[Texas Lefty Capital Austin...] Records, lawsuits reveal foundation problems plague massive Austin development

[Leroy N. Soetoro]

https://www.kxan.com/investigations/records-lawsuits-reveal-foundation-
problems-plague-massive-austin-development/

AUSTIN (KXAN) – When Maria Lopez, an elementary school custodian, bought a
brand new house in 2016, she was leaving a troubling living situation.

The home she lived in for nearly 30 years was damaged in a flood in 2013 –
and again in 2015. The next year the City of Austin purchased her home as
a part of a buyout to relocate people living in the Onion Creek
floodplain.

When she moved into her new home in the south Austin development Lennar at
Bradshaw Crossing, she hoped for a fresh start. But Lopez said soon after
moving in, she began noticing cracks growing in the corners of her walls.

“They would say ‘no,’ that ‘it’s OK. That’s normal’,” Lopez said in
Spanish about her calls with the developer, Lennar. “But I insisted.”

Copeland Engineering, an engineering firm registered in Texas, conducted
an inspection on Lopez’s home for Lennar, inspection records show. The
engineer had taken pictures of the cracks in her walls and of the gaps
growing in her driveway.

But at the end of the report, the engineer concluded her concerns were
“cosmetic” and that her foundation was not structurally a problem.

“It was frustrating,” Lopez said.

Lopez said after the inspection, the cracking got worse. She says again
she kept calling, insisting Lennar take another look.

A year later, the inspectors returned to Lopez’s home on behalf of Lennar,
inspection records show. This time, engineers found it needed repair. They
recommended the developer lift her home three inches above the clays it
was built on, according to the report.

Lopez’s struggles with her foundation are not unique in her neighborhood.
Email after email sent to KXAN from homeowners in Lennar at Bradshaw
Crossing detail cracking in walls of their homes and driveways, and the
slow-going process to get repairs covered under their warranties.

‘Negligent’ construction in Bradshaw Crossing, lawsuits say
Lennar built hundreds of homes in Bradshaw Crossing in the last decade. In
11 years’ worth of records, KXAN Investigates found 49 different homes in
the neighborhood had city permits filed for foundation repair.

In that same timeframe, three families sued Lennar over foundation
problems in the Bradshaw Crossing neighborhood.

In two lawsuits from 2019, families alleged Lennar was “negligent” in
building their foundations and “failed to honor their warranties.” The
judge in one of the cases ordered the matter to arbitration, a
confidential process to resolve a dispute outside the court system. Lennar
asked a judge to order the other case into the arbitration process as
well, but a final determination has not been made.

A different couple who lived in Bradshaw Crossing sued Lennar in 2011. The
couple said in the lawsuit four years after buying their new home, it
started having plumbing problems because of foundation issues. The
homeowners dropped the case later that same year after Lennar agreed to
pay them a settlement and repair their home, according to court records.

Lennar repeatedly denied our request for an interview with its regional
president, Rob Hutton, who oversees the building and sale of homes
throughout Texas. A spokesperson said the company doesn’t comment on
pending litigation.

“We have built thousands of homes in Austin, and we stand behind all of
them, including those in Bradshaw Crossing. We will repair any home that
does not meet the commitment we made to our buyers,” said Lennar
Corporation’s Vice President of Communications Danielle Tocco in an
emailed statement.

Lennar offered multiple buyers 10-year structural warranties on their
homes, lawsuits filed in Travis County show. As a part of accepting,
homebuyers are required to settle disputes over what should be covered
under their warranties in mediation, and if not settled, go to binding
arbitration — which means the homeowner has waived the right to a trial
and will accept a neutral third party decision as final in the case.

Lawsuits against Lennar that have made it before a judge have, in some
cases, ended with the court ordering the case to be handled in
arbitration, court filings show. In one of the lawsuits filed against
Lennar, a Bradshaw Crossing homeowner said the American Arbitration
Association would require the homeowner to pay an initial filing and final
filing fee; both of which were over $7,000. The homeowner said in court
records the cost of arbitration was “completely unaffordable” for his
family and would effectively force him to drop his case.

Nick Brudowsky, an Air Force reservist, moved into his home in Bradshaw
Crossing in 2014. His home was built in 2006.

The cracks in Brudowsky’s home are noticeable. The cavity in the rock
siding of his home is big enough to put a finger through. The break in his
driveway stretches the width of his garage door, and the concrete closest
to his home sits an inch higher than the concrete nearest the road.

Unlike some of his neighbors, he’s tried to avoid jumping into a legal
process that could cost more than the repairs he needs to make to his
home.

“This type of stuff was scary to me: to have an unknown fee with an
unknown outcome, and just hope for the best — and maybe I would end up
getting nothing out of it,” Brudowsky said. “A lot of my neighbors were
also taking care of things on their own, and I just followed suit.”

‘Bad clays’ in Texas
Geotechnical engineering experts say Texas, and Austin specifically, is
known for having particularly problematic soil for building single-family
homes.

“In Texas, let me tell you, the particularly bad clays are pretty much
along I-35: Dallas, Ft. Worth, Waco, Austin,” said University of Texas
Professor Jorge Zornberg, a geotechnical engineer.

Experts say expansive clays are prone to absorbing water, even underneath
a home. During rainy seasons, the clays will swell, and when there is a
dry season, the clays will shrink. The problem, according to Zornberg, is
when the foundation has not been designed to withstand the soils they are
built on, it will swell and shrink with the ground — and often land
unevenly.

Zornberg says failures in home foundations can be avoided when developers
test the soil on the lots where they build and then design the foundation
to accommodate the issues they find.

“The problem with foundation design is that no one sees it,” Zornberg
said. “You do not see it until you have a problem, but if you have a
problem, your nice windows and ceiling and columns — they may be
significantly compromised.”

“It is Russian roulette what you are building on.”

NICHOLAS BRESSI, AUSTIN ATTORNEY
Nicholas Bressi, an Austin attorney who has sued Lennar and several other
developers related to construction, said the foundation failures being
experienced in Bradshaw Crossing are not unique to Lennar developments.

“The problem with track builders, or someone coming in and building 100,
200 homes in a neighborhood, is they are not going to do 200 soil tests,”
Bressi said. “They typically do a pattern sampling throughout the 200
tracked areas, which may include 50 samples. If you are building 200 homes
and are doing 50 samples, it is Russian roulette what you are building
on.”

In Texas, developers are not required to submit the results of soil tests
to local municipalities. In Austin’s building code, developers are
required to hire a third-party engineer licensed in Texas to inspect a
home’s foundation during the construction process and that engineer must
submit a one-page letter certifying the foundation. While the letter may
reference unique soil conditions on a particular lot based on that
engineer’s judgment, the City does not require developers to submit soil
evaluation results as part of this process, a spokesperson told KXAN.

The City of Austin provided no records of Lennar submitting the results of
soil evaluations done at Lennar at Bradshaw Crossing. KXAN requested the
results of the soil evaluations done throughout the Bradshaw Crossing
development from Lennar but it did not provide the records and did not
specify how it does its soil testing. The company also did not share, when
KXAN asked, how many families have tried to make claims under its warranty
for foundation repair.

Maria Lopez said Lennar is now getting her foundation repaired under her
warranty. Workers are removing the soil from underneath her home and
adding 45 heavy stakes, or pilings, underneath to support the foundation —
a full underpin, the building permit shows.

It’s a relief for Lopez, who said she spent the entirety of the buyout
from her previous house on her dream of owning another home. Lopez’s
daughter, Michelle, who has helped translate for her mom throughout this
process, says it’s been frustrating to watch.

“It’s heartbreaking to see the community have to deal with these issues
when it’s such a small, hardworking community that deserves better,”
Michelle Lopez said.

‘Don’t wait’ for more cracks
Engineering experts say while foundation design can be hard to visualize
once a home is built, the effects of foundation failure will be easy to
spot within your home. If you are a homeowner, look for cracks in bricks
and drywall.

Legal experts stress the importance of inspecting potential issues as soon
as you catch them. Be sure to read your home warranty, which will likely
instruct you on how you need to file a claim under your warranty. It could
be mailing a formal notice to the developer through certified mail or
logging the claim on a website.

“When you see one crack, don’t wait until you have 10 to call someone,”
Bressi said. “Most people don’t think about periodic maintenance or
inspection of your foundation. Call a home inspector. Call an engineer,
immediately, if you think you have an issue.”

Inspections and testing are also critical on the front end, according to
Zornberg. Prospective buyers can hire an engineer or home inspector to
investigate the home’s foundation before purchasing a new home. For newer
developments, Bressi says, request the builder do site-specific testing on
the lot you purchased before construction begins and ask it to provide the
results.

Investigative Photographer Richie Bowes, Investigative Intern Addie
Costello, Graphic Artist Rachel Garza, Director of Investigations &
Innovation Josh Hinkle, Digital Reporter & Assignment Editor Chelsea
Moreno, Digital Director Kate Winkle and Graphic Artist Jeffrey Wright
contributed to this report.



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[Leroy N. Soetoro]

https://www.kxan.com/investigations/somebody-messed-up-water-flowing-
under-buda-homes-for-11-years/

Investigative Summary:
Our latest investigation into residential home building takes us to Buda
where a neighborhood is struggling with constant water underneath homes. A
nearly $50,000 engineering study paid for using taxpayer dollars found the
neighborhood is sitting on top of a perched aquifer that’s cracking homes’
foundations. We question the developer and the city on how this happened
and what comes next.

BUDA, Texas (KXAN) – When the Whispering Hollow neighborhood was
developed, Jimmy Fort, his wife and his children were among the first to
move in.

He sold his ranch in Seguin to be closer to his wife’s in-laws.

The new home they purchased would be where they planned to spend the rest
of their lives.

“This was the first house my wife ever had. She was always moving. She was
a single mom — and raised three daughters, and then the cowboy comes
along,” Fort said about meeting his wife.

But Fort said living in their Whispering Hollow home has been hard on his
family financially and emotionally.

“It’s been rough here.”

A few years after buying a brand new home in the subdivision from
developer Ryland Homes in 2008, Fort said he started experiencing problems
with the foundation. After a while, he began marking every new crack in
his wall and the spots where nails were popping out of the sheetrock.

In 2011, Fort says the builder paid to repair his foundation under his 10-
year warranty, according to court records. But despite attempted fixes
over the last 11 years, including multiple sump pumps, he said the issues
underneath his home continued.

‘I can’t sell this home’

On the day KXAN visited Fort, he showed us the ditches excavators created
around the foundation of his home. The standing water was visibly pooling
underneath his house — and cracks could be seen in his foundation.

Fort showed his process for measuring and pumping out the water. Before
turning on his sump pump, he carefully placed a stick inside and measured
where the watermark ends.

“Right now, there are approximately 36 inches of water underneath my
house,” Fort said on Feb. 8.

Once he turned on the pump, the water came up through a patch of grass in
his front lawn and began pooling in the stormwater drains of his cul-de-
sac.

“I come here and put $100,000 down on this house,” Fort said. “Where is my
equity? It is a goose egg. I don’t have any equity. I can’t sell this
house.”

‘I had never seen an issue like that’
There are hundreds of homes in the Whispering Hollow subdivision. The
problems are littered across the neighborhood — but while some homeowners
face virtually no issues, others persistently fight damage to their
foundations.

City records show since 2010, 14 homes in Whispering Hollow had foundation
repair permits filed with the Building Codes and Permitting Department. A
report from the city found several homeowners throughout the neighborhood
also had pumps installed to drain the water from under their homes.

Last year, the City of Buda paid an engineering firm nearly $50,000 to
figure out where the water was coming from in Whispering Hollow — which
city engineers said was also damaging city roads.

The soil evaluation reports done before construction started on the
development in 2007 — which KXAN obtained through an open records request
to the City of Buda — warned the developer homes built over the clays
found in the neighborhood “lead to serious cracking” for home foundations
and that special attention should be paid to their design. Groundwater was
not encountered when the soil was being tested then, according to the
report.

Engineers contracted by the City last year found what was going on
underneath Whispering Hollow was much more extreme than problematic soil.
Engineering firm AquaStrategies found water trapped in the clay-rich soil
under homes — creating a perched aquifer. A perched aquifer forms when
water is unable to drain down further into the earth because of a less
permeable underground layer and allows groundwater to mound above.

The wet clays can become mobile and can move under the weight of the
house, causing cracks in foundations, according to Hydrogeologist Brian
Smith with the Barton Springs Edwards Aquifer Conservation District.

“We have some clay layers between limestone and then more clay,” Smith
said. “Whenever you get that combination right at the surface, you can
have these problems.”

City of Buda project engineer Angela Kennedy was not with the city when
Whispering Hollow was built, but she’s taken the lead in the city’s
investigation.

“A lot of it just has to do with the volume of the water. That one
particular homeowner just so happens to be in an area where the water
volume is the highest and it’s like he is sitting on top of a river under
his home,” Kennedy said, referring to Fort’s home.

‘Lennar stands behind every home we build’
In 2017, Lennar Corporation merged with CalAtlantic Homes — a company that
purchased Ryland Homes in the years prior.

The corporation would not agree to an interview with our station but
provided a statement addressing the issues in Whispering Hollow.

“Lennar stands behind every home we build and honor warranty requests when
something is not right. We acquired Whispering Hollow from another builder
and have attempted to resolve the concerns of the handful of homeowners
who reported issues with the expansive soils that are common throughout
the Austin area. Prior to the development of the community, all soil and
geotechnical reports were reviewed by the appropriate local government
agencies as part of the public approval process.”

‘They don’t know how to fix it’
‘I was wronged along with other homeowners here, and it’s like I told them
at city hall, there are places to build homes and there are places not to
build homes,” Fort said. “I think somebody messed up and they don’t know
how to fix it.”

The city is now considering solutions to the issues being faced by
homeowners, which could cost the city anywhere from $7,000 to $525,000,
depending on what leaders decide.

“Back in 2007, the city was very different,” Kennedy said. “We had maybe
one staff person and the rest were reviewed by external contractors. So,
over the years we have started to bring in more city staff and review
processes are handled in-house.”

“We are much more capable and proficient at maintaining all the
engineering standards that direct the development of city infrastructure,”
she added.

In the years after Whispering Hollow was built, city leaders changed
ordinances to require builders to submit the results of soil evaluations
before being issued building permits. But that is not the standard across
the state — and not a part of Texas law.

KXAN looked into the City of Austin’s policies for inspecting home
developments as a part of an investigation into a massive Austin
subdivision dealing with failing foundations. The City of Austin requires
third-party inspectors to submit one-page letters certifying new home
foundations but does not require builders to submit soil evaluations as
part of the process.

‘It was wrong to do that‘
The structural warranties on most of the homes in Whispering Hollow,
including Fort’s, are now expired. Engineers with AquaStrategies predict
the issues in the neighborhood will likely continue if no action is taken
at all.

In 2020, Fort and his family filed a lawsuit against Lennar alleging
“after multiple attempts to repair the foundation, the damage on the
property still exists” and that their own experts do not think the
problems can be corrected. The suit is still ongoing.

“I look at it and say ‘It is a construction defect that the builder knew
or should have known and could have remedied the problem a long time ago,’
and now Mr. Fort has spent his retirement and his savings into this home
that has a severe foundation issue,” said Fort’s attorney, Alex Hernandez,
Jr.

We pulled lawsuits from across the state dealing with home foundation
disputes. Since 2013, at least 900 lawsuits dealing with foundation issues
have been filed in Texas. The claims range from defective foundations and
ineffective repairs to companies seeking compensation for repairs made.
The claims can end up playing out in court, mediation, arbitration or
dismissed entirely.

Fort said during our interview, he believes Lennar should buy his home and
any other property in Whispering Hollow dealing with damage from the
perched aquifer.

‘It was wrong to do that, and a lot of people are paying for it at the
expense of the people that let this happen,” Fort said.

Lennar Corporation would not comment on Fort’s specific case.

Investigative Intern Aurora Berry, Investigative Photojournalist Richie
Bowes, Graphic Artist Rachel Gale, Director of Investigations & Innovation
Josh Hinkle, Drone Pilot Bob Osborn, Digital Director Kate Winkle and

[Leroy N. Soetoro]