Construction Defects

Basic Information on Dealing with Construction Defects and Maintenance in HOAs
May 1, 2010 | By: VF Law Lawyers

VF Law LLP is dedicated to effectively litigating construction defect disputes on behalf of homeowner and condominium associations, and owners of multi-family and commercial projects. Our litigation team has successfully prosecuted more than 100 million in construction defect claims. We are not a developer’s law firm, and have a singular focus on restoring the equity of owners and the associations that care for their properties. We are uniquely qualified to guide associations through the business of handling defect claims and to manage the owner association relationship.

 

VF Law will help you identify and react to defective construction

Building Inspections

  1. Reserve Studies and Maintenance Plans – evaluate the actual condition of the structural and mechanical components of the building, not just the manufacturer’s specification for useful life.
  2. Early repairs, reports of leaks or higher than anticipated maintenance costs could each indicate defective construction
  3. Evaluate the continuity of your building envelope using a qualified inspector, especially at turnover from the developer

Your Responsibilities

  1. Board members of an association have a fiduciary duty to identify and correct defective construction
  2. Managers and owners should understand the impact on the owner’s long term equity if the buildings are not repaired
  3. Analyze how to fund the corrections via special assessments, increased demand for operating funds, or by recovery from faulty builders

Initiating a claim

  1. There are some very short statutes of limitation, always consult with us for a statute of limitations analysis as soon as a building problem is identified.
  2. The law provides builders a right to inspect and offer specific repairs under strict timelines. Initiate the process, don’t accept open ended or vague promises.
  3. Insurance Analysis. There may be policies that you didn’t buy and may not know about that cover your loss. We can help identify those and make demands on them.
  4. Educate owners and engage their participation in identifying the scope of the problem, potential solutions, the prospects for recovery and the effects of litigation. Be candid about both the positive and negatives.

Basic Steps of a Construction Defect Case

  1. Preliminary Destructive Testing of portions of the building
  2. Notify the builder of the defects identified in the testing, by both issuing a statutory Notice of Defect and making a warranty claim.
  3. Early resolution. 20% (approx.) of cases are resolved without protracted litigation through dialogue and negotiation.
  4. 80% (approx) do result in litigation, which may also include:
    1. File a lawsuit to recover money damages
    2. Meet with experts from both sides for further testing, analysis and development of a scope of repair
    3. Mediation/Hard nosed negotiation
    4. Trial

We know the difficulty and concerns that arise with defect cases. Here are some common construction defect questions we are asked:

  1. How do we pay attorney fees?
  2. We will work with you to find the best payment option possible whether contingent or hourly.
  3. How long do we have to pursue a claim?
  4. There are very specific timeframes after which your legal rights to recover money expire. Some rights may expire in as short as a year or less, while others may still be available for up to ten years. This is not an area for even experienced managers or directors to make educated guesses. Get a professional opinion.
  5. What if declarant or general contractor is bankrupt or out of business? Is it still worth it to pursue a construction defect claim?
  6. Yes, there is almost never a single company responsible for every aspect of construction so you may still have valid claims against other non-bankrupt parties, for example a subcontractor. Also, a bankruptcy does not cancel the contractors insurance policy so there still may be a source of funds available for the damage caused by a bankrupt contractor.

What we offer:

  1. Hiring the VF Law construction defect team offers many benefits, including:
    1. We will meet with you, your board, your managers and your owners to explain the process and answer questions – at no charge.
    2. Throughout the process we will be available to attend meetings and keep your owners informed and up to date. We can offer guidance to help you select an expert architect or engineer that fits your needs, and then will coordinate directly with that expert.
  • We will not disappear when your case is over. We will assist in the process of contracting for repair and reconstruction and will be there to support the association through its challenges coordinating with owners to make sure construction isn’t delayed.
  1. We serve as general counsel to condominium and homeowners associations throughout the Northwest and Intermountain West regions. We understand the perimeters of a board’s authority, the formalities required by the governing documents, and the sometimes difficult owner relationships a board has to navigate.
  1. VF Law is one of the leading advocates in working to pass legislation that protects the rights of the homeowner associations in construction defect cases.

 

With almost 20 years of construction defect experience, we have recovered tens of millions of dollars on behalf of thousands of property owners. The firm has successfully resolved claims relating to dry rot, mold, water intrusion, negligent construction, and negotiation with insurance carriers. We have had successful case outcomes in high-rise buildings, new construction (condominiums, townhomes, etc), apartment complexes, conversion projects, and single family homes.

  1. Consumer Reports show at least 15% of new construction has serious problems. Defective construction can lead to millions of dollars in expensive repairs, and you have a duty to watch out for it. Defects have to be recognized promptly, before hidden damage gets worse. If you wait too long, insurance and legal claims may not be available to your homeowners or condo association. Don’t let hidden defects in your common area roofs and walls go unnoticed. We are dedicated to solely representing the homeowner, community association, and commercial property owner to provide the best legal guidance and litigation results possible. Let us help you look for defect warning signs and ensure that your construction defect claims are properly investigated and successfully prosecuted. We look forward to hearing from you.

VF Law is your full-service homeowners association law center and litigation team, providing education, representation, and litigation on behalf of associations.