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A billion-dollar price tag for construction defects in Connecticut

In what amounts to a real estate nightmare, thousands of Connecticut homeowners are faced with crumbling foundations, and the insurance company responsible for footing the repair bills claims there isn't enough money to go around. It's a worst-case-scenario that illustrates just how bad construction defects can get.

The Connecticut case involves up to 9,000 homes with cracking and crumbling foundations due to defective cement. The cement apparently contains pyrrhotite, an iron sulfide that reacts with oxygen and water, causing extensive deterioration that becomes catastrophic over time. Some of the houses already cannot be lived in or sold, the AP reports.

Michael Maglaras is head of the Connecticut Foundation Solutions Indemnity Company, created by the state to oversee distribution of $100 million ($20 million a year over five years) in state bonding.

"By any calculation, I don't care who's calculation it is, there's not enough money," Maglaras said. He estimates that the $100 million, plus an estimated $33.5 million generated by a real estate surcharge, will be enough to fix up to 700 homes at an average of $185,000 per house. But he says the problem is far bigger.

"I have at least a $1 billion problem," Maglaras said.

He says from 5,000 to 9,000 houses will need to be fixed. All have pyrrhotite in their deteriorating foundations.

Connecticut is trying to secure funding from the federal government to help ease the financial crunch.

According to the AP, some homes in western Massachusetts might also be affected by the crumbling foundations.

Clearly, property owners have made their voices heard. Funding exists to at least begin the enormous repair job ahead.

If you own property affected by construction defects, contact a law firm experienced in construction law litigation.

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