AUSTIN (KXAN) — Texas Sen. Nathan Johnson, D-Dallas, said in an interview he believes it may be time for the state legislature to take a closer look at the residential home building industry following a KXAN investigation. KXAN found families across the state are dealing with crumbling foundations and years-long disputes with developers.

“It’s something that was attempted to be fixed and addressed more than a decade ago and was not, so it may be time for us to take another look at it,” Sen. Johnson said.

Across Texas, municipalities are charged with coming up with rules for developers who want to build subdivisions, but a KXAN investigation found some of the largest cities in the state don’t require developers to hand over the results of soil tests where they build. Those tests can reveal problematic geographical conditions for building homes.

What does the problem look like?

In Buda, city officials paid nearly $50,000 to investigate why water was coming from the ground for years, destroying home foundations in a large subdivision. Engineers hired by the city found a perched aquifer had developed below the homes there.

The neighborhood was originally developed by Ryland Homes, but in 2017 Lennar Corporation merged with CalAtlantic Group — enveloping Ryland Homes’ developments and liabilities in the process.

Soil evaluations on the land before homes were built show engineers warned the original developer homes built over the geologic formation found in the neighborhood often end up with “serious detrimental cracking.” They also warned groundwater might be found during the construction of the subdivision.

In a statement, Lennar Corporations’s Vice President of Communication Danielle Tocco said “Prior to development of the community, all soil and geotechnical reports were reviewed by the appropriate local government agencies as part of the public approval process.”

Over the years, homeowners in the Whispering Hollow neighborhood installed sump pumps to pump out water from under their homes and prevent further foundation damage. More than a dozen homes have had their foundations repaired, city permits show.  

Jimmy Fort, who has lived in Whispering Hollow since 2008, filed a lawsuit against the builder alleging deceptive practices and breach of contract after multiple attempts to repair the foundation did not stop water from collecting under his home — or the cracks from emerging on his walls.  

“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,” said Fort in an interview with KXAN in January 2022.

“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,” Tocco said.

Possible solutions

The City of Buda changed its ordinance in 2014 to require builders to submit the results of soil evaluations before being issued building permits, but many large cities in Texas don’t require it, including Austin, San Antonio, El Paso and Corpus Christi.

In Austin, large developers aren’t required to submit soil evaluation results before building — and a KXAN investigation found nearly 50 permits were approved for foundation repair in a single neighborhood over 11 years.

At least three homeowners filed lawsuits against the developer, Lennar Corporation, alleging it was negligent in constructing its foundation and failed to honor warranties.

A spokesperson for Lennar Corporation said in a statement, “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 commitments we made to our buyers.”

City of Dallas officials’ don’t automatically require soil reports, according to officials. It is required if there is already data available indicating expansive, compressible, shifting or other questionable soil characteristics where a developer intends to build.

The building official with the city would determine whether soil tests would need to be done. The decision is made on “a case-by-case basis.”

This would not be the first time Texas lawmakers tried to tackle home building defects and the long-legal battles that can follow. After only six years in existence, the Sunset Advisory Commission in 2009 shuttered the Texas Residential Construction Commission, which was tasked with regulating homebuilding and resolving disputes between builders and homeowners.

Critics, including Texas homeowners, accused the commission of favoring builders and delaying families in filing lawsuits against developers.

“What the answer is… I don’t know. I do think it’s time to see if we need some sort of state-mandated minimum standards that would give municipalities a reason to perform some of the things they are being pressured not to perform now,” Sen. Johnson said. “I think we could help them out and help cities help their residents.”