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Options When Dealing With a New Home Defect

Richard Montgomery on

Dear Monty: What should I do if my new house has a defect or foundation issue? Our brand-new built house started to have flooding in our garage. With heavy rains in the state I live in, this brand-new garage started to flood. Water was seeping through the cracks in the foundation. We think it's a foundation issue. We feel that this house is now compromised, as it is built in a carve-out of mountains and rocks. Help, please!

Monty's Answer: There are many unanswered questions here. What date did you move in? Did you receive an occupancy permit from the city, county, or state? Is your home built on a slab foundation with footings or a frost wall?

There are several possible explanations, such as a builder establishing the elevation to low, improper or unfinished grading; a 100-year flood accumulation; or a delineated wetland. Most municipalities require an occupancy permit. The city has inspectors who require the builder to obtain permits at various stages of construction, culminating with an occupancy permit. It is not unusual for concrete to crack, even in a new home. Do you have an occupancy permit? Did the builder obtain the necessary permits?


No. 1: You may be correct. There may be a defect. Then, depending on the builder's quality, they will stand behind their work and repair the problem. If you are dealing with a builder who will not take responsibility, you likely will need an attorney. You could win a lawsuit and get a judgment, but the builder may not have the money to pay. Discuss this judgment issue with your lawyer. If the builder has a real estate license, you may have some leverage as the state can investigate if the builder broke the law by not obtaining the proper permits. The builder may have errors and omissions insurance which may work in your favor.


No. 2: The other option is re-grading the lot. I suspect you have no basement if you are on a rock mountainside. Engage a home inspector not acquainted with the builder to inspect your home to identify the problem. You would likely need to have an independent third-party verify that the plan drawings were completed, either properly or improperly. Suppose the plan or a land surveyor showed what the elevation should be, and the surveyor comes back and checks the elevation, and the foundation is below the established grade. Most builders have a surveyor establish the grade to ensure it will not flood in a storm. Sometimes a French drain is part of the project. A French drain is a gravel-filled trench that includes a perforated or slotted concrete or PVC pipe that captures water and directs the water away from the foundation. Sometimes, problems in new construction are difficult to correct later. The top of list of such problems is the elevation.

The options above cover many possible issues and solutions. Following up on the various comments and courses of action may bring about a satisfactory conclusion. In the future, should you build another home, make sure to select a builder you trust (which I have additional information about on my website).

Richard Montgomery is a syndicated columnist, published author, retired real estate executive, serial entrepreneur and the founder of DearMonty.com and PropBox, Inc. He provides consumers with solution options to real estate questions. Follow him on Twitter(X) @dearmonty or DearMonty.com.


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