Liability for structural failure (foundation) in a 5 year old home.

I need help. My wife and I purchased a new home in Mississippi about 5 years ago. The house is built on a slab foundation. After about 2 1/2 years we started seeing some cracks in our ceramic tile floors that concerned us. We filed a claim with our warranty company, which carried a 10 year warranty on structural issues. They sent an engineer to evaluate and the response from the warrany company (and the builder) was that concrete cracks and it was just cosmetic. Over the next year we had new cracks in our walls, ceilings, brickwork, and the floor cracks got dramatically worse to the extent of a 30 ft. long crack across our kitchen floor. We filed a second claim with our warranty company in May 2006. Their engineer returned for a second time, and in June the warranty company agreed that we did have a foundation problem. Well, it is now February (8 months later) and we finally received an offer from the warranty company of $50,000.00 to repair the foundation. The issue is that they claim to not be responsible for cosmetic damage due to the foundation failure, which is going to cost almost as much as the foundation repair. The builder is a builder-agent for the warranty company and falls under their umbrella of protection. We bought this house in good faith and feel that we should not have to bear the cost of shoddy workmanship. We are looking at the possibility of going back against the inspector that approved the site while it was under construction. Has anyone had experience with this type of problem? If so, what was your solution?

You have the option of having a city building inspection done even at this point in time to try and ascertain the source of the foundation failure. Depending on where you live, your city also may have issued a final certificate of occupancy at the end of construction; you may also have an outlet with your city or county building department if in fact the defect existed at that time. Unfortunately, your 10 year warranty may have only allowed for defects in construction and/or workmanship for the first year (or 2 yrs, depending on the warranty); the remaining would only cover the actual structural defect and as such, only the expenses they've offered to cover would be reimbursed. You may also want to check your homeowner's insurance policy to see if possibly your "cosmetic" damages are also covered as a result of the original foundation defect as well.

You may have to take on "city hall," but it just might be worthwhile for you to see it through. If that city or county inspection differs significantly from the warranty company, you may have recourse (not only with the city,) but with corporate headquarters of your warranty company. (Just an opinion; this is not legal advice.)

Much good luck to you. Please let us know how this turns out for you.