Choosing a foundation repair contractor can be a little intimidating. What should you look for in selecting a contractor? Are there any good questions you should ask them that would let you know or not if they do quality work, or are trustworthy, reputable, honest, etc., etc.?
Why yes, as a matter of fact, there are some good questions to help you find out all of this . . .
At Anchor Foundation Repair, we know that homeowners are often wary and skeptical about any repair contractors. But after 35+ years of repairing foundations in Bryan, College Station, and the surrounding Brazos Valley communities, we can suggest questions to help you screen and select a foundation repair company, no matter where you live.
This article will go over 15 information-gathering questions to ask a prospective foundation repair contractor and explain why these questions (and their answers) are important so that you can select the right foundation repair company for you.
These questions are not really in any particular order of importance, just organized from broader to more specific.
One thing to really keep in mind about foundation repair is that it is an unregulated industry in the State of Texas. Your hairdresser or barber has more educational and licensing requirements than a foundation repairman! There is no stipulated formal training, no requirements for insurance or bonding, and no industry standards outlined by the state.
So, anyone with a shovel, wheelbarrow, and jack can call himself a foundation repair guy if he wants to (not sure why anyone would do that but . . .you never know). Not that this is a rampant problem or anything, but it’s just that the industry as a whole does not have rules and standards coming from the government or other regulating agencies.
SO, instead of relying on some kind of certification, score, or outside regulatory body to ensure that the foundation repair company is legit and knows what they are doing, ya kinda have to rely on your own investigation and impressions to hire the right company.
Asking *all the right questions* will really help you as a homeowner to sort through your choices and ensure that you get you a good one.
These 4 questions are just general ones about the business itself, like who owns it and how long have they been in business.
You might be able to find some answers to these questions in an online search. We recommend using the Better Business Bureau website because it shows ownership, headquarters, and years in business information.
Since there is no official training or education process for foundation repair in the State of Texas, it’s kind of a *wild west* unregulated industry. So if you can’t rely on some type of pedigree, diploma, license, or certification, you have to rely on history. Longevity in business is an indicator of experience and trust in the community.
A long-standing company is more likely to have honored warranty claims in the past and will continue to honor them in the future. Know-how and good business practices go hand in hand when a business is successful. Not that a new-ish company can’t be good, just know that staying-power is not established because they don’t have much of a track record.
You might not care about how local a business is right now. But if there is a problem or issue after the repair, you’ll want to be able to easily contact the company for help with a post-repair issue or warranty request.
Being in a smaller community, we see this a lot with various construction-related industries. Most recently, with roofers and hail damage. Some company shows up in town after a hail event and is offering *amazing deals* on roof replacements. But what happens later if there is an issue with your new roof and the company is nowhere to be found by then?
Look for a local, physical address — not just a P.O. Box either. An established address is an indicator that the company isn’t as likely to pick up and disappear when you need them most.
This is a bit of a trick question to see how a company answers it. As we touched on earlier, there IS no license that gets issued for foundation repair contractors in Texas. (We don’t know what other states do, so you should check on that also.)
Anyone that says they are licensed is either unfamiliar with the foundation repair industry here or they are using words in a misleading way.
As for insurance, you would probably appreciate a foundation repair contractor having insurance. These policies are for the protection of the homeowner. Technically though, insurance is not required in this unregulated industry either.
So if a company chooses to have insurance that protects homeowners, it’s a positive sign that they are concerned with your needs. Just remember that it means that your costs could be higher for the repairs since insurance costs increase overhead for a company.
Despite any best foundation repair efforts, homes may still move and need adjustments in the future. Anyone that says you will never need anything ever, ever again is not being honest.
Not all warranties are created equal. It’s important to ask for warranty terms and conditions in writing before signing any contracts or proposals. Look for information on the warranty claim process and exclusions. Be wary of any company that requires mandatory arbitration.
A great question to ask is, “How many warranty claims do you do per year?” You’ll want to hear that they do them and that the person answering has confidence in the info they offer.
Just because the industry as a whole has no particular regulations, doesn’t mean there are no rules whatsoever. There are still municipality rules with permitting and report requirements that you might contend with.
Before you ask a foundation repair contractor if they have to pull a permit, contact your city/municipality and find out the right answer. So you already know the answer for your location before you ask them the question to see if they get it right.
Most cities will have some permitting regulations, whereas smaller towns might not. Country properties will likely not have any sort of permitting requirements. If permits are required, *thems are the rules* and your contractor should be conscientious enough to follow them.
Most municipalities do not require a report from a structural engineer to begin work on home foundations. Two exceptions that we know of in Texas are in the Houston and DFW areas, but everywhere else engineering reports will likely not be required.
What you can ask a prospective foundation repair company is if they know if an engineer report is required. If the answer is yes, ask the contractor if they happen to offer the service or have any recommendations of who to use.
If you have to secure an engineer’s report to move forward with the foundation repair, this will be something that you have to pay for separately. Between $500 to $900 is an average cost to obtain a residential engineering report.
You’re checking to see how a foundation repair contractor manages their business and repair crews with these questions, as well as what kind of experience they have in the local area.
You would hope that a local foundation repair company has done work nearby and has experience with the homes in your area. Soil conditions are localized and even just a few miles away the soil properties and makeup can be different to work with. Ask if the work crew working at your home has experience in the immediate area.
Every contractor should be proud of their work and happy to provide you with a list of references. You might wonder why (red flag) if they can’t seem to comfortably refer you to past customers. Remember too that if they do give you a reference list, it’s going to include only their very happiest of customers. So, be sure to check their online web presence and information for a range of reviews to further validate your impressions.
These might sound like easy questions, and they are for someone who knows their employees. A foundation repair contractor should have quick and confident answers to these questions.
An experienced crew that has been around for a long time means the people repairing your foundation have extensive knowledge and are trusted by their employer to do a great job for you.
Repairing foundations is hard, dirty work that also requires skills and know-how that can only be learned through experience on the job since there is no mandated training and licensure. There’s a lot *resting* on your foundation (you know . . . like you, your family, and everything you own) so you want to know that the repair team has been around the block a time or two.
The use of subcontractors vs. employees is not necessarily a bad thing, but it can invite delays, miscommunication, and unchecked quality of work.
Find out if your prospective contractor has an experienced in-house team of employees that are training-verified, or if the contractor prefers to sub out a portion of their work to non-employees. Ask about their relationship with the subcontractor and how they know that those doing the work will be monitored for quality.
These are method and procedure-related questions. Finding out how a prospective foundation repair contractor does things will help you better understand what is happening at your home.
The chosen method of a foundation repair contractor is a big deal, and many homeowners do not realize that there are a few methods of slab foundation repair to choose from out there. Different methods will bring different degrees of stability, with their own pros and cons.
There is no “best” solution for all homes and homeowners. A reputable company can be proud of their work but should also be able to discuss its drawbacks.
For more information about methods of foundation repair, check out this article, “What Slab-on-Grade Foundation Repair Methods Are There? 6 Types.” For more details on the two most common repair methods in our Central Texas area, look into this one: “Bell-Bottom vs. Pressed Pile Foundation Repair Methods: What’s the Difference?.”
When a settled home is raised, your under-slab plumbing can be “raised” along with the foundation, and this can cause under-slab leaks or compromise your drain pipes. You may have even had a leak already that you didn’t know about that occurred when the home settled.
Leaks can happen under a home on the way up, as well as on the way down!
Many companies don’t concern themselves with your under-slab plumbing situation, they’re just there to fix the foundation and that’s it.
The hydrostatic plumbing test procedure is an easy way to verify that your under-slab plumbing has no issues or identify a problem to fix if there is one. Find out if the plumbing will be tested and what steps need to be taken to get the plumbing repaired.
If you are going through the trouble of getting your foundation repaired, you probably don’t want to leave a leak under your home afterward that can in turn cause more foundation issues if left unchecked. Also, plumbing leaks can even void any warranty claims so it’s important to be proactive on this issue.
When a home is raised during foundation repair, a space is created between the ground and the raised slab. That void is an opportunity for future foundation settlement if left as is. Find out if your prospective contractor has plans to fill the void under your home and how, in order to maximize support to the entire under-slab surface.
Foundation repair can be an intrusive process to the areas outside your home in particular. Ask for details on how the repair crew will care for outside areas, control the mess, and clean up afterward.
Ask about any particular outdoor features that are of concern to you near the home, like trees near your foundation, hardscaping, or even decor items. Find out if you need to move things out of the way yourself or if they plan to take care of some of this for you.
So far, we’ve covered things that are very general about any foundation repair project. These questions are about your home and your repair job in particular that you might want to know.
Timing can be a big factor for some homeowners, especially if you are trying to sell your home or a major holiday is coming up that you will be hosting at your home. There is a wide range of repair times from 2 days to 2 months. You will want to ask how long the foundation repair will take for your home.
Find out from your prospective contractor what can affect your timeline and make sure that everything about the timing will meet your needs.
Concrete slabs are not poured perfectly level at installation time and some irregularities are to be expected. Trying to raise a home to a perfectly level position can cause other problems with doors, trim, walls, and finishes.
Foundation repair is a bit of an art more than a science in this regard. Some homes need to be raised several inches, while others require them to be raised until a door works, and some are stabilized in place but not raised at all to take into consideration the cosmetic factors around your home or its degree of existing remodeling.
Ask the prospective contractor what tool or sign will be used as a guide in the raising process. Be wary of sophisticated level measuring tools that do not take functionality and appearance into account when lifting the home. The goal should be for things to work right, not necessarily to reach a perfectly level position.
You’re taking time to fully vet a foundation repair company, so your home must be important to you. In addition to asking a prospective foundation repair contractor these 15 questions, there’s more you can consider to make sure you find the right match for your needs.
That might mean talking to more than one contractor if the answers to all these questions or the repair bid does not leave you feeling confident. Getting a second opinion can help solidify your choices.
At Anchor Foundation Repair, we want what is best for you and your home. After doing business in the Brazos Valley since 1985, we find that impartial information and 100% transparency serves the community and builds the most trust in our business. We don’t even mind if you want to get a second opinion.
In fact, here’s an article all about second opinions that you can check out because sometimes they are just what you need, “Foundation Repair Second Opinions: When You Should Get One.”
The Council on Foundations is a membership organization that supports grantmakers in various aspects of foundation management. We have basic information to help with understanding the general steps in starting a foundation. The Council does not provide legal or technical assistance services for starting a foundation. We have a helpful publication, Starting a Foundation: Formation and Consideration, detailing the laws governing foundations and everything you need to consider to start a foundation.
For more information and assistance with starting a foundation, here are a few recommended places to start:
The Nonprofit Resource Library
Hurwit & Associates' Nonprofit Law Resource Library contains information on a number of subjects pertaining to nonprofit law, including nonprofit start-up issues, state filing and compliance, governance and board questions, mergers and affiliations, nonprofit entrepreneurship, charitable contributions, and more.
National Council of Nonprofits
The National Council of Nonprofits is the network of state and regional nonprofit associations serving more than 20,000 member organizations. By linking local nonprofit organizations across the nation through state associations, the National Council helps small and midsize nonprofits manage and lead more effectively, collaborate and exchange solutions, engage in critical policy issues affecting the sector, and achieve greater impact in their communities.
Recommended article:The Foundation Center
The Foundation Center is a national nonprofit service organization recognized as the nation’s leading authority on organized philanthropy, connecting nonprofits and the grantmakers supporting them to tools they can use and information they can trust. Its audiences include grantseekers, grantmakers, researchers, policymakers, the media, and the general public.
Local Legal Counsel
Locate legal counsel in your area. Finding an attorney who is knowledgeable and experienced in the field of tax-exempt and charitable foundation law is critical to complying with and understanding the rules that apply to both private and public foundations. Here are a few places to check for legal assistance within your community:
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The Council is a membership organization consisting primarily of grantmaking organizations, private operating foundations, and others supporting the field of philanthropy. While we welcome newly established organizations, we currently do not offer membership to organizations that have not yet formed under state and/or U.S. law, or the law of another country. We can, however, answer general questions and help connect you with resources to guide you through the start-up process.
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The information provided here begins to answer the question of how to start a foundation. It is not a substitute for obtaining advice from knowledgeable legal counsel familiar with the rules in your state who can walk you through the steps and critical decisions in establishing a foundation.
There are three general stages in forming a foundation:
At the incorporation stage and the tax exemption application stage, the new foundation must comply with legal requirements on the state and federal level. More information on forming a nonprofit on the state level may be obtained by visiting your state government’s website.
The focus at this stage is on what the foundation hopes to accomplish—its purpose and goals—and on building the initial core of support. Before you begin the formation process, there are several questions you should consider that will help you decide which type of foundation would best suit the needs of the new organization.
Answering questions such as the ones listed above can help you and your advisers determine which type of charitable organization or giving vehicle is right for you.
When starting a foundation, it is essential for the donor or the donor's advisor to comprehend—at the outset—the basic legal rules that govern the formation and regulate the activities of foundations. This process is completed under state law, and the requirements vary from state to state. First, you must choose what legal form your foundation will take. Your options are generally either a trust or corporation. It should be emphasized that whatever form one chooses, it will be specifically regulated by state law, not federal law.
Each state has its own set of statutes that set out the rules for forming and running both a trust and a not-for-profit corporation. When forming any organization, you and your advisors should also research other local filing requirements, such as charitable solicitation, local business registration, sales tax exemption, and state income tax exemption. For more information about additional filing requirements, visit the website of your state and/or local government.
To learn more about various filing requirements for private foundations, see the Tax Filing, Audits, and Public Disclosure Requirements of this website.
Once the organization is formed under state law, the next step is typically for the organization’s leaders to seek recognition from the IRS as a tax-exempt charity. Such recognition means that the organization will not have to pay federal tax on its income and the organization will be eligible to receive tax-deductible contributions. For most organizations, this process involves submitting IRS Form 1023, "Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code." This form can be found on the IRS website at www.irs.gov. Once the IRS receives your Form 1023, it will determine: (1) whether your organization should be a Section 501(c)(3) organization, (2) whether it considers the organization to be a private foundation or public charity, and (3) if it qualifies as a public charity, what legal form of public charity your organization will be.
There are a wide variety of tax-exempt organizations that are not charitable, and therefore are not 501(c)(3) organizations. For a complete list, visit the IRS website at https://www.irs.gov/charities-non-profits/types-of-tax-exempt-organizations.
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A trust is less formal in both its formation and operation. In most states, there are fewer requirements for trusts regarding regular meetings, minutes, state filings, officers, or other record keeping. However, amending the charitable trust instrument may be difficult, possibly requiring court approval or notice to the attorney general. On the other hand, a corporation can provide more flexibility and is usually adaptable to most foundation purposes. In addition, forming a nonprofit corporation often provides greater protection from personal liability for the directors. The corporate approach is more formal, requiring articles of incorporation, bylaws, regular meetings, minutes, state filings, and other reporting requirements. Corporate bylaws can be drafted to facilitate amendments for any necessary changes.
Recommended publication: Starting a Foundation: Formation and Considerations
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Prospective donors often wonder if they have enough money to start a private foundation. While the amount of assets available to endow the foundation is important, it is by no means the sole, or even the most important, factor in your decision. For this reason, the Council does not recommend a monetary threshold for forming a private foundation.
Determining whether a private foundation is right for you involves a host of additional questions, such as:
The decision is one you'll want to make only after doing some research and getting some sound advice from a trusted philanthropic advisor.
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You will know the assets you can afford to put into a private foundation when starting it, but what will the annual administrative expenses be? That will depend on how you choose to administer your private foundation. There are many options for managing private foundations. Some of them include management by:
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The Council on Foundations has developed three basic examples to help you decide whether you can afford paid staff. The scenarios below roughly demonstrate the relationship between asset amounts, grant distribution, and staffing expenses.
Depending upon the assets you have available, you may want to think about alternatives that can help you maximize your charitable dollars and choices for giving (see the "Additional Options" section below).
Example 1: $1 Million Foundation (No Staff)
Because of the small amount of money that should be devoted to administrative expenses (usually no more than 15 percent of your annual charitable budget), the option of hiring part-time staff is not financially prudent with a foundation of this size.
Total Annual Charitable Budget
$1,000,000 x .055 = $55,000 Assets x 5.5 percent = total annual charitable budget (grants + expenses)
Administrative Costs $55,000 x .15 = $8,250 Total annual charitable budget x 15 percent = administrative budget Without paid staff, your administrative costs will reflect only your legal and accounting fees (estimated at $5,000), which in this case is 9 percent of your annual charitable budget.
Volunteer Responsibilities
Because in this scenario the foundation cannot realistically afford staff, it will be the responsibility of the donor and volunteer board to review all grant requests; go on site visits as necessary; and handle all grantee correspondence, grantmaking investigations, and governance responsibilities of the foundation. If your grantmaking is focused and the grants are few in number, these responsibilities will be easier for you. These responsibilities can be extremely fulfilling when willingly undertaken. In preliminary responses to the Council's 2002 Foundation Management Survey, 93 percent of family foundation respondents reported that they feel inspired by their philanthropy.
Example 2: $5 Million Foundation (Half-time CEO)
Council on Foundations research shows that the majority of private foundations with assets of $5 million to $9.9 million have part-time staff only. The following calculations assume that your half-time CEO salary and benefits are $38,7501 and your annual legal and accounting fees are $5,000:
Total Annual Charitable Budget
$5,000,000 x .055 = $275,000 Assets x 5.5 percent = total annual charitable budget (grants + expenses)
Administrative Costs
$275,000 x .15 = $41,250 Total annual charitable budget x 15 percent = administrative budget
In this case, because your total charitable budget is significantly larger than the previous example, you might consider the option of a half-time staff person. With your half-time CEO salary and benefits at $38,750 and your legal and accounting costs at approximately $5,000, administrative costs total $43,750, which exceeds the recommended 15 percent administrative ceiling. Therefore, you might consider hiring a lower-compensated staff person such as a program officer or administrative assistant, with the board retaining many responsibilities, or hiring a CEO with legal or accounting skills so that the $5,000 fee is reduced.
Example 3: $10 Million Foundation (Half-Time CEO and Half-Time Administrative Assistant)
In this case, your annual charitable budget is an amount that realistically allows you to consider the option of hiring a half-time CEO and a half-time administrative assistant. Assuming that your half-time CEO and half-time administrative assistant salary/benefits are $68,7502 and your annual legal and accounting fees are $5,000:
Total Annual Charitable Budget
$10,000,000 x .055 = $550,000 Assets x 5.5 percent = total annual charitable budget (grants + expenses)
Administrative Costs
$550,000 x .15 = $82,500 Total annual charitable budget x 15 percent = administrative budget
Adding personnel and legal and accounting costs gives you a total of $73,750 for administrative costs. In this example, your administrative costs will be 13.4 percent of your annual charitable budget, which is below the 15 percent recommended ceiling.
As noted above, there are many options available to manage a private foundation. Our research indicates that many families opt for more than one philanthropic tool, each fulfilling a different goal. For example, in preliminary data from the 2002 Foundation Management Survey, 11 percent of the family foundations responding also had donor-advised funds at community foundations.
The costs related to starting a foundation on the state level will vary from one state to the next and depend on the type of structure (e.g., trust or corporation, public charity, or private foundation) chosen for the foundation. State fees are paid with submission of required documents to the state office that is responsible for regulating charities; usually, this is the secretary of state or the attorney general’s office. In addition, there are fees associated with seeking recognition of charity status with the IRS. Finally, there may be licensing or other fees required for operation of any business in a particular area.
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Donor-Advised Funds
Donor-advised funds make philanthropy administratively simpler if one of your goals is to lessen your day-to-day obligations. In a donor-advised fund, donors make an irrevocable contribution to a fund, claim a charitable deduction on their income tax returns, and then recommend how the money in the fund should be distributed to charity. Public charities (e.g., community foundations) take the responsibility of managing such funds. Most accept gifts of cash, publicly traded stock, real estate, and other assets like closely held stock and life insurance. The donated funds are invested in the financial market, so they can keep growing. You can take the tax deduction—typically up to 50 percent of your adjusted gross income for cash gifts and 30 percent for appreciated properties such as stock—for the tax year in which the donation was made.
One advantage of creating a fund through a community foundation is that community foundation staff know and live in the community they serve and can work closely with you to fulfill your charitable goals. To find a community foundation in your area, visit the Council's Community Foundation locator.
Supporting Organizations
A supporting organization (SO) is a tax-exempt entity that supports a public charity. SOs must meet one of three complex legal tests that assure, at a minimum, that the charity being supported has some influence over the actions of the SO. The use of this form is common in connection with community foundations. While SOs are distinguishable from donor-advised funds because they are distinct legal entities, they share many of the same favorable deduction limitations.
Planned Gifts
Individual donors may explore various planned giving options, such as bequests, charitable remainder trusts, charitable lead trusts, pooled income funds, and charitable gift annuities. These usually involve a split income arrangement where the donor receives an income stream during his or her lifetime and the charity receives an outright gift after a term of years or upon the donor's death. You can make these planned gifts through community foundations and other charities.
Writing Checks
You also may decide to simply continue making direct donations. If you are contemplating increasing the size of your gifts, development (fundraising) professionals at your favorite nonprofits will be happy to work with you to honor any specific wishes you may have.
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Foundations are regulated by both federal and state entities. On the federal level, the IRS regulates the operations of both private foundations and public charities. In most states, the attorney general is empowered to supervise and regulate charities and foundations. The Council on Foundations does not regulate foundations. The Council is a membership organization that supports grantmakers in various aspects of foundation management.
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In order to be recognized by the IRS as a public charity, an organization must first be formed under state law, usually in the state where the organization is planning to do business. Once the organization is established under state law, it may seek to become a public charity by filing an IRS Form 1023 application. The IRS then will issue the applicant a determination letter that will state whether the IRS officially recognizes the organization as exempt under Section 501(c)(3) of the Internal Revenue Code. If a favorable determination has been made, the letter will indicate if the organization is considered a private foundation under 509(a), or a public charity under Section 509(a)(1), Section 509(a)(2), or Section 509(a)(3) of the Internal Revenue Code. For complete information on IRS requirements, visit the IRS’s website at www.irs.gov, and review IRS Publication 526.
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