Today’s topic is Why Can’t We Build The Perfect House & Asset Protection.

My guest today is Jean Gibson, Vive President of Gibson Home Builders, Inc. and a segment by Kelly M. Davis
We suspect that Mother Nature and Mother Earth get a good laugh at our futile efforts to build the perfect house. While there are probably endless reasons why building the perfect house is a futile goal, we believe these four to be the most fundamental.

1. We build our homes on the ground! Mother Earth (the ground) is unpredictable.

2. We build most of our homes with wood. Wood is organic. Mother Nature did not design wood to be a predictable, reliable building material. It is dimensionally unstable, changing shape as it ages and as temperature and humidity change.

3. We use human beings to build our homes! Human beings are not perfect.

4. We build our homes outside! The same Mother Nature that gives us imperfect wood with which to build our homes then throws unpredictable weather at us while we build.

Unlike most of the products we buy, homes are not built in a controlled manufacturing environment.

During the construction process, the weather is unpredictable from day to day (sometimes even hour to hour!), materials must be stored in less-than-ideal conditions and workers are subject to temperature extremes. Considering the effect weather can have during the four to six months it takes to build an average home, it could be argued that it is rather extraordinary that we do as well as we do with most of our home construction. It may not be perfect, but it’s pretty good, overall.

In our experience, in today’s world, perfect means, among other things, without visual flaws. In an average home, that means: no cracks, no blemishes in flat, painted surfaces, no separations in the joints between separate pieces of wood trim, doors that open and close smoothly from season to season, etc. For each homeowner, the definition of a perfect house is likely to be different.

The weather creates an unpredictable environment for building a home; it can affect things in many ways. The National Association of Home Builders estimates that Americans spend between $65 billion and $75 billion annually on maintenance, repair and replacement, often due to the premature failure of a material exposed to outdoor weathering. Here are just a few:

Low Temperatures Can Cause

Frozen Ground---Foundations built on or in frozen ground may move after the ground thaws. As the ground thaws, it typically consolidates (settles) and the building moves. Interior finishes and other things crack, doors do not open and shut properly, windows are tight, and other functional problems develop.

Premature Deterioration of Concrete and Masonry--- In cold temperatures (~40 degrees F), concrete and mortar do not cure properly as going from a wet mix to a solid mass is a chemical process. Proper protection (insulated blankets and heated enclosures) and additives are needed to assure quality concrete in cold temperatures. Without proper protection, the long-term performance of the concrete will be compromised. Spalling (the top layer crumbling), cracking and other premature deterioration are likely.

Brittle Materials--Many roofing materials cannot be installed in cold temperatures. They become brittle and crack. Self-sealing shingles will not seal. Materials laid under the shingles tears more easily. There are often no alternatives for cold weather roofing except providing sheltered, heated work areas to keep the materials warm.

Many Materials are Dimensionally Sensitive to Temperature; they get smaller when it is colder. If these materials are installed without allowing for future growth when it gets warmer, visually disturbing distortions will occur. In addition, some materials (flashing, etc.) may actually fail as temperatures climb after cold weather installation.

Frozen water may actually be captured in some materials. This will affect their performance as temperatures rise and the water thaws.

High Temperatures Can Cause

Concrete is sensitive to extreme temperatures, both high and low. The ideal temperature range for curing concrete is between 55 degrees F and 90 degrees F. Above this, rapid evaporation of moisture can cause shrinkage cracking before and during hardening. Typically, when the temperatures start to exceed 90 degrees F, it is important to protect concrete as it cures. Moistening the aggregate with cool water and cooling the water used will help maintain the temperature at the proper level. Otherwise, it is likely that premature deterioration will occur.

Virtually every construction material will expand and contract with changes in temperature. Dimensionally sensitive materials (wood, glass, concrete, most metals) improperly installed in hot weather will also result in visual distortions and aesthetic compromises. Most manufacturers have standards and guidelines for high-temperature installation of their products or temperature limits within which the product must be installed.

Rain/High Humidity/Moisture Can Cause

Shrinkage--- Expansion and contraction of wood are perfectly normal during changes in the weather. When the air is exceptionally warm and humid, solid hardwoods will absorb moisture and expand. Likewise, with much cooler, drier air, the wood will give off moisture and contract. Increased moisture content in wood and other porous material means more moisture released as that material dries after construction. That means shrinkage. Cracks and distortion are likely to develop in the first 1–2 years of the life of that home. When laying a hardwood floor, a gap should be left at the wall for expansion. Wider plank flooring should have the back sealed before installation. Hardwood paneling should be installed with an expansion gap to allow for natural expansion and contraction.

Rot and Mold--- As damp (or wet!) materials dry, moisture is released inside the home (or captured in wall cavities, between layers of sheathing, under floors, etc) which, if not adequately vented, can lead to rot and/or mold.

Material Deterioration--- Some materials (for example, certain types of plywood) are not moisture resistant; if they are exposed to moisture, they will be damaged. If those components are then installed in the home, problems will develop. The type and seriousness of the problem will depend on the material and the amount of moisture. Wood flooring should not be installed over damp concrete or wet plywood.

Protecting materials and components from moisture during construction is one of the most important considerations. A home should be completely closed in (including all window and door installation) before hardwood or flooring is delivered. Unprotected wood products should never be stored, trucked or unloaded in the rain or other wet conditions.

Sunlight Can Cause

And you thought sunlight was good! Many materials are sensitive to prolonged exposure to ultraviolet light.

Some house wraps, for example, should not be exposed to UV light for extended periods, typically not more than three to six months. If they are, the intended performance of the material will be compromised. If the permeability of a house wrap deteriorates, it is more likely that moisture will be captured behind the sheathing or siding.

The manufacturer’s literature for most building materials will provide information about limitations on exposure to UV light.

Wind Can Cause

Structural Failures---Improperly braced framing exposed to high winds during construction may move or fail entirely.

Torn House Wrap or Underlayment--- If wind-damaged material is not properly replaced, its performance will not be as expected. Water intrusion is among the likely consequences of not replacing wind-damaged material properly. This is especially important around windows and doors, where the proper replacement of the damaged material may actually require taking the window or door out and reinstalling it.

Weather plays a big role in successfully building a good quality home. The consequences of unexpected or unplanned for weather events during construction must be considered before continuing the construction process. Otherwise, a wide variety of problems can occur.

Even in the best of conditions, like it or not, weather is part of the construction team. Moreover, weather is unpredictable. Thus, weather is one more reason why we cannot build a perfect house.

We have explored the variables that influence the goal of building a perfect house. Four conditions, which we have limited or no control over, can greatly influence the outcome: the ground underneath, the wood we use, human beings, and the weather are all unpredictable.

The best defense against surprises caused by these conditions is knowledge. Before, during and after a home has been constructed, regular inspections will help identify potential or new problems. A licensed Professional Engineer with experience in building evaluations is your best choice for an inspection.


Asset Protection
Good morning. I want to thank Gibson Home Builders and Jim and Jean Gibson for having me on the show today.
My name is Kelly Davis. I own a local law firm, Kelly M. Davis & Associates. My firm represents many local businesses. Small business owners are so caught up in running the day to day operations of their company that they often lose sight of something very important. Asset protection! It does one no good to go out there and make that money if they have nothing to show for it after making 1 large mistake in business.
So, today, I’m going try and clarify some of the confusions of corporate entity structures and also go over some practical ways business owners can protect their assets.
1. What’s the affect of not having an entity? There is no shield from you personally and your business. Therefore any claim against your business is effectively against you.
2. Most common entities with asset protection?
a. limited partnership
b. limited liability company (LLC)
c. corporation (for-profit)
d. nonprofit corporation (not-for-profit)
3. What’s the difference?
a. Limited partnerships are costly and complicated to set up and run, and are not recommended for the average small business owner. Limited partnerships are usually created by one person or company (the "general partner"), who will solicit investments from others (the "limited partners").
b. Corporations - What sets the corporation apart from all other types of businesses is that a corporation is an independent legal and tax entity, separate from the people who own, control and manage it. Because of this separate status, the owners of a corporation don't use their personal tax returns to pay tax on corporate profits -- the corporation itself pays these taxes. Owners pay personal income tax only on money they draw from the corporation in the form of salaries, bonuses, and the like.
c. LLC’s - LLCs provide limited personal liability for business debts and claims. But when it comes to taxes, LLCs are more like partnerships: the owners of an LLC pay taxes on their shares of the business income on their personal tax returns.
4. Which one is right for me? Which of these structures is right for your business depends on the type of business you run, how many owners it has, and its financial situation. No one choice suits every business: Business owners have to pick the structure that best meets their needs. Corporations and LLCs make sense for business owners who either 1) run a risk of being sued by customers or of piling up a lot of business debts, or 2) have substantial personal assets they want to protect from business creditors.
5. Who should have it? Any business with potential liability
a. Builders
b. Subcontractors
c. Vendors
d. Other people
6. Other tips for protecting assets –
a. Have a will or estate plan
b. Have yearly meetings and follow corporate formalities
c. Be careful what capacity you are signing your contracts
d. Have written contracts (not just oral)
e. Make sure you are insured
f. Document all disputes
g. Do not comingle companies
h. Develop relationships from people you trust

Thanks for tuning in to me today and I look forward to talking to you next time.
If you need to contact me, call 972-434-8009 otherwise visit us on the web at www.kmdalegal.com.
See you soon!