The Pesky Natural Mineral Shaking The Foundations Of Massachusetts Real Estate

A mineral known as pyrrhotite, which occurs naturally in New England, is wreaking havoc on homeowners across Massachusetts. Pyrrhotite causes concrete, the foundation material for many homes in Central Massachusetts, to deteriorate and then crumble. When pyrrhotite deterioration is discovered, the homeowner has two equally undesirable choices: make expensive repairs or risk the home's foundation crumbling.

Because of the extensive scope of the necessary work, it's not uncommon for the repairs to cost tens or even hundreds of thousands of dollars. According to a FEMA case study on pyrrhotite in neighboring Connecticut, the only way to properly repair a foundation where pyrrhotite has been discovered is to "lift the house off the foundation and completely replace all the concrete."

Many homeowners get an even nastier surprise when they discover their home insurance won't cover the repairs. Many others don't have insurance at all. Even if they did, the issue for insurers regarding covering pyrrhotite-related damages is that it does its devastating work slowly over time. If it destroyed the foundation immediately, catastrophic loss coverage might kick in.

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However, pyrrhotite takes years to destroy a foundation. Because of this, area insurers have adopted a policy of refusing to cover repair costs associated with pyrrhotite-related damage. This exacerbates the problem for homeowners. Many area banks and lenders are reluctant to lend homeowners the money they need to make the repairs, even if they have home equity.

Loan underwriters take a purely risk and numbers-based approach to loan approvals. Given this, why would they lend money on an asset where the foundation is crumbling? If the homeowner defaults, the bank will be stuck foreclosing on an investment with a crumbling foundation and trying to recoup that money at a public auction. It sounds like a recipe for losing money.

All of this is having a devastating effect on homeowners. Many have horror stories about suddenly being in a position where their most valuable asset is rendered worthless unless they make repairs they can't afford. Even if they try to sell, real estate disclosure laws will mandate they inform the buyer of the presence of pyrrhotite in the foundation. Decades of asset appreciation are being wiped away.

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Few things make a house less desirable than the knowledge it has a crumbling foundation that could cost several hundred thousand dollars to repair. The saddest aspect of this story is that the fates of many affected homes were sealed the day their foundation was poured. Because pyrrhotite is naturally occurring, it inevitably made its way into the concrete supply of quarries statewide.

Over several decades, developers across Massachusetts ordered and poured countless tons of pyrrhotite-contaminated concrete. Unfortunately for affected homeowners, the slow pace of pyrrhotite destruction means they are well beyond the time limit within which they could still hold their homebuilders liable for the damages.

State laws have also been updated, and quarries are now required to test for the presence of pyrrhotite in their concrete before shipping it. However, that only provides future relief and residents dealing with pyrrhotite-related foundation decay are suffering right now.

Many are banding together to fight back by seeking legislative relief by having Massachusetts adopt a solution similar to the one Connecticut employed to handle its pyrrhotite problem. State Sen. Ryan Fattman is one of the most vocal proponents of the proposed legislation.

During a meeting with affected homeowners, he said, "That is the main mechanism for which we can create a statewide program similar to what Connecticut did, where they added a fee onto homeowners' insurance and then seeded that money with a fund to fund out the change of foundations for homes that have this pyrrhotite crumbling foundation. And that’s what we hope to do here."

The future of the legislation isn't clear; however, it does appear there is a consensus that something must be done. If not, Massachusetts homeowners could continue to see their property values decline while pyrrhotite slowly destroys their home's foundation from within. That would eventually hit county budgets all over the state because assessments on private property are how most Massachusetts counties fund vital services like public education, fire, and police.

Pyrrhotite is a naturally occurring problem that few people could have seen coming. Now that it's here, Massachusetts lawmakers, homeowners, and insurance companies must arrive at a mutually amenable solution. If not, this pesky natural mineral could potentially threaten the foundations of Massachusetts' real estate market.   

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