 

 

 

 

 

 

Figure 4. Hybrid Pier and Grade Foundation Detail Stamped by Engineer and Accepted by City as being Code-Compliant.

 

Liability of the Homebuilder and Engineer

 

          “To date, there are several licensed professional engineers who have been formally disciplined, have surrendered their licenses, or have had their licenses revoked because they were involved with providing a stamped detail for this kind of foundation system to a builder or owner” (Zahl).  Therefore, not only should the builders and buyers be concerned with the longevity and future distress that a hybrid Pier and Grade foundation could cause, but also should have apprehension as to whether or not the engineer-stamped details of the structure have been properly analyzed and executed.

 

          Both the homebuilder and the engineer providing the stamped detail for these non-compliant foundations are potentially exposed to liability by the homebuyer.  Therefore, both the homebuilder and engineer should be very mindful of the foundation requirements in the local residential code.  More importantly, the homebuilder and engineer may face personal liability, as their liability insurance policies may not cover their improper foundation work.

The Homebuilder

 

            As for the homebuilder, the cost to repair a defective foundation is generally not covered by insurance.  Under a typical CGL (Commercial General Liability Policy), faulty workmanship can constitute an occurrence that triggers coverage under a CGL policy if: (1) the property damage was not caused by purposeful neglect or knowingly poor workmanship, and (2) the damage was to non-defective portions of the homebuilder’s work.  The common language found in a CGL policy is that coverage is not provided for property damage to that particular part of any property that must be restored, repaired or replaced because your work was incorrectly performed on it.  In short, Oklahoma courts have found that CGL policies are meant to cover faulty workmanship that leads to physical damage of non-defective property.  They will likely not cover the cost to repair the defective property (i.e. faulty foundation itself).

 

          What this means is that a homebuilder constructing one of these non-compliant Pier and Grade foundations will likely be personally liable for the costs to repair and/or correct the foundation so that it is code compliant.  That is because the foundation is defective and the restoring, repairing or replacement of the defective property itself is generally not covered by insurance.  In short, that homebuilder is exposed to the possibility of paying his or her defense and any judgment rendered out of their own pocket.  The engineer that stamped the detail will likely point the finger at the homebuilder for not obtaining soil samples prior to construction.  The result is the homebuilder is playing “Russian Roulette” with the homes built on these hybrid Pier and Grade foundations hoping that the one-year builder’s warranty will expire before the homeowner discovers the faulty foundation.

 

The Engineer

 

           As for the engineer, his or her placement of their engineer-stamp on a detail known to be non-compliant may be considered as an intentional, wrongful act on the part of the engineer.  The Oklahoma State Board of Licensure for Professional Engineers and Land Surveyors apparently agrees with this fact based upon their formal discipline of several engineers that were involved with providing a stamped detail for this kind of foundation system to a builder or owner.

 

          Most engineers maintain a professional liability policy to protect them from malpractice lawsuits against them.  However, as a general rule, it is against public policy for an insurance policy to provide coverage for the intentional or willful misconduct of an insured.  As a corollary, if the insurance contract explicitly excludes coverage for intentional, willful, and similar conduct, then that exclusion is not against public policy.  What this means is that an engineer that intentionally places his stamp on a detail known to be non-compliant with code may not have coverage under his or her professional insurance policy.  In short, that engineer is exposed to the possibility of paying his or her defense and any judgment rendered out of their own pocket.  The homebuilder will likely point the finger at the engineer for stamping the faulty foundation detail.

 

The Homebuyer

 

           As discussed above, the homebuilder and engineer are likely going to point the finger at each other for liability purposes.  The result is a nasty legal battle for the homeowner having to attack two separate fronts in court.  Something a homebuyer must remember is that obtaining a judgment against a homebuilder or engineer is only part of the battle.  Lack of insurance coverage for the homebuilder and engineer also directly affects the recovery by the homebuyer.    The most important part of the battle is collecting money to pay for the cost to repair the defective foundation.  If a homebuilder or engineer has to pay those costs out of their own pockets, there is a strong likelihood the homebuyer will never recover enough money to fix their faulty foundation.  There is also a possibility that by the time the homebuyer discovers the faulty foundation issues, which may be 5, 10 or 15 years down the road, the homebuilder and/or engineer are long gone.  This means THE HOMEBUYER IS LEFT FOOTING THE BILL!

 

Foundation Repairs

 

          Many homebuyers choose the Pier and Grade foundation due to the lower cost compared to other foundations. However, they do not consider the longevity of this structure as well as the likelihood of numerous problems in the future that can cause burdensome repairs.  The old adage, “you get what you pay for!” rings true in this context.  The expected cost when choosing a Pier and Grade foundation is $10,000 - $30,000 depending on the size of the home.  However, the average cost for repairing minor issues with a foundation is $3,993 and major issues can cost $10,000 or more (“Estimated Costs to Fix Foundation Problems”).  Pier and Grade foundations are proponents for numerous problems, however; and as Zahl explains, the most likely issues to occur are upheaval and settling. The article entitled “Estimated Costs to Fix Foundation Problems” asserts that settling “signals that your soil is shifting or responding to moisture, and wood decay.”

 

         Oklahoma is known as “red dirt country.”  It is the clay in the Oklahoma soils that make it red, and that clay found in Oklahoma’s soil is extremely reactive to moisture.  It is a simple equation: when the clay becomes wet, it expands; and when the clay loses moisture, it contracts.  It is the constant expansion and contraction of the clay soils that result in most foundation issues.  The most frightening part of the earth settlement issue in Oklahoma is that it is generally not covered under a homeowner’s insurance policy.  Under Oklahoma law, damage caused from earth movement - regardless of the cause and role of natural or external forces - can be excluded from insurance coverage under an “earth movement” clause in a homeowners’ insurance policy.  This means those repair costs are placed directly upon the homebuyer because not only is it not covered by insurance, but the one-year builder’s warranty most likely also excludes earth movement/settlement damage. 

 

           In the instance that the homeowner has the financial means to repair their home, “the issues are often compounded and not fixed” (Zahl). For example, many homeowners have companies come in and pier their home by elevating the structure even though the original cause of the problem was due to water drainage.  This leaves the homeowner paying thousands for a quick fix for their foundation issues to only be left with larger issues in the future.  In discussing foundation repair companies, Zahl stated they “are there to sell piers, but 95% of the time that is not what [the homeowner] needs.”  Zahl added that “some leveling companies have an engineer involved, but most of them do not,” and in his opinion that is a violation of the engineering laws by practicing engineering without a license.  Simply put, DON’T GET JACKED UP!

 

          To give the reader an idea of the foundation problems we are having in Oklahoma, I recently took the deposition of a leveling company representative and was told that his company averages more than 700 installed piers per month in central Oklahoma alone!  At a cost just south of $1,000.00 per pier, you can see how that can add up very quickly for a homeowner. 

 

          What may be even more problematic than the out-of-pocket cost to pier a home is the potential diminution in value of the home itself after it has been repaired.  I have spoken with realtors that have said not only can it make a home harder to sell, but also some potential buyers will not even look at a house that has been repaired with piers as it represents a damaged home.  Think of it as purchasing a used vehicle that has incurred prior damage – are you more or less likely to purchase that vehicle at full retail, or even at all?  Zahl believes “it depends on what caused [the foundation problem], what is really done when they lift it, and who you talk to.”   Some courts agree, finding that the diminished fair market value is a correct measure of damages to a home suffering from foundation issues as it can decrease the value of a home.

 

Alternative Foundation Choices

 

          One way to eliminate a cost-cutting builder or potentially unethical engineer is to choose a foundation system that is inspected by the city both during and after construction to ensure that it complies with the applicable residential building codes.  An example of such a foundation is a Footing and Stem.  In addition to being code-compliant, a Footing and Stem foundation is one that proves to have substantially fewer problems for homeowners than a Pier and Grade foundation.  In fact, Zahl stated “very seldom” does he find foundation problems associated with a Footing and Stem foundation, and when he does it is “typically from the builder failing to properly compact the fill material on top of the existing grade.”   Zahl added, “and that’s the only situation where coming in and doing a post-construction pier jacking situation helps.”

 

          Another reason to choose a foundation other than a Pier and Grade is aesthetics.  One of the main concerns for a customer in building their new home is the appearance.  Since there is no exposed concrete around the perimeter of the home, Footing and Stem foundations are more appealing cosmetically.  An easy way to distinguish a Pier and Grade foundation from a Footing and Stem foundation is by merely looking at the outside base of the house.  A Pier and Grade foundation will frequently have a large, unsightly grey concrete border around the bottom of the exterior of the house.  A Footing and Stem does not.  Additionally, a Footing and Stem foundation features a concrete slab, a stem wall, and footings or concrete pads, which are anchored into the ground.  The footings provide extra security against damage due to soil changes.   Figure 5 below shows what a Pier and Grade foundation generally looks like. (see Figure 5).

 

 

 

 

 

 

 

 

 

 

 

Figure 5. Exterior Photograph of House Built Using a Pier and Grade Foundation.

 

          Figures 6 and 7 below show a closer look at the foundation of the house depicted in Figure 5 above.  As can be seen from Figures 6 and 7, the bottom of the continuous portion of the footings is not more than 4 inches below the exterior finish grade.  This Pier and Grade foundation is not code-compliant, because the bottom of the “grade beam” is not at least 16 to 18 inches below the finish grade (see Figures 6 and 7).

 

 

 

 

 

 

 

 

 

 

 

 

Figure 6. Close-up Photograph of a typical Pier and Grade Foundation.

 

 

 

 

 

 

 

 

 

 

 

Figure 7. Close-up Photograph of a typical Pier and Grade Foundation.

 

          The article “What is a Stem Wall” notes the benefits of a Footing and Stem foundation by asserting, “The main benefit of a stem wall is that it helps to prevent structural damage.  In areas prone to floods and storms, a building is more likely to remain structurally sound where the water moves around the structure rather than penetrating it.  Ingress of water can cause the foundation to lift which makes the building more susceptible to strong winds resulting in movement, cracking and subsidence” (“What is a Stem Wall”).

 

          The Footing and Stem Foundation detail depicted in Figure 8 shows how it is constructed below the frost line.  This type of foundation is inspected by the city both during and after construction and is code-compliant.  The detail also shows the sturdiness of the foundation (see Figure 8). 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 8. Footing and Stem Foundation Detail from: Zahl, Robert C., P.E., “Typical Continuous Footing W/ Stem Wall & Floating Slab.” Zahl-Ford Structural Investigators & Consultants, n.d.

 

          Foundations other than Pier and Grade are more costly due to the increased labor, materials, and excavation that they require, but this should not steer homebuilders or homebuyers away from choosing this option for numerous reasons.  By selecting a foundation like a Footing and Stem, a homebuilder or homebuyer reduces the risk of sagging and shifting beams, cracking exterior piers, damp crawlspaces, and mold and mildew in beams.  It also reduces the potential for future costs associated with having to install piers to support a failing foundation, as well as damage caused by a failing foundation such as repairs to the plumbing, roofing, drywall, and brick facades.

 

Conclusion

 

          With all of the foundation choices out there, it is imperative that a homebuilder and homebuyer explore the pros and cons of each and not just settle on a Pier and Grade foundation because it is cheaper to build.  Most importantly, the Pier and Grade foundation does not comply with the local residential building codes and should not be built – period.  At the very least, the risk of potential liability and personal exposure to the homebuilder and engineer for providing engineer-stamped foundation details that are known to be non-compliant with code should prevent their usage.  From a homebuyer’s standpoint, the potential future costs associated with these Pier and Grade foundations should be enough to eliminate them from consideration.

          I plan on looking into the files of those engineers that have been disciplined by the Oklahoma State Board of Licensure for Professional Engineers and Land Surveyors to hopefully learn what the Board believed they specifically did wrong compared to those engineers that are still currently providing stamped details of non-compliant foundations.  I also plan to inquire of the Board itself to discover how this type of Pier and Grade foundation is being built in Oklahoma if it does not meet the minimum requirements of any of the local residential building codes.  Any questions or comments can be directed to me personally, at info@andrews.law.

 

Works Cited:

 

“Estimated Costs to Fix Foundation Problems.” Home Advisor, n.d.

https://www.homeadvisor.com/cost/foundations/repair-a-foundation/. Accessed 30 Aug. 2018.

 

Layton, Kit. “Purpose of a Building Foundation.” Hunker, n.d.

https://www.hunker.com/13402461/purpose-of-a-building-foundation Accessed 30 Aug. 2018.

 

“What is a Stem Wall.” Do It Yourself, n.d.

 https://www.doityourself.com/stry/what-is-a-stem-wall Accessed 30 Aug. 2018.

 

Zahl, Robert C. “A Dilemma in Residential Foundation” Board Bulletin (2007): 1-12. Ok.gov.

Web. Accessed 5 Sep. 2018.

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