Renée Healion Appraisals & CT Appraisal Review

An unfolding disaster for Connecticut homeowners & towns

As many as 34,000 home foundations in Eastern Connecticut may be failing. A quarry in Willington, Connecticut was a longstanding source of aggregate used in concrete for building construction. The quarry contained a vein of the mineral pyrrhotite, which contaminated the aggregate, and so, the concrete used in foundations. In time, the mineral reacts with water and air, causing the concrete to crumble and foundations to fail.

The quarry’s products were used in an estimated 20,000 residential construction projects over 30 years. In some towns, dwellings comprising 30% of its taxbase were built during the years of most concern, 1983-2013. And recently, some municipal buildings were found to be affected, necessitating replacement.

Repairs proved ineffective. Replacement of the foundation is costly but the only currently effective solution. The process involves detaching accessory structures and utilities, lifting the house structure, demolishing the defective foundation and pouring a replacement foundation.

Homeowner claims were denied by insurers. FEMA declined assistance.

Homeowners formed grassroots organizations to advocate for assistance and provide information (see Coalition links below). The State of Connecticut Insurance Department warned insurers not to cancel insurance based on such a claim. US Representatives Joe Courtney and John B. Larson, with the support of US Senators Richard Blumenthal and Chris Murphy, obtained income tax relief for homeowners which now may span several years, and have sought HUD funding. The Capitol Region Council of Governments (CRCOG) assists towns and homeowners with pertinent information and its site is frequently updated.

The Connecticut legislature passed a bill which the Governor signed implementing the collection of a $12 surcharge on every homeowner insurance policy to fund a captive insurance entity to distribute funds for relief, almost entirely for crumbling concrete foundation owners (CFSIC). The surcharge should raise about $9 million. The state is authorized to borrow about $100 million. Remediation costs are likely to exceed $1 billion (source: CT Mirror, Mark Pazniokas, 5/5/2018 link below).

The Connecticut Foundation Solutions Indemnity Company (CFSIC) was created as a solution for handling documented homeowner claims. It is a captive insurer, in that it is not a conventional insurance company, but a special entity created to handle claims specific to the defective concrete issue in this state. This entity is funded by state bonds issued periodically. If the funds to the CFSIC are delayed or would cease, the CFSIC would have no capacity to pay out claims. That said, the CFSIC has no termination date.

The scale of this disaster remains unknown. Please note that reports limiting the affected time period and source to by the Mottes quarry material may be inaccurate. The material is naturally present in some quarries and so it could be currently supplied for concrete pours. As far as I have been able to determine, there are no pertinent standards for oversight of this contaminant at the quarry level.

Since defective concrete predominantly affects residential properties, it is a residential appraisal issue. To provide information to appraisers, agents, and members of the public, I will add links to active groups and political representatives as well as news articles on this Renée Healion Appraisals website. The reader is cautioned that this is an unfolding issue and I am attempting to keep my links current. If there are any corrections or suggestions, please feel free to email me.

Renée Healion, SRA, ASA

2015 comprehensive TV news account:

https://www.nbcconnecticut.com/investigations/video/Crumbling-Foundations_Hartford-318078561.html

2018 good explanation of problem, signs, and solution: https://www.nbcconnecticut.com/on-air/as-seen-on/Childree-Foundation-Explainer_Hartford-406623505.html

US Representatives pages:

https://courtney.house.gov/services/crumbling-concrete-foundations

https://larson.house.gov/issues/tax-relief-crumbling-foundations

Map of claims has expanded:

https://ctmirror.org/files/2017/03/Crumbling-foundation-map.jpg

https://ctmirror.org/2018/05/05/ct-house-passes-relief-plan-crumbling-foundations/

IRS Tax relief:

http://crcog.org/2018/10/courtney-larson-receive-tax-clarification-from-the-irs-for-homeowners-with-crumbling-foundations/

State of CT and Council of Governments:

http://crcog.org/concrete-vendors/

http://crcog.org/2018/04/captive-selects-superintendent/

https://portal.ct.gov/DCP/Trade-Practices-Division/Deteriorating-Concrete-Foundations

https://foundationtesting.org/

http://crcog.org/2018/03/doh-expands-testing/

CFSIC site:

https://crumblingfoundations.org/

New Guidelines Added for Relief Program Active on Jan 10, 2019

https://crumblingfoundations.org/presidents-message/

The homeowner coalition’s site and FB page below:

https://www.facebook.com/Connecticut-Coalition-Against-Crumbling-Basements-1068591843193197/

https://www.ctnewsjunkie.com/archives/entry/20180604_hud_secretary_gets_look_at_crumbling_foundation/

CT-DOH Homeowner Advocate below:

https://www.ct.gov/doh/cwp/view.asp?a=4513&Q=599270&PM=1

Canada & US could share solutions, part of a WTNH series:

https://www.wtnh.com/news/news-8-investigators/united-states-and-canada-share-common-problem-with-crumbling-foundations/1612330693

Manchester has an extensive list of links:

http://assessmentandcollection1.townofmanchester.org/index.cfm/defective-concrete-and-crumbling-foundation-information/

Reports emerge of non-residential buildings with crumbling concrete in Tolland school and fire department:

https://www.wfsb.com/news/tolland-school-found-to-have-a-crumbling-foundation/article_46df7dfe-fe4c-11e8-8563-3b8ea5d4c757.html

https://www.nbcconnecticut.com/news/local/School-Firehouse-in-Tolland-Show-Foundation-Problems-441759723.html

Two insurers promise $10.5 million to affected insureds

https://www.captiveinternational.com/news/the-hartford-and-liberty-mutual-to-assist-crumbling-foundations-captive-2648

Journal Inquirer: "Concrete Hurts Grand Lists", towns lose revenue

https://www.journalinquirer.com/connecticut_and_region/concrete-hurts-grand-lists/article_d86c6f0c-231d-11e9-a8a5-771dc8f0caca.html

Journal Inquirer: Two bills to prevent deficiency judgments

https://www.journalinquirer.com/newsletters/bills-would-prevent-deficiency-judgments-on-crumbling-concrete-homes/article_b7a08704-2bba-11e9-81d9-4b74d1ece0e7.html

Stafford, Ellington, Vernon awarded grant for testing concrete

https://patch.com/connecticut/stafford-willington/stafford-ellington-vernon-receive-crumbling-foundation-grant

"Crumbling Foundation Repairs To Halt Until State Pays Up" WSHU http://www.tinyurl.com/yyzeecg6

June 5, 2019

"The General Assembly has approved a comprehensive crumbling foundation bill that aims to protect unsuspecting buyers from purchasing affected homes, establishes a low-interest loan program for repairs, allows condominium owners to participate in the captive insurance company, and develops more cost-effective methods for repairs."

https://www.journalinquirer.com/politics_and_government/crumbling-concrete-victory/article_183e5c6c-8872-11e9-9471-8b2a5920ccda.html

August 2019

CFSIC Head resigns early, citing funding issues, offers comprehensive data from 1,000 claims, warns of more defective foundations to come

"Authorities ignoring data that can alleviate crumbling foundations crisis, warns captive"

October 2019

Concrete chief to stay on longer; progress on foundation replacements

https://www.journalinquirer.com/connecticut_and_region/concrete-chief-to-stay-on/article_a20917de-e399-11e9-9607-ff522b2cae62.html

"World's Lessons on Concrete" International advocates visit CT

https://www.journalinquirer.com/connecticut_and_region/world-s-lessons-on-concrete/article_99c5aeb0-e917-11e9-85b9-d791d2ccb8a6.html

January 2020

Massachusetts: $350,000,000 needed in homeowner help

https://www.masslive.com/news/2020/01/massachusetts-estimates-350m-needed-to-fix-2000-homes-with-crumbling-foundations.html