Concrete Facts Are Better than Concrete Fiction
In our continuing effort to separate concrete fact from fiction and reality from rumor, we are pleased to provide installment #6 in concrete scientist Kevin Miller’s continuing series on the facts about crumbling concrete, what we know about it, its causes, and most importantly its solutions.
Click here to read installment #6 in this valuable series. CFSIC is committed within the reach of its resources to helping everyone understand the truth about the crumbling concrete natural disaster.
Changes Effective Today for Pending Claimants (post date: August 16, 2021)
As previously announced on this page, any application received by CFSIC by 5:00 PM today will be considered to be in the first tier of Pending claimants within the CFSIC program.
Beginning after 5:00 PM today, any Pending claimant first registering with us will be a “Tier 2 Pending claimant.” These claimants will be registered with us, but we want to make it clear that we may not get to any of these Tier 2 Pending claimants for some time to come.
Right now, we are very much engaged in getting ready to take care of many Active Severity Class 3 and 2 claimants who are waiting in line for funding assistance. Once the next $20 million of bond funding arrives, that work will take us right through the Christmas holiday.
We’re going to begin the process of opening Tier 1 Pending claim files on January 5, 2022, and on a claim-by-claim basis assisting first our Severity Class 3 claimants, and then secondly our Severity Class 2 claimants, in that order.
The only exception to this rollout of claims handling will involve one planned unit development, which is discussed in the next section.
If you apply for the first time on August 17, 2021 or subsequent, we want to assure you that you will not be left behind. We want you to apply, and we want to get you the help you need and deserve as quickly as our flow of funds will permit.
Announcement Involving a Single Planned Unit Development
First, CFSIC is not changing its general Underwriting and Claims Management Guidelines. CFSIC has decided that a situation that has presented itself with respect to one planned unit development, if not addressed, may prevent Active claimants from ever getting into the Participation Agreement line. CFSIC believes that it is important wherever possible and feasible to remove obstacles standing in the way of foundation remediation throughout our system.
Today CFSIC is announcing a one-time set of modifications to its existing program as respects one planned unit development with existing circumstances that are preventing some Active claimants from moving forward with remediation, and it pertains or applies to no other claimant or group of claimants and no other situation.
Because of the complex nature of the way PUD claims must be adjusted, we thought it best to provide a Q&A on key points affecting the adjustment of claims for this particular PUD association.
Question: Will you reveal the name of this association and/or the names of affected claimants?
Question: I understand that one of the changes that CFSIC is making is a change with regard to the needed insurance company denial letter.
Answer: It is. Effective today, if one Active PUD unit claimant sited on a shared platform has received an insurance company denial letter, CFSIC will deem that all homeowners sharing that foundation platform will have been denied for purposes of the adjustment of their CFSIC claim.
Question: This seems like a big departure from CFSIC’s hard and fast rule about getting an insurance company denial letter.
Answer: Not really. While CFSIC will continue to require an insurance company denial letter from stand-alone homeowners as well as from PUD owners on a stand-alone unit basis (not a shared platform), CFSIC wants to expedite the possibility of Active PUD claimants receiving claims funding by recognizing that a pyrrhotite infection located in one part of the foundation of a shared platform suggests, from an engineering perspective, that the whole foundation will eventually become impaired and unsafe, which is the same assumption we make with condominiums.
Question: So, in other words, you’re going to treat PUD foundation platforms the same way you now treat condominium platforms in this specific regard?
Answer: We are.
Question: Will this change in guidelines apply to another PUD, other than the one in question?
Answer: Yes…if and when another PUD association presents itself and its members become our claimants. To the extent this happens, we will formally make changes to our Underwriting and Claims Management Guidelines to reflect this. Generally speaking, we do not modify our guidelines in the case of any one-off situation.
Question: I understand that you are addressing the tough issue of investor-owned units with regard to this existing PUD.
Answer: We are…but with a clear understanding that CFSIC will never replace a foundation that is investor-owned where that investor owns not only the unit but the foundation below the unit. Some PUD unit owners live on a shared foundation platform where at least one investor-owned unit also exists. Because of limited construction and remediation possibilities when that configuration of ownership occurs, CFSIC will be making a one-time change in the way it deals with this situation. Beginning today, we are going to ask investors who own units to join with their fellow platform unit owners who are our Active claimants and consider paying their fair share of that platform’s remediation costs. Based on post-remediation sales information, we believe that that’s a smart move for investors for many reasons. We’re going to encourage investors to get together with our claimants and share costs and share a common remediation plan. By the way…we are only dealing with a handful of examples.
Question: That sounds great, but as a practical matter what happens if the investor refuses to go along with this and pay for their share of the remediation?
Answer: With respect to this particular PUD association (and not to any other situation) if we have at least one existing Active claimant on a shared foundation platform, where an investor-owned unit also exists as of August 16, 2021, CFSIC has decided it will do two things:
First, the requirement that all existing CFSIC-wide Active Severity 3 and 2 claimants take the steps necessary to enable us to put them into the Participation Agreement line by January 5, 2022, will be, only with regard to this specific situation, moved to July 5, 2022.
Secondly, to the extent the investor sells the unit to a person who is able by definition to become a CFSIC claimant, and where secondly that person applies, becomes Active, and moves into the PA line by no later than July 5, 2022 at 5:00 PM, that claimant will not be considered a Tier 2 Pending claimant.
Question: So are you saying that, for example, if a four-unit platform exists with one Active Severity Class 3 claimant and two Pending claimants (who are Tier 1 Pendings) and one investor-owned unit…that investor has the choice of either participating at his or her own cost in the remediation of that foundation, or can sell that unit to someone who wants to make that unit their home, by July 5, 2022, and that new homeowner will not fall into the Tier 2 Pending class of claimant?
Answer: Correct. But with some caveats. That new claimant must not only have purchased that unit on or before July 5, 2022…he or she must ALSO have fully applied to CFSIC and become an Active claimant, and ALSO have been moved into the Participation Agreement line by 5:00 PM on July 5, 2022.
Question: Okay, but what if all of this doesn’t happen by then?
Answer: There are two alternatives remaining. The three eligible claimant-owned units in the example shown above must find a way to remediate the platform, exclusive of the investor-owned unit (subject to CFSIC’s guidelines on this subject), and be moved into the Participation Agreement line without the investor-owned unit involved, by no later than July 5, 2022. If that cannot be done, those claimants will all be removed from the CFSIC program.
Question: What about a shared platform where no investor-owned unit exists?
Answer: All the changes noted above pertaining to Active claimants sharing a platform with investor-owned units would not apply.
One Week to Go…
Last week on this page we announced an important initiative designed to help move Pending claimants into the Participation Agreement line as fast as we can.
We remind everyone that we are creating, effective August 17, 2021, a “Tier 2 Pending claimant” category.
Through close of business on August 16, any claimant registered in our system on or before that date will be considered to be in our “Tier 1 Pending claimant” category. If they are also registered as having a Severity Class 3 or 2 designation, they will be in the very first group of Pending claimants we get to before we get to anyone first registering as a claimant on or after August 17.
As of this morning, we have 579 Pending claimants in our system. 294 have filed documentation substantiating a severity code 3 classification; 85 are verified Severity Class 2. (The rest are registered as either Severity Class 1 or do not yet carry severity class codes.) On January 5, 2022, we will start the process of getting to those 379 claimants before we get to anyone who applied on or after August 17, 2021.
Between today and through 5:00 PM on August 16, we will permit as many claimants who can apply to be put into the Tier 1 original group of Pending claimants…after that, if you file a claim with CFSIC, you will be moved into Tier 2 status, which means that we’re unlikely to get to your Participation Agreement until the summer of 2023 at the earliest.
This information is vitally important for our stand-alone home claimants. It is equally important for our claimants who live in associations.
Those of you who are potential claimants on a shared foundation platform: be mindful of what’s going to happen. We want to move claimants into line for Participation Agreements, and thus funding, as quickly as we can. This all has to do with putting families back in safe and secure homes. We are aware of a continuing debate within certain associations about whether to apply at all. The real possibility with this debate is that some association neighborhoods and communities end up with a two-tiered real estate value system: real estate that has returned, once a foundation is replaced, to its original value, standing alongside real estate that can’t be sold, and eventually may be deemed to be unsafe for habitation.
CFSIC will now be able to get to Pending claimants four years in advance of when we thought we could. What’s our advice? Get in line. Apply. Make the effort. We will help you.
Some associations have rallied their memberships…that’s why, as of this morning, five condominium buildings are up off the ground in one association alone. Some associations have spent a lot of time challenging CFSIC’s underwriting guidelines, debating the merits of the program, even discussing the threat of litigation among homeowners themselves.
The pathway is clear. CFSIC is in the business of rebuilding lives and rebuilding communities…but we cannot do it without help.
Moving Claimants Into Line as Fast as We Can
CFSIC’s goal has always been to place claimants into the Participation Agreement line as quickly as we can and to remediate foundations just as quickly as the flow of our funding will permit.
Beginning on the morning of August 17, 2021, any claimant first applying to the program on or after that date will be considered a “Tier 2” Pending claimant.
What does this mean?
Simply put, we’re going to begin the process, starting on January 5, 2022, of an in-depth assessment of each and every Pending claimant (including Type 2 Pending claimants) who has entered our system with a claim, starting with January 13, 2020 and ending with August 16, 2021.
If you’re currently a Pending claimant or can become one before close of business on August 16, 2021, this means that we will be looking at your claim before we look at any Severity Class 3 or 2 Pending claimant who comes in on August 17 or after (Tier 2 Pending claimants).
What’s the goal?
Between January 5, 2022 and July 1, 2022, we’re going to do our best to make, starting with Severity Class 3 Pending claimants, as many of these claims Active as we can…and then putting those claimants into the Participation Agreement line.
What about Severity Class 2s in the original group of Pending claimants?
We’re going to continue the process already in place with regard to our first group of Active claimants: by putting Severity Class 2 Pending claimants ahead (before) any new Pending claimant coming in on or after August 17, 2021 (again, these being Tier 2 Pending claimants) regardless of Severity Class.
We think this is fair, and we think it is the right thing to do. Next summer, when we are expecting roughly $36M in funding, we want to hit the ground running by authorizing Participation Agreements for our first group of Pendings…these Pendings include condos and stand-alone homes. We’ll be issuing Participation Agreements to some Pendings who thought they might have to wait another four years at a minimum.
If the process works as it should work, we’ll be able to start opening and working with (from the beginning) Tier 2 Pendings in the summer or fall of 2023.
It always depends on the schedule of our flow of funds, which now, thanks to Governor Lamont and his entire team, has much more certainty than it did before.
In short, we’re going to spend the next five months cleaning up the Participation Agreement line (which means actually getting our first Severity Class 2 claimants into the process of remediation) and working through the summer and fall’s remediation construction process. In January, when the ongoing construction process slows down, our team will start to actively triage the existing first group of Pending claimants.
As we have said, our goal has always been to move as quickly as the schedule and our funding allow. Our goal is 500 families back in their homes by Labor Day of 2022.
The Next $20M Is on the Way…
At the July 23 Connecticut Bond Commission meeting, the members of the Commission, headed by Governor Lamont, voted unanimously to provide CFSIC with our next $20 million bond allotment…the last $20M of the original $100M pledged in 2017.
This is a vote of confidence by Governor Lamont and the other members of the Commission in the work that CFSIC as a tax-exempt insurer is doing to face the crumbling foundations crisis head-on.
Once the next $20M has been received, we will be re-opening for Participation Agreements rapidly. It’s very important and very encouraging to note that, with this next $20M, we’ll actually be getting to our first group of Severity Class 2 claimants, who have been in line for some time, including from the actual inception of the program. At least 51 Severity Class 2 claimants will be receiving Participation Agreements, and this is a major milestone in our program.
As previously announced on this page, as of July 5, 2021, CFSIC’s board has pledged to get to every Severity Class 3 and 2 claimant in the PA who had been in the PA line prior to July 5, before we get to the next group of Severity Class 3s.
Meanwhile, starting in January, we will be able to start working on existing Pending claims in depth for the first time, in order to move as many of those who are Severity Class 3 claimants into the PA line after July 1, 2022, which is when our next round of funding will be available.
87% of the Crisis Is Here
Almost two-and-a-half years since CFSIC opened its doors, we now have solid information as to where 87% of our claimants live. It’s exactly where both you and we suspected. Click here to see current results (PDF).
A Message for Severity Class 1 Claimants
We know who you are; we have not and we will not lose track of your original claim.
We know that you understand that we don’t replace perfect foundations.
If at any point you believe that your foundation has “migrated” to a higher severity class code, you can always engage with one of CFSIC’s certified home inspectors, who can help you. That list can be found here (PDF).
We were pleased this past week to get Kevin Miller’s latest white paper on the science of concrete failure. Click here to see what Kevin has to say (PDF).
Edition #5 of his series focuses this week very specifically on what to look for with the manifestations of failing concrete.
CFSIC is committed to giving good practical advice to claimants facing the uncertainty of this crisis. We are committed to using our taxpayer resources in the most efficient and helpful way.
$100 Million More Pledged
Last week, Governor Lamont signed the bond authorization bill which, among other things, will provide CFSIC with another $100 million in annual installments of $25 million beginning on July 1, 2022.
To be clear, we won’t have the first installment until July 1, 2022…so if you are a Pending claimant (certain PUDs excepted) we won’t be getting to your claim until the summer of 2022 at the earliest.
This is outstanding news for the CFSIC program and is a testament to state government’s belief that CFSIC is doing the right kind of job as all of us address the crumbling foundations natural disaster.
This very important milestone in the development of CFSIC, coupled with the removal of CFSIC’s original sunset date, means that we’ll be getting to more claimants than we thought possible…and getting to them much faster.
Important Claimant/Contractor Announcement
Effective today, CFSIC will be re-emphasizing and enforcing two important administrative rules designed to level the playing field for all claimants.
We urge both claimants and contractors to pay close attention…particularly contractors.
First, Let’s Talk About Installments…
When a proposal is provided by a contractor to a claimant, that proposal must allocate the total of any applicable homeowner contribution to the claim across all claim payment installments that the contractor and homeowner have agreed to in the contract.
If the project deposit paid by CFSIC also requires a homeowner contribution, if specified in the contract, the contribution to that installment is to be included in the total number of installments.
Here’s an example:
Let’s use a project where total costs are $200,000 across all three sections of the normal contractor proposal, and where contract Section 1 allowable costs are $180,000 in total. This means that CFSIC’s contribution will be $175,000 (our cap), and the homeowner’s contribution will be $25,000 for all three sections of the contract in total.
The contractor will be billing CFSIC for a deposit of $17,500 (10% of CFSIC’s cap of $175,000) and, in this example, will require that the homeowner make a financial contribution to each installment in an amount agreed upon between the contractor and the homeowner…but here’s the important point: EACH INSTALLMENT DUE MUST INCLUDE A PORTION OF THE HOMEOWNER CONTRIBUTION.
This does not mean that if there are four installments in total (inclusive of the deposit) that the $25,000 homeowner contribution in question in this example must equal $6,250 for each installment. The amount the homeowner contributes in each installment is between the homeowner and the contractor at the time the contract is signed.
What this does mean…is if the homeowner must contribute $25,000 and there are four installments specified in the contract, then that $25,000 gets divided so that the entire homeowner contribution is somehow covered over the four installments. CFSIC will not permit a contract to be entered into where the homeowner’s contribution isn’t spaced over the totality of the number of installments…including the last one.
Said another way…if the homeowner has “skin in the game” in the remediation of a foundation, that homeowner must have skin in the game at each and every installment due on the project and must pay first before CFSIC pays the contractor.
The installments don’t have to be equal in amount, but the amount of the homeowner’s contribution must be a part of each installment, and smart homeowners will understand why.
It doesn’t make any difference if the homeowner’s contribution is very minor, and the claimant’s preference would be to pay their share all at once as a result. CFSIC will not permit anything except installment contributions by homeowners.
CFSIC has a rule that has been in force since Day One: it will not pay a contractor’s installment if the homeowner has not already paid his or her share on that installment, and we have a copy of a cancelled check. This is a rule we’re not going change, as it provides a way for homeowners to register with contractors and with us any dissatisfaction they may have with the quality or progress of the remediation.
This is the way that the system has worked for some time, and we cannot permit any abuses of it. A homeowner cannot pre-pay, in the example shown above, their $25,000 contribution in a lump sum at any point. It must be in installments.
Any claimant refusing to comply will jeopardize the completion of his or her foundation through CFSIC.
Now Let’s Talk About Sticking to the Construction Contract…
Secondly, we are going to re-emphasize another important part of the program with respect to contractors.
If you’re a contractor and you have prescribed installment payments to be made both by CFSIC and the homeowner in your contract at defined points, effective immediately you’ll be held accountable to making certain that those installments are invoiced when they are due in a timely way, and CFSIC will require that you adhere to this.
You will not be permitted to bill for multiple installments at the same time effective July 12, 2021. Contractors must exercise business discipline and get their subs and everyone else to submit expenses promptly, so that invoices can be presented to CFSIC through ESIS according to the contract’s schedule. (And by the way…CFSIC will not permit the schedule to be such that installments are due in the contract one or two days after the other…so that’s off the table.)
Beginning on July 12, 2021, contractors must invoice the program based on the installments outlined in the construction contract, and where sufficient back-up, inclusive of photographic evidence, is included with each installment invoice to warrant the payment of the installment due by CFSIC (part of that back-up will be the cancelled check of the homeowner making the installment payment before we make ours…so the presumption is that the contractor has billed the claimant first).
Any contractor not adhering to regular invoicing at what CFSIC deems to be reasonable intervals, as prescribed in the signed contract and outlined on the payment schedule in the contract, with sufficient backup for the requested payment…again, according to the contract wording…will forfeit his or her place in the CFSIC program.
Additionally, we will hold contractors accountable to written descriptions in their contracts with regard to when progress payments are due under the contract. ESIS staff will not approve and the Superintendent will not pay any installment where at least a brief description of the progress work performed is not shown in the contract as part of each installment and where insufficient backup is provided.
Lastly, what this means on a going-forward basis is strict adherence to the process outlined in this Latest News entry. What it means for contracts already in force and signed is strict adherence to what’s already in the contract. No doubling up or trebling up on invoicing, and no pre-payment by any homeowner of the total amount due on a contract in the first or any installment payment.
We know that everyone will understand that there are contractors who do things right, do things correctly, and do things by the book…and there are contractors who are “still learning the ropes.” CFSIC will be getting those contractors on board with the program effective July 12.
Understanding What Will Happen Beginning Today
Directly below this edition of Latest News, you will find what we published last Monday regarding significant changes in the program aimed at putting as many families into the Participation Agreement line as we can.
Today, July 5, 2021, we begin a robust process to do just that.
Within 180 days from today, we’re going to welcome a number of new Active claimants into the PA line. We’re also going to be saying good-bye to a few claimants who have not taken the actions necessary to follow through with their claims. These claimants stand in the way of other claimants who need our resources. Either way, we’re going to prepare our program to start addressing Pending claimants on and after July 1, 2022.
Also, a reminder to condos:
Within 180 days from today, if condo associations with Active or Inactive Severity 3 or 2 claims have not submitted signed contracts for remediation to ESIS, we’ll begin the process of removing those buildings entirely from the program. There’s no time better than right now to start this process. CFSIC’s board took a lot of heat a few months ago when the usual social media nonsense accused CFSIC of purposely holding condos back. In other words, keeping them out of the PA line. It was untrue then, and it is untrue now. In order for a condo association to make the decision, not only to seek multiple proposals, but also to vet those proposals through board action, the process is much lengthier than any of the social media critics understand. A condo association simply can’t move as quickly as an individual homeowner can. No one at CFSIC has ever prevented a condo association from getting into the PA line, and no one ever will.
Condos with Active or Inactive Severity Class 3 or 2 claims, but carrying no signed construction contracts on those claims, have (like everyone else) 180 days to seek proposals, to get proposals submitted to ESIS for review and approval, and to sign the chosen proposals. The time for action begins today.
The Need to Get in Line…
We refer everyone to the Latest News article from last week found below this posting.
With 321 families back in their homes, and with homes lifted all over the Northeast Corner now…and most importantly with the firm expectation that CFSIC will receive another $100M beginning on July 1, 2022 in four annual installments…the time for you to get into the Participation Agreement line is now.
We will be working closely with existing Active claimants to move them into the PA line or move them out of the program entirely, beginning on July 5, 2021. To be in the PA line is not an absolute promise of funding. It never has been. But with another $100M we are going to be able to get more families funded and their claims paid than we had anticipated at the beginning of the CFSIC program.
One thing follows the other. You can’t get funded without being in the PA line. You can’t get into the PA line if you are an Inactive claimant unless you become Active. You can’t get into the line as an Active claimant without doing what you have to, to get in line.
If you are an Active claimant, you already have a claim number assigned to you. ESIS has an Active claim file on your foundation within our system. We track all claimants (whether Active, Inactive, or Pending) but we are paying very close attention to Active claimants who are not stepping up to the plate to take the final lap with us. These Active claimants must get into the PA line within 180 days from July 5, 2021, or they will be removed from the program as if they had never applied.
We cannot stress enough to Active claimants the importance of taking the final steps you need to, to secure a minimum of two valid construction proposals, sign a final construction contract, and otherwise take the final lap in this race towards the finish line…which is a remediated foundation.
With our anticipated new $100 million bond funding commitment, we have important news for our Pending claimants.
With just the Healthy Homes surcharge funds coming in, after the removal of our sunset date, we had expected not to be able to get to Pending claimants until 2025 or 2026 at the earliest.
With an anticipated $35M arriving next summer and for three more years thereafter, we’re going to open our doors to begin helping Pending claimants in 2022… three to four years in advance of when we thought this would be possible. Our starting to work with Pending claimants will begin after July 1, 2022…and not before…with one important exception noted below.
We have a few issues before us that we must fix in order to make certain that by next summer we are ready to work with our Pending claimants.
CFSIC’s Board of Directors and Superintendent all have agreed that we can’t get to any Pending claimants before all existing Active Severity Class 3 and 2 claimants are put in the Participation Agreement line for eventual funding. With our anticipation of new funding next year, we’re going to redouble our efforts now to make sure that we put as many existing Active Severity Class 3 and 2 claimants in the PA line as possible, beginning on July 5, 2021.
With today’s notice, we are announcing changes to our Underwriting and Claims Management Guidelines, which will take effect on July 5, 2021 and which concern only CFSIC Type 1 claimants.
As a summary, here’s how all this is going to work:
First, It’s About Active 3s and 2s
– If you are an existing Active Severity Class 3 or 2 claimant who has not yet gone through the construction proposal and approval process (including a stand-alone home or a condominium association building), in order to clear the way for your movement into the PA line, you will have 180 days beginning from July 5, 2021 to take all the steps necessary to complete the process, including the approval by ESIS of a fully-signed construction contract, enabling ESIS to put you in the Participation Agreement line for eventual funding. If you do not complete that process within the time frame noted above, your claim will be removed from the program.
It’s Also About PUDs
– If you are now an Active Severity Class 3 or 2 claimant who owns a PUD unit on a multiple-unit platform, you should be aware that, if you share that platform with Pending claimants, ESIS staff will be reaching out to those Pending claimants after July 5, offering to assist them in becoming Active (if they can be made Active). Those Pending claimant unit owners will have 180 days, beginning from July 5, 2021, to take the steps necessary to convert their Pending claims to Active status, so that the entire foundation platform can be placed in the PA line. If these Pending claimants do not complete that process within that time frame, they will be removed from the program, and the only option open to any existing Active PUD claimant on a multiple-unit platform with non-compliant Pendings will be to seek remediation for that Active unit without regard to any other claimants on the foundation platform, if that is structurally and socially possible. If that is not possible, those Active claimants will be removed from the program.
– Similarly, if you are now an Active Severity Class 3 or 2 claimant who owns a PUD unit on a multiple-unit PUD platform where other unit owners have no intention of participating in the program as is shown by their refusal to apply, the only remedy open to you will be the possible remediation of individual Active units where applicable. Any current (as of July 5, 2021) Active Severity Class 3 or 2 PUD claimant on a multiple-unit platform, who is not yet in the PA line, where other homeowners on that platform refuse to apply, will have 180 days to get into the PA line or be removed from the program.
Re-Inventing CFSIC One More Time
It is important to point out that there are many existing Severity Class 3 and 2 claimants now in the Participation Agreement line. They are awaiting the funding of their claims. These existing claimants in line for help will take precedence over any Active claimant entering the PA line on or after July 5, 2021, even if that claimant is a Severity Class 3 claimant. Anyone entering the PA line on or after July 5, 2021 will not have their Participation Agreement issued until all existing Active Severity Class 3s and 2s who were in the Participation Agreement line prior to July 5 have had their Participation Agreements issued.
On a one-time basis, beginning at 9:00 AM on July 5, 2021, we are going to adjust our guidelines so that any Active Severity Class 3 or 2 who comes into the Participation Agreement line on or after that date will not have their Participation Agreement issued until all existing Active Severity Class 3s and 2s in the Participation Agreement line prior to July 5 have had their Participation Agreements issued.
Making Inactive Claimants Active
If you are an Inactive Severity Class 3 or 2 claimant on July 5, 2021, you will have 180 days from that date to convert your claim to Active status, and from Active status to do what is necessary to enable ESIS staff to move you into the Participation Agreement line. At the end of 180 days, if this has not happened, you will be removed from the program.
What follows below is a Q&A section to help us all understand these important new changes.
Question: I’m the president of a condo association, and we’ve been busy with our Severity Class 3 buildings. We’ve also got a Severity Class 2 building that’s an Active claim, but where we haven’t gotten around to getting any construction proposals yet. Does this change apply to our association?
Answer: Yes. Your association will have 180 days to work with your assigned adjuster to get fully into the PA line for eventual funding, or your claim will be removed from the program.
Question: Are we talking about the Participation Agreement line or when my claim gets funded?
Answer: We’re talking about the Participation Agreement line. There is always a time gap between getting into the PA line and actually getting a signed PA, which signals the commencement of your funding.
Question: It looks like you’re going to put PUD Pendings in line ahead of all other Pendings?
Answer: Yes. But only for 180 days, and only if there is at least one Active Severity Class 3 or 2 claimant sharing the same foundation platform.
Question: How is that fair?
Answer: It’s fair for a few reasons. First, we’re only going to do it if those Pendings share a foundation platform with one or more existing Active claimants. Secondly, we’re trying to get to stand-alone homes with Pending claims. This is not going to happen for years unless we move quickly to get everybody who is already an Active Severity Class 3 or 2 into the PA line in the next 180 days. Remember something fundamental about what we’re doing: we need to get to “regular” Pendings as quickly as we can after July 1, 2022, and that means getting PUD Pendings who share a foundation platform with Active PUD claimants into the PA line, because they share a platform with Active claimants who cannot otherwise move ahead with their claim.
Question: I have an Inactive Severity Class 2 claim. Does all this apply to me?
Answer: It does. You have 180 days from July 5, 2021 to first make your claim Active and, once your claim is Active, to get it moved into the PA line. If you don’t do this, we’ll remove you from the program.
Question: I’m an Active Severity 3 claimant and had hoped to get another year of property tax abatement before my claim got moved into the PA line.
Answer: If a couple of thousand dollars of property tax abatement is worth more to you than returning the full value of your home to you, then we wish you luck…180 days from July 5, 2021, you will be removed from the program unless you follow through completely with the claim process and get into the PA line.
Question: Sounds like you’re expecting to get to a large number of Severity Class 2 claimants in the PA line this summer…is that correct?
Answer: It is correct.
Question: I’m on a four-unit PUD platform where there are two Active claimants, and I am one of them. The remaining two homeowners have told me they will never apply to the program. Is there any way that CFSIC can help me with this problem?
Answer: No. The Superintendent has met on three occasions with multiple-unit PUD platform owners. There is nothing more that we can do, except encourage you to find a construction solution that will enable you to get your foundation remediated in a way that will isolate the neighbors who will not assist you.
You Can’t Get Too Basic…
We at CFSIC believe that you can’t get too basic. In the May installment of Kevin Miller’s important series of articles on the causes of the crumbling foundations crisis, Kevin discusses how quality concrete is made, the importance of water, and the science behind what happens…when what happens goes wrong.
CFSIC is committed to being the focal point of information about the crisis and, of course, about its causes.
Kevin’s article is important reading, and we recommend it to everyone concerned about the crumbling foundations natural disaster. Read the article. (PDF)
Promoting Concrete Science…
CFSIC’s Board of Directors is committed to the facts about the science of concrete failure. The way forward to more funding and more remediation has always been knowledge about the depth and extent of the crisis.
We’re pleased to publish Kevin Miller’s second in a series of monthly articles…this edition focusing on the science of why concrete foundations fail. There’s also a good glossary of terms that will assist everyone with understanding more about concrete foundation failure.
Click here to read this article (PDF). CFSIC is committed to spreading the word about why concrete foundations fail.
Victims Need Access to CDBG Funds
CFSIC believes that Congressman Courtney’s continuing position with regard to HUD’s Community Development Block Grant program is the right position. The state of Connecticut has access to CDBG funds. It’s true that these funds are subject to income limitations… but CFSIC’s board believes that any available federal funds that can be used to help homeowners, should be used to help homeowners. It just makes sense. Over the last two years a number of homeowners have withdrawn their CFSIC applications because they cannot raise the money needed to supplement what CFSIC will pay for. In a number of cases, we’re talking about less than $10,000, which the homeowner in question simply doesn’t have. It makes no sense that this is happening. CFSIC encourages our friends at the Department of Housing to revisit ways in which claimants, who have met all of our underwriting criteria, can access needed CDBG funds to get their homes fixed and their lives put back together again.
Spotlight on Ashford
Let’s consider Ashford.
Here are some important facts and figures for those interested in the known extent of the crumbling foundations crisis in this town:
– CFSIC has 33 registered claimants in 27 months.
– Of this number, 7 are Pending claimants.
– CFSIC has recorded 31 Type 1 claimants where severity class codings have been independently verified…21 of these are Severity Class 3.
– CFSIC has paid $1,486,715 in foundation remediation and reimbursement claims.
– Currently, CFSIC carries on its books outstanding claim liabilities for known claimants of $1,199,970. (None of the 7 Pendings are accounted for in these carried and booked liabilities.)
– CFSIC has completed 10 foundations in Ashford for a total value of $1,469,215. (This results in an average replacement value for allowable costs of $146,921, which is approximately $7,000 lower per foundation replacement than CFSIC’s current total replacement average across the entire affected area.) In addition, this is approximately $29,000 below CFSIC’s cap of $175,000…proving again that CFSIC’s cap not only works, but applies in the broadest way to the victims in the entire affected area.
– Estimated value of all Pendings currently registered with us from Ashford is $1,079,652.
– If CFSIC’s sunset date is not moved to a minimum of 2030, at least 80% of our known 7 Pending claimants will be left behind.
CFSIC Promotes Concrete Science
This week we begin a series of articles authored by Kevin Miller, an acknowledged specialist in the science of concrete failure, focusing on the crumbling foundations crisis and providing facts about why the crisis has occurred and what we can all do about it.
Kevin’s articles will be informative and easy to read, and will shine a bright light on the crumbling foundations natural disaster.
For More Information About Pending Claimants…
To read a Q&A that will help you understand the Pending claimant process, see below.
Question: I have a verified Severity Class coded 3 foundation, and I just found that out. If I apply, do I get in line right away?
Answer: No. All you can become, once we re-open our doors for applications on December 7, 2020, is a “Pending Claimant” with a Severity Class 3 foundation. You will be joining, when you apply, a list of existing Pending claimants, many of whom are also Severity Class 3. At this point, applying as a Pending claimant does not put you in line for remediation…it only allows you to register the existence of your impaired foundation with us.
Question: Are you saying that, even if I have a completed application and a verified Severity Class code 3 foundation, you will be unable to make my claim “Active” or even “Inactive” on or after December 7, 2020?
Answer: That’s currently correct. You will not be able to become an Active or Inactive claimant until all current Active and Inactive claimants now in line have their claims fully adjusted and their funds committed by CFSIC. You will be a Pending claimant. You may remain a Pending claimant for a very long time. You may never receive any funding, given our current projection of revenue between now and June 30, 2030.
Question: But don’t you know for certain that you’ll be getting one more payment of $20 million sometime after July 1 of 2021 and around $11.6 million to $12.0 million in June of 2021 and every year thereafter through June 30, 2030 (if they change the current sunset date of June 30, 2022)?
Answer: We have every expectation of getting our last $20 million of Bond Commission funding in the summer of ’21, and we believe that we’ll get $11.6M to $12.0M at around the same time for the second installment of Healthy Homes funding. We should get eight more installments of Healthy Homes funds after that, annually, for similar amounts. But we want to be clear…all that funding is currently allotted to Active, and Inactive claimants (who will become Active), with Severity Class 3 and 2 foundations, most probably through the end of 2026 or the beginning of 2027. If at that time we get through the current list of those in line for a Participation Agreement, as well as others who can move into that line, in 2027 we are only going to start to get to between 150 and 200 Pending claimants who were already been in line before December 7, 2020.
Question: So if I apply as a Pending claimant now, do I still get a claim number?
Answer: You do, and that claim number means you are registered in our system.
Question: So that means a claim adjuster will reach out to me?
Answer: No. You will have no contact with a claim adjuster. You won’t have that contact until and unless your claim moves into Inactive or Active status. CFSIC’s adjusters are very busy managing the day-to-day process of existing Active and Inactive claimants as well as all the construction associated with those claims.
Question: Can I file a claim as a Pending claimant and I just file the application, even if I don’t have all my points of evidence?
Answer: You can…and you will still get a claim number…but remember: you will never be able to move beyond that point to Active status, if funds become available, until your application is complete in each and every regard.
Question: So if the sunset date gets moved, you get enough money in June of 2021, and you make my Pending claim an Active claim in, say, 2028, and I am a Severity Class 3, that means I jump ahead of all the existing Active Severity Class 2s that have been in line since January 10, 2019…right?
Answer: No. As of January 13, 2020, we are not going to permit any Severity Class 3 claim originally filed as a Pending claim to jump ahead of an Active Severity Class code 2 already registered with us as an Active claim prior to January 13, 2020. We have many Active Severity Class coded 2 claimants who have been in line since January of 2019, and we have determined that it is fair to issue Participation Agreements first for all existing Active 3s and 2s in our system before any Pending claimant can get in line for a Participation Agreement. This is only fair, given how long people have waited.
Question: But I thought Severity Class coded 3 claimants would always be ahead of everyone else. What has changed?
Answer: CFSIC’s Underwriting and Claims Management Guidelines changed effective January 13, 2020, and that change was published on this site, to require that CFSIC issue Participation Agreements to valid, Active Severity Class 3 and 2 claimants who have been in line since the inception of our program before we move any Pending claimants into Active or even Inactive status…regardless of funding amounts to come.
Question: This sounds very discouraging. I guess I’m wondering why I would bother to register my claim with CFSIC given this outlook for the future.
Answer: The choice to apply, of course, is yours. But there are a few reasons why you might want to do this. First, to the extent more funds are made available legislatively in future, we may be able to get to you and get to you sooner than anticipated. Also, you should be aware that there has been some discussion with the Superintendent’s office and officials of state government about the possibility of accelerating part or all of our anticipated Healthy Homes funding. We have no idea where these discussion are going, as they are in the most preliminary phase. Also, if you are a valid Pending claimant who has registered your claim with us, and you decide later to sell your home, as a Pending claimant validly in our system you can transfer your claim to the person buying your home. This may have some value to you. Lastly, we encourage homeowners to think of the greater good…the more claimants in our system who hold Pending status, the greater likelihood, we think, of making a valid case for increased funding at the state and/or federal level.
Question: I plan to file on December 14 as a Pending reimbursement claimant (Type 2). Do I have to wait for assistance until you start addressing all Pending claimants, or can I get in line for help faster?
Answer: The answer is you will have to wait until we start addressing all Pending claimants as a group.
Is Your Claim Still Inactive?
We’re pleased to report that fewer and fewer CFSIC claimants are categorized as Inactive.
Right now, we have a total of 13 Inactive claimants (not counting Pending claimants who cannot be made Active, or even Inactive, for the foreseeable future).
Seven of those Severity Class 3 claimants are Inactive primarily due to incomplete applications; three claimants are awaiting approvals/declinations of their commercial insurance claims; and three are still in litigation.
Among Severity Class 2 claimants, none are in litigation; two are awaiting approvals/declinations of their commercial insurance claims; and one is Inactive because of an administrative issue.
It’s important to point out that these numbers are far fewer than we saw a year ago. It means that claimants are working hard to make their files active, which is the only way, once more funding arrives, for them to get in line for a Participation Agreement.
CFSIC’s 2020 Annual Audit
CFSIC believes that reasonable transparency about all important aspects of our operations is important. This is in keeping not only with our stated mission of service, but also with our federal tax-exempt status as a 501(c)(3). You can find CFSIC’s audited financial report for the period ended June 30, 2020 here. CFSIC was audited by an independent auditor chosen by CFSIC’s board of directors, and where that auditor reports directly to CFSIC’s board with its findings and conclusions. This auditor did in fact report to CFSIC’s board at the recent Annual Meeting of CFSIC. The audit is a qualified opinion. It is qualified because CFSIC books and carries recorded and identified claim liabilities well in excess of its current assets. This is a practice permitted by the Connecticut Insurance Department. With the exception of the qualified opinion for the reason noted above, the auditor’s opinion was clean in all other respects. No internal control deficiencies were noted. 120 randomly selected claims and disbursements were tested for adherence to written policies and procedures. Disbursements were checked and verified.
Transferring Your Claim
All CFSIC claimants (not just active claimants) will be able to transfer their existing inactive or Pending claims to a buyer of their home effective July 13, 2020, retroactive to June 1, 2020. Today, we are publishing on this site the following:
– red-marked changes to CFSIC’s Underwriting and Claims Management Guidelines;
– a new subsection, subsection 20, in the “For Homeowners” section of this site, which will detail how the process will work, inclusive of Q&A;
– a templated Claim Transfer Agreement governing the transfer of a claim in the “For Homeowners” section;
– a new subsection, subsection 11, in the “For Contractors” section of this site, providing claim transfer information for contractors.
What follows is an expanded (expanded from last week) Q&A about this important change.
Question: I’m a Type 1, severity Class 2, inactive claimant. If I sell my home and transfer my claim to the buyer, does that change the status of my claim?
Answer: No. The buyer gets the exact status you had at the moment of transfer.
Question: I’m in line for a Participation Agreement and have been in line for a while. I’ve been told that I may be in the next round of funding at some point after July 1, 2020, but I still plan to sell my house and give up my claim. Does my exact place in line for a Participation Agreement get transferred to the buyer?
Answer: Yes, if the buyer agrees to all terms and conditions of the Claim Transfer Agreement.
Question: Where can I find a sample of the Claim Transfer Agreement on this site?
Question: I’m a Pending claimant, and I’m aware that, given current anticipated projected funding, I may never get my claim paid unless CFSIC gets more money. If I transfer my claim because I sell my home, will the buyer be taking the same risk I am?
Answer: Absolutely. We may never have enough money to address Pending claimants.
Question: Can I transfer my claim without selling my home?
Question: Does this apply to condos? Does it apply to PUDs?
Answer: No for condos. (Remember that condo unit owners are technically not our claimants… associations are our claimants, because it is the association that owns the foundation.) It applies to PUDs.
Question: I’m a Type 2 claimant. Does it apply to my claim?
Question: Once I transfer my Type 1 claim to the buyer, can he or she re-sell the home and transfer the claim again?
Answer: No. The transfer of a claim can occur only once…from one Original Claimant to one Transfer Claimant. It can never be transferred again by the Transfer Claimant.
Question: Will I be able to sell my home first and then transfer the claim at some point after that?
Answer: No. The Claim Transfer Agreement date can only be the same date as the date of the sale of the home or a date prior to the sale. It it’s prior to the date of sale, and for some reason the sale does not go through…then the transfer is voided as if it had never occurred.
Question: OK, but I sold my house in the middle of June…how will the retroactive June 1 date affect me?
Answer: As stated above, on and after July 13, 2020, the date of the Claim Transfer Agreement must be the date of the sale of the home or a date prior to the sale. It cannot, however, be a date prior to June 1, 2020. In your example, you would still qualify.
Question: So are you saying that if I sold my home on May 15, 2020, I’m disqualified?
Answer: Yes, that’s what we’re saying…besides, at the date of sale you ceased to be a CFSIC claimant anyway, and the correct thing to do would have been to notify ESIS of your status so that someone else could have access to your funds. We are grandfathering this process back to June 1 as an accommodation only.
Question: Are you still going to stop the Pending application process on June 30 as previously announced?
Answer: Yes. We have already done so.
Question: I’m a Type 1, severity Class 3 active claimant. So if I transfer my claim to the buyer of my home, what am I really doing?
Answer: Looks like you don’t have a Participation Agreement yet, based on the question. So, what you’re doing is transferring almost every right, obligation, and duty you had for your active claim to the buyer of your home, who then agrees to take over those rights, duties, and obligations.
Question: But I’ve got a signed contract and am in line for a Participation Agreement. What happens if the buyer and the contractor can’t agree on the terms of the original contract or, alternatively, the contractor simply backs out of the arrangement?
Answer: The buyer can seek the required two proposals for construction services from CRCOG-approved contractors to substitute for the original contractor, one of which will eventually substitute for the original contract. CFSIC will keep an active claim “active” for a period of 180 days from the date of the Claim Transfer Agreement in order to allow time for this to happen. If it isn’t accomplished by then, the claim is removed from our system, it is no longer active, and the buyer is no longer in line…and must therefore start the process all over again as if the claim had never transferred. If we are not accepting applications at the time that happens, then the buyer may have to wait for years to reapply, or may never get an opportunity.
Question: Who is responsible for contacting ESIS ProClaim to tell them about the sale of a home?
Answer: Only the original homeowner (Original Claimant). ESIS will not accept communications of any kind from real estate agents or from Transfer Claimants (home buyers) regarding a claim transfer.
Question: Okay…what happens then?
Answer: When you provide ESIS ProClaim with your claim number by phone or email and indicate that you want to transfer your claim to the buyer of your home, they will provide you with a Claim Transfer Data Form to complete. You will send it back to them completed. The Superintendent’s office will then contact you and send you a Claim Transfer Agreement, which will require your signature and that of the buyer, as well as separate witnesses. You will return the fully-executed Claim Transfer Agreement back to the Superintendent’s office. Once this agreement is fully executed and received in the Superintendent’s office, the transfer of the claim can occur, and the permanent records of the claim are changed with regard to who the claimant is.
Question: I’ve already signed a proposal with a contractor. Who is responsible for telling the contractor that I’m selling my home?
Answer: You are. It is not ESIS ProClaim’s responsibility or CFSIC’s responsibility to do this. It also cannot be the real estate agent or the homebuyer. If you want to transfer your claim, you have to do this yourself.
Question: What will CFSIC accept as evidence that the Original Claimant has transferred the home to the Transfer Claimant?
Answer: A copy of the recorded deed.
Question: But I have a CHFA loan agreement that I’ve just entered into. What happens to that?
Answer: You have to address that with CHFA.
Question: My contractor started work on my foundation last week. Can I still transfer my claim?
Answer: No. Once work starts on your foundation, you have to see it through, or you terminate your construction contract. We cannot permit a claim to transfer if even the most preliminary part of the remediation process has begun.
The CHFA Credit Enhancements Program
You should go here to learn more about the CHFA credit enhancements program as it is now constituted. Please note that it currently does not apply to condominiums. CFSIC did not create and is not administering the loan program, and the ESIS claim team cannot advise you in any way about the terms and conditions of any aspect of the program. The link noted in this section will take you to an outline of the program, as well as to a section marked “Frequently Asked Questions.” We also recommend contacting the Homeowner Advocate using the contact information on the Department of Housing website for more assistance.
CFSIC’s 2020 Annual Report
If you have any questions about the operation of the program, ESIS is your best source of information on your claim, and their phone number and email are shown below.
As you work through the information and application process (understanding that we are in suspension for the taking of new applications), here’s how you can get help:
– Call ESIS (the claim adjuster) at: 844-763-1207
– Email ESIS at: email@example.com
– Email CFSIC at: firstname.lastname@example.org