Investor · San Diego, CA · Member since 2012 · 309 posts · 18 votes
Hey guys,
we are considering a purchase of a house in Texas, where there are "areas of active soil", meaning lots of houses have foundation issues due to bad soils.
The seller repaired the foundation and there's a LIFETIME transferrable warranty.
Does it mean next time there are issues with foundation, the repair company will take care of it without us having have to pay?
Thanks!
Edita
This will be about repairs and warranties in general. There might be some deductible. Also, you have to get a definition of the word "lifetime" - my lifetime, some newborn's lifetime, the predicted lifetime of a typical repair. Sometimes the transfer requires a payment to be made. Sometimes there is a payment schedule to be made during the lifetime, which failure to pay ends the warranty. Sometimes an ongoing (e.g. annually or biannually) re-inspection will be required (and you have to pay them for that).
In Texas, foundation lifetime warranties typically imply lifetime of the structure and if the seller is advertising it, most likely it will transfer to a new owner. Of course you should verify, but that is typical. These warranties came into existence a long time ago because 90% of these repairs require future adjustments. How do you know if you need an adjustment? You doors start sticking and your sheetrock starts cracking. The warranties will not typically cover damage that occurs to other items than the foundation, such as but not limited to sheetrock and plumbing, that occur due to future movements. The warranty covers the cost to re-level the foundation and then you fix everything else. Soil movements are extremely common in Texas, but even so, I am not very turned on by these properties. You can find houses that don't have issues.
@Bryan: WOW! You CAN find houses with no foundation issues? I was told by other TX investors that the houses are divided into 2 categories: the once with foundation issues and the ones that will HAVE a foundation issue in the future.
So, I thought if we buy a house with a REPAIRED foundaiton, we will eliminate the fear of having have to deal with the issue later
I would be highly skeptical of a "lifetime warranty" from a foundation company. I know Brian Hoyt has had a good experience with a reputable company that actually honored its warranty. My perception (based more on anecdotal conversations) is that 9 times out of 10, the company will find some way to avoid having to honor the warranty (e.g. improper drainage caused movement). If you are buying the proposed property from another investor, then I would be even more skeptical that the warrant (or repair work) is worth anything. My observation is that most investors use cheap, crummy companies that are basically fly-by-night. I generally prefer to perform foundation repair myself to ensure it's done by my guy.
WHAT!?! That's what I thought as I read your last sentence John Chapman, "I generally prefer to perform foundation repair myself" until I read, "to ensure it's done by my guy."
Brian Hoyt I am so uncomfortable considering a house with a foundation issue... Even if it got repaired...Since, like you mentioned, 90% of the houses will need an adjustment in the future!