Avoiding Litigation: Foundations

By Keith Swift, PhD
InterNACHI member/InterNACHI Report Writing Consultant
President, Porter Valley Software
The word foundation is a timeless metaphor of strength and security, and people quite naturally have genuine concerns about the foundations on which their homes rest. For this reason, people need to be educated about foundations in general and specific types in particular, and I include such information in every report. This is what I include about slab on-grade foundations, and you are welcome to use all or any part of it that you might find useful.

This residence has a bolted, slab foundation. Such foundations are the most modern, but they can vary considerably from older ones that have no moisture barrier beneath them and no reinforcing steel within them to newer ones that have moisture barriers beneath them and adjustable reinforcing steel within them. This type is called a post-tension slab, but is often impossible to distinguish one slab type from another in which even the size and spacing of the bolts can vary, although most are concealed. Our inspection of slabs conforms to industry standards. We examine the visible portion of the stem walls on the exterior of the structure for any evidence of significant cracks or structural deformation. However, we do not move furniture or lift carpeting and padding to look for cracks, and we do not use any specialized tools or measuring devices to establish relative elevations or determine any degree of differential settling. Significantly, many slabs are built or move out of level, but the average person would not realize this until there is a difference of more than one inch in twenty feet, which most authorities describe as being tolerable. Interestingly, many slabs are found to contain cracks when the carpet and padding are removed, but there is no absolute standard for evaluating them. However, those that are less than 1/4" and which exhibit no significant vertical or horizontal displacement are not regarded as being structurally threatening. They typically result from common shrinkage, but can also be caused by a deficient mixture of concrete, deterioration through time, seismic activity, adverse soil conditions, and poor drainage, and if they are not sealed they can allow moisture to enter a residence, and particularly if the residence is surcharged by a hill or a slope, or if downspouts discharge adjacent to the slab. However, in the absence of any major defects, we may not recommend that you consult with a structural engineer or a foundation contractor, but this should not deter you from seeking the opinion of any such expert, and we would be happy to refer one. 

A similar narrative appears with raised foundations. Such narratives not only educate clients but also sensibly limit the responsibility of inspectors, who are not geo-technical specialists and should not be expected to accept the responsibilities of a specialist. For instance, how many inspectors are likely to be aware that American builders continued to use an inferior sand-lime mixture for many years until the development of pressure testing at the turn of the twentieth century proved that Portland cement, which was invented by an Englishman in 1824, was vastly superior. It was simply a case of a cultural bias. All foundations are not equal. I have poked my finger into some that were built at the turn of the twentieth century that had the consistency of a crumb cake. This is why informative narratives are essential, and why any defect in the components of a foundation needs to be carefully documented, and why I favor the use of computer-generated narrative reports, in which an inspector can store endless amounts of narratives that can appear with a simple click of a mouse. And these same narratives can also be used as a reference library in which inspectors can look up information that they could not possible hope to remember. But let’s consider the common issue of cracks in a slab foundation.

Some inspectors may be inclined to believe that small cracks, which are typically the result of shrinkage, are not worth noting. However, consider the following case involving a house with slab on-grade foundation in a neighborhood with no apparent geological issues, no cracks in the streets, no broken curbs, nothing. The house had been completely renovated, and appeared to be in perfect condition. It was tastefully furnished, and had a new roof, new windows, new doors, and new carpeted and tiled floors, to name the major improvements. The only visible blemishes were cracks in an old patio slab that could have resulted years earlier, due to the absence of expansion joints, the installation of which was not in common practice when the house was built.

A year later, a specialist evaluation of the same property confirmed that expansive soils were raising and lowering the house as though it were floating on water, and in a sense it was. Doors had shifted out of square, and cracks radiated from every opening. A lawsuit revealed that the seller, who also happened to be a real estate agent, had acted as his own contractor and failed to disclose that he had renovated the house without permits, and obviously to cover latent structural movement. You wouldn’t think that an inspector could be blamed, but one was. It cost him his substantial deductible, and to make matters worse his insurance carrier elected to settle the case and then cancelled his policy, adding to the long list of legal decisions that fly in the face of common sense and make a mockery of justice. Needless to say, every inspector would do well to caution their clients about cracks in any hard surfaces. Some cracks in patio slabs, walkways and driveways, are not necessarily a cause for alarm. They result from moderate ground movement, which builders try to accommodate by cutting in expansion joints at every eight feet or so, but inspectors should never make assumptions about such things. They should at least inform their clients about them, and recommend that they seek a second opinion.  Every crack is a potential lawsuit, for which reason I always select a narrative that alerts my clients to cracks, such as the following:

There are cracks or unsquare openings within the residence that are indicative of movement, which could be attributable to common settling or seismic activity. However, inasmuch as structures can move more or less continuously in the presence of expansive soils, and we cannot rule this out, you should be aware that only a geologist or geo-technical engineer could predict further movement. We can elaborate on this issue if you wish, but you should consult with a specialist.

If you feel confident that the cracks you are observing are not particularly significant, you may wish to soften such a narrative or not even use one. Many inspectors believe that less is best, and depend on their standards to protect them. I used to, but now I believe that educating my clients affords me the best protection against litigation. However, this is a difficult decision, like that of whether or not to quote codes. For instance, I commonly find intermediate floor framing that has been notched or otherwise modified, and I’m not willing to let go of it because another inspector or contractor may choose to make an issue of something that I considered trivial, but which would nonetheless leave me liable So I’ll select a narrative such as the following: “Whereas it is permissible to pierce intermediate floor framing, the holes should be no larger than one-third of the depth of the material and drilled no closer than two inches from the upper or lower edges. Also, although the framing may be notched, the notch should be no deeper than one-sixth the girder depth, and never in the middle of the span.”

Considering the enormous amount of technical information that inspectors need to be aware of, the specific details in this narrative serve as part of a portable reference library. Some inspectors may not wish to provide such detailed code information, fearing that if they quoted code in one instance that they could be held accountable for other
code issues, which inspectors typically disclaim. However, some inspectors are prepared to go beyond the recognized standards of the industry. Nonetheless, every inspector would do well to remember that foundations, together with grading and drainage, generate more real estate lawsuits than anything else. The truth is that there is no absolute standard for evaluating cracks and, inasmuch as most cracks are the result of structural movement, each should be identified and described and recommended for further evaluation.

Vertical cracks in foundation walls are relatively common, and typically result from shrinkage. However, those in the above pictures that were taken from inside a garage are probably seismically related, but not everyone agrees on the significance of such cracks. And when money is involved, opinions can range from rational to ridiculous. A veteran foundation contractor that I once knew paid little attention to such cracks unless there was a significant degree of rotation, but that was in a less litigious era. He would explain how they occur and sometimes pacify his nervous clients by explaining that he had to crawl through an eighteen inch crack in the stem wall, meaning the screened foundation access hatch, to enter the crawlspace. However, there are issues besides cracks that inspectors need to be concerned about. For instance, if the soils around a foundation extend above the footing and do not slope away for a distance of at least six feet, structural problems could result, as you can see from the picture of a foundation wall that was taken from inside a crawlspace. Soils were piled high on the outside of the stem wall that allowed moisture to pond, penetrate, and eventually deteriorate the concrete to a point that exposed the rebar, as you can see from the picture.
Shrinkage cracks are common in slab foundations, and are usually quite small. However, it is not unusual to find larger ones where the slab meets the footing. These are referred to as cold-joint separations, and are usually not discovered until carpeting and padding are being replaced. Because of their size, they can seem structurally alarming but they’re really not and are easily repaired with non-shrink grout. However, people have been reported to become hysterical, believing that their house is about to fall down, or that the seller had deliberately concealed defects that the inspector should have magically known existed. It’s a recurrent nightmare for those inspectors who have tried to convince a disgruntled client that such cracks have little significance. The truth is that all cracks are structural but not all of them are structurally alarming, and people really do need to be educated and cautioned about them, no matter how small, in which case their response is likely to be rational instead of hysterical.

I was told of one case in which an inspector had to hire a structural engineer to make a point about a concealed cold joint separation, but even after being informed by the engineer that the crack was of no structural significance, the client still sued the inspector in Small Claims Court. Naturally, the inspector hired the engineer to represent him again, and fortunately common sense prevailed and the inspector won, or did he? He had to pay the engineer twice, and wasted the whole day in court when he could have been elsewhere doing inspections and earning money. True, the judge might have ordered the plaintiff to pay the inspector’s costs, but this would have been unusual, and no one should be foolish enough to believe that justice always prevails. For instance, insurance companies are in the business of making money, and if they can spend ten thousand dollars to settle a lawsuit against an innocent inspector, rather than twenty thousand defending him, they will. This is clearly unjust, because an inspector’s reputation can be discredited, his insurance premiums increased, and a similar claim could result in his policy being cancelled. Unfortunately, that’s the price that we must pay to be inspectors, and why computerized report-writers are rapidly replacing paper check-sheets.

We should not leave the subject of foundations without talking about sloping floors. Some floors are built out of level, and some are caused by differential settling, which is a result of weight bearing down on footings situated in soils that are either inherently unstable, inadequately compacted, or have become destabilized by moisture. Significantly, most builders pay little attention to weight, and could only guess at the weight of a house, whereas a shipwright could tell you down to the last pound what a ship weighs. Consequently, houses do have a tendency to settle, usually listing to one side, or settling more or less equally on opposing sides, which leaves floors crowned in the center. Although some inspectors carry marbles to test for sloping floors, they often regard such evidence as being of little consequence. Similarly, many structural engineers agree that one inch of slope in twenty feet is tolerable, and report that differences in elevation are typically not noticed until it exceeds this. However, the trouble with such reasoning is that when attorneys become involved common sense goes out the window, and mercenary experts can always be found who would be willing to testify that an inspector had been negligent. And now that the vast majority of home inspectors have deep pockets, in the form of errors and omissions insurance, they can no longer rely on the distinction of having common sense. Some states are notoriously more litigious than others, but let me end this topic by acknowledging that I would never do an inspection without carrying a laser level, and that I certainly wouldn’t depend on a contract or a standard industry disclaimer to defend myself. Inspectors willingly accept an enormous responsibility when they evaluate properties and, for the most part, for a fraction of the cost that structural engineers, geologists, and other specialists are paid, and for this reason alone they should never leave themselves vulnerable to litigation. The golden age of home inspections, when deals were cinched with a handshake, has long past.
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