Pulling Up New Roots : Foundation Problems Leave Homeowners Angry, Houses Up in the Air

When Paul and Celia moved into a brand-new two-story home in Carmel Mountain Ranch just south of Rancho Bernardo, they were excited about the $165,000 price tag, the swimming pool, their view overlooking an 18-hole golf course and the security of a well-kept, gated community.

The couple--who, on their attorney’s advice, refused to allow their real names to be used--weren’t prepared to hear the developer of the 1,500-acre community announce a month later that they had to move out.

About 55 new homes were found last April to have inadequate foundations, Presley Vice President Tom Maurer said Wednesday. Most of the homes sit on “moderately expansive soil” that expands when wet and can lead to cracked concrete. The homes are now protected by a heavy plastic membrane inserted around the foundation to act as a barrier against water. Maurer said the repairs have run about $7,000 per house.

Sitting on Stilts

But six homes--including Paul and Celia’s--have been built on “highly expansive soil,” and their foundations must be completely replaced; two are already sitting on stilts 10 feet in the air so the concrete slabs below can be removed. The cost of replacing the foundation is more than double what it costs to install the waterproof barriers, Maurer said.

The six homes are now empty. Three had yet to be sold when the trouble was detected and were taken off the market, Maurer said. Residents in the others were either moved out or told they could not move in. Repairs are expected to be completed in six to eight weeks, when those who wish to stay will move back in.

More than 200 Carmel Mountain Ranch homes were built--and quickly sold--in six phases. Maurer said the problem started when specifications from a soil report for Phases 1, 2 and 3 were used for development in Phases 4 and 5, where homes were built on the moderate and highly expansive soil, he said. The mistake was discovered before development on Phase 6 began, and the problem is not expected to occur elsewhere, he said.

Presley officials offered to buy back the homes at prices equivalent to what Carmel Mountain Ranch homes were selling for in Phase 6. They also agreed to pay moving expenses. One family that wants to stay has been put up in a nearby apartment while their house sits on stilts.

Paul and Celia decided to sell back their home. Although they received slightly more for the house than what they paid, they were angry that the company did not take into account rising interest rates.

‘Hassle Was Incredible’

“At that time, real estate was skyrocketing, and they did not adjust for that. So people had to sell what they had and buy at a higher price for a home of equal value,” Paul said. “The hassle was incredible. It was up in the air what was going on, and it was very upsetting to my wife.”

Maurer said Presley conducted extensive studies to remedy the problem. “We don’t want them to be hurt by this, financial or any other way. . . . We felt we’ve done more than the average developer would. We blew the whistle on ourselves, so to speak.”

One young couple with a newborn baby had been saving up for their first home for about five years when they bought into Carmel Mountain Ranch, Paul said. The foundation problems proved too aggravating, however, and the couple eventually moved to Rancho California. “Her first home was supposed to be an exciting, fun time,” Paul said.

Another woman, who would identify herself only as Pam, lives next door to one of the homes now raised off the ground. Her own move-in date was delayed two months so workers could install the waterproof barrier around the house’s foundation.

“I had to find a place to live for a month. . . . I didn’t feel real comfortable with” the fact that repairs were needed, she said. “But housing prices had risen 20% from the time I bought in, so I couldn’t afford to buy elsewhere.”

Despite the inconvenience of next-door construction, Pam says she is satisfied living in Carmel Mountain Ranch. “I have a house on a golf course,” she said.