Catastrophic Structural Failures: Identifying and Avoiding

Catastrophic Structural Failures: Identifying and Avoiding

Catastrophic structural failures: identifying and avoiding

Catastrophic structural failures are a home builder’s worst nightmare. But few builders expect these structural failures to happen to them. We queried the nation’s largest database of forensic structural claim investigations to show you three different case studies related to catastrophic structural failures. We’ll examine what went wrong, what the builders did and should have done, and what you can do to avoid catastrophic structural failures.

Catastrophic structural failures in a New Mexico master-planned community

This story begins in 2005. Two separate builders—one national and one regional—faced catastrophic structural failures in a community of about 300 single-family homes. Each builder handled this tragic event differently, but only one came out relatively unscathed.

Like most stories of catastrophic failures, the property looked normal. It had a flat topography. It didn’t have water features, areas built up with fill material, or large rock. The soils were firm. But like most catastrophic failures, the problem lurked beneath the surface.

What was the biggest concern regarding the potential of these structural failures?

In this case, the developer conducted a proper geotechnical investigation and provided the geotechnical report to the builders. The investigation indicated that the soils consisted of silty, very dry, fine sand. The sand’s density was low, indicating that there were many tiny air voids between sand grains.

The geotechnical report indicated that if this sandy soil got wet, it had the potential to collapse. In this community, the report showed that it was possible for the soil to collapse by as much as four inches in the upper 10 feet.

Based on this report, the geotechnical engineer recommended six best practices to keep the soils from collapsing and causing damaging settlement.

  1. Design well-reinforced foundations to tolerate potential movement
  2. Properly compact foundation support soils and any structural fill material
  3. Install gutters, downspouts, and splash blocks
  4. Grade lots to create rapid runoff of rainwater
  5. Irrigate only minimally, and no irrigation within 5 feet of the foundation
  6. Provide engineering oversight during construction to confirm these recommendations

Despite these recommendations, almost 80 foundations in this 300-home community experienced settlement-related failure.

Why did this catastrophic structural failure happen?

Quite simply, the builders, contractors, and homeowners didn’t follow the engineer’s recommendations. For example, the shallow spread footing foundations that the builders and contractors used at this community could only safely tolerate about one inch of settlement. That wasn’t nearly acceptable, given the potential for up to four inches of settlement.

How did these builders address the issue?

After these catastrophic failures happened, the two builders that primarily developed this phase of the community suffered different consequences.

The national, self-insured builder reportedly faced claims and related expenses from at least 40 homeowners. Many homes had to be bought back. It turned out to be a complete nightmare.

On the other hand, the regional builder had coverage through a third-party, insurance-backed structural warranty. The warranty company paid over $4 million for 39 claims, 21 of which occurred on the same block. On average, the warranty company received structural claims six years after the builders sold the home. The average loss per home exceeded $70,000. The regional builder had an admirable loss history before this particular catastrophe and is still active in the warranty program.

What can this case study teach us?

Builders can avoid settlement-related failures by consistently following the engineer’s recommendations and geotechnical report. Additionally, a third-party, insurance-backed structural warranty—like an industry-leading structural warranty from 2-10 Home Buyers Warranty (2-10 HBW)—can protect builders when catastrophes like this strike.

A quiet Mississippi subdivision rattled by structural failures

Let’s turn now to a catastrophic structural failure in a Mississippi subdivision. In this case study, you’ll see how a third-party, insurance-backed structural warranty saved a builder millions of dollars in claims and helped preserve the builder’s reputation.

What was the biggest concern regarding the potential of these structural failures?

According to Walt Keaveny—Risk Manager and Principal Engineer with 2-10 HBW—a portion of Mississippi is well known for an expansive-clay geologic formation. This clay formation has a characteristic bluish color, and builders know its high potential to swell when wet. The clay can swell up to 12% and exert uplift pressures of up to 6,000 pounds per square foot. This can result in home foundations being lifted well over one foot!

For past projects, this particular builder typically used a satisfactory practice to identify this clay formation before developing a new property. Most commonly, the builder would dig test pits with a backhoe to search for this easily identifiable clay. Per local, proven industry practice, if there was a buffer zone of non-expansive overburden soil with a thickness of at least seven feet separating the expansive clay from the bottom of slab foundations, then swell-related damage would be unlikely.

Why did this catastrophic structural failure happen?

For one particular development of 170 homes, someone simply omitted the search for this clay. The clay was hidden just below the bottom of the slab beam excavations. Slab-on-grade foundations in the area were only designed to tolerate one or two inches of movement. This was well short of the potential 12 inches of movement this soil could cause. Even worse, rainwater didn’t drain well from most lots.

What can this case study teach us?

This case study reaffirms that as a builder, you must double- and triple-check that you’re following all best practices at all times. These structural failures were the result of an omission, which is within your control.

A third-party, insurance-backed structural warranty can be a life saver. In this case, the builder included such coverage on their homes. On average, the warranty company received claims seven years after the homes were sold. The warranty company covered 50 structural claims totaling about $2.5 million in losses. The average loss per home was almost $50,000. Before this catastrophe, this builder had a respectable loss record over the previous 17 years, which included over 1,000 new homes.

Catastrophic structural failures in a Utah master-planned community

Our final case study covers a topic we’ve covered in the past: improperly compacted fill material. This instance of catastrophic structural failures occurred in a master-planned community in Utah. But the ending is a bit happier than it could have been.

What was the biggest concern regarding the potential of these structural failures?

The biggest concern in this case lay within a plot of mountain lots two regional builders purchased. The two builders hired a geotechnical engineer to explore the subsurface conditions on some, but not all, of the lots scattered about the community.

The natural subsurface conditions were optimal for home construction. But on many of the mountain lots, the builders wouldn’t build directly on the natural soils. The grade on these lots was steep, requiring the builders to import fill material to create level building pads.

Trucks hauled in tons of fill material and end-dumped it onto the steeply sloped lots. As the fill started to rise and level the grade, the builders compacted the top several feet and started home construction on the newly firm building pad.

Or so they thought.

Why did this catastrophic structural failure happen?

Just months after the builders finished construction and sold the homes, homes started settling and experiencing significant distress. This early development of distress was a sign that the homes were founded on improperly compacted fill material.

Forensic investigations found 45–65 feet of improper fill thickness. The weight of the homes caused the fill to consolidate, causing up to a foot of settlement. As with many instances of structural failures caused by improperly compacted fill, the builders tried to compact the deep fill with the same equipment they used to spread the fill. This, obviously, was woefully inadequate.

What can this case study teach us?

Be sure to properly compact your fill material! In this case, these two builders were fortunate to have a third-party, insurance-backed structural warranty for their homes.

The warranty company began to receive claims soon after the homes sold. This allowed the warranty company’s engineers to quickly alert the builders about the cause of the claims. These alerts gave the builders time to modify their lot development practice to avoid additional claims.

Because of the engineers’ alerts, the warranty company only received six total claims. The warranty company helped the builders avoid a much bigger disaster.

When all was said and done, the total losses were $1.2 million. That put the average loss per claim at $200,000, which is much higher than average. That’s because fill material claims typically impact the entire foundation. The claims required full-underpin remedial piers extended through the deep fill and founded at great depth. These builders had enrolled hundreds of homes in the warranty program over many years with favorable loss histories, showing once more that catastrophes can strike even the best builders unexpectedly.


Catastrophic structural failures can happen to just about any builder. According to Keaveny, it’s crucial for you to always take the following steps to avoid catastrophes like these.

  • Use a geotechnical investigation for conditions specified by code (see 2012 IBC 1803.5).
  • Read the entire geotechnical report and fully comply with the engineer’s recommendations.
  • Properly compact and test all fill material that supports the foundation (see 2012 IBC 1803.5.8).
  • Establish proper site drainage (see 2012 IRC 401.3 & 801.3).
  • Educate homeowners to maintain established site drainage and not over-irrigate.

In addition to Keaveny’s recommendations, we urge you to cover all your homes with a structural warranty from 2-10 HBW. For each of the above case studies, a third-party, insurance-backed structural warranty helped builders protect their bottom line and their reputation. In the Utah example, the warranty company’s engineers helped the builders anticipate and avoid even more failures.

A structural warranty from 2-10 HBW is an invaluable tool that protects your bottom line and reputation, and can help you keep doing what you do best—building quality homes.

Learn how you can protect your business and add valuable selling points to your new builds with a 2-10 HBW structural warranty.

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Special thanks to Walt Keaveny, whose expertise inspired this article.

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