I am often surprised by how quickly and efficiently condominium buildings are constructed. Notably, even new buildings that incorporate state-of-the-art materials and cutting-edge installation techniques can have construction defects. While issues are common, the majority of construction defects are minor and inconsequential. A minority of defects are significant, although some can lead to damage to people or the condominium property itself. Substandard construction practices employed to construct condominium buildings and townhouses communities quickly and inexpensively may contribute to a rise in construction and development defects claims. Also, when workers lack proper training or are not properly supervised, the quality of construction can suffer, and a lack of adherence to building code requirements, manufacturer’s specifications, or design details can lead to significant construction defects.

There is no substitute for years of legal experience in resolving construction defect disputes on behalf of condominiums, including negotiating repair agreements, drafting settlement terms, and litigating construction defect claims on behalf of associations in situations where a settlement is not possible.

The process for condominium associations to recover damages from a construction defect is far more complex than merely sending a demand or filing a lawsuit; it requires identifying and documenting defects to establish the claim for damages. Associations must determine whether the cost and time to identify defects and pursue claims outweigh the repair costs. This article is intended to provide a general overview of construction defects and their cause, to assist associations in identifying defects, and to determine how to address them. It is important to accept that construction defects can occur anywhere, be it a brand-new building, large-scale building renovation, or even in a small project. Potential purchasers may often view new construction or freshly renovated condominium buildings with an expectation that the general common elements and facilities will be free from construction defects. This expectation may arise from several common misconceptions:

1. First, it is easy to equate “new” construction with “high-quality” construction, because everything looks clean and fresh. However, that is not always the case. Although wear and tear may not have occurred, that does not mean everything is perfect beneath the surfaces and finishes.

2. Second, many believe that because a structure was subjected to municipal inspections during construction, it is more likely to be free of construction defects, at least for a reasonable time. While that may seem true, pristine finishes and recent inspections may lull association board members, unit owners, and property managers into a false sense of security that a newly constructed or renovated condominium is defect-free. There are, in fact, numerous reasons why inspections may not uncover construction defects, ranging from inspectors lacking proper training and expertise, failing to inspect all of the work, or in rare instances, even approving work that was never inspected.

3. Finally, even if an inspection was properly performed, and the common elements meet code requirements, this does not guarantee that the common elements of the condominium as constructed meet contract requirements, engineering specifications or a manufacturer’s specifications. A building inspector’s job is merely to ensure that code requirements are met, and unfortunately, it is possible for defective construction methods to meet this low threshold.

According to the International Risk Management Institute (IRMI), the general definition of a construction defect is “a deficiency in the design or construction of a building or structure resulting from a failure to design or construct in a reasonably workmanlike manner, or in keeping with a buyer’s reasonable expectation.” Construction defects can be classified into four primary categories:

1. Defective Building Materials that are not durable or do not function as intended;

2. Faulty Workmanship arising from errors during construction or installation;

3. Improper Design stemming from errors or omissions in the architectural or engineering plans of a project; and

Construction defects often occur when:

1. There is a failure to construct a building in a reasonably workmanlike manner; or

2. The structure or building systems fail to perform in the intended manner.

Construction defects also come in two primary forms:

1. Patent Defects are readily apparent upon examination soon after construction has been completed, and may typically be discovered by an association, individual unit owners, and/or the management company through casual observation and inspection on a day-to-day basis.

2. Latent Defects are not readily apparent, and often concealed, sometimes not becoming apparent for several years after construction is completed. Discovery of issues often occurs long after a condominium transitions away from developer control.

Construction defects can compromise the safety, functionality, or integrity of a property and can manifest in many ways. Primary defects include but are not limited to:

1. Defects in Finishes arising from poor quality workmanship or accidental damage caused during the work;

2. Habitability Defects, which are serious issues that alter the habitability of the dwelling, for example a lack of soundproofing, insulation, or proper plumbing; and

3. Structural Defects, which can be the most serious since they affect the stability of the building and the safety of its inhabitants.

Very often, the identification of a defect merely scratches the surface. Is the identified defect a symptom, or does it also indicate the cause? The underlying cause of a construction defect is often different from the visible evidence of the defect, even though both must be corrected. The visible evidence may be an apparent condition of the structure, its components, or the defective materials caused by the defect, often indicating an even more severe problem. For instance, although a crack running through a concrete veneer stone may be a defect, it may merely be an outward sign of the actual defect, such as inadequate structural support, substandard materials, incorrect subsurface preparation, or improper expansion joints.

It is important to identify and categorize both the signs of the defect and the defect itself, as addressing only the visible symptoms will not correct the underlying problem. Prevention is always better than solutions, but a condominium cannot count on a contractor or developer to identify and rectify all defects at the time of construction or before the transition from declarant control. Accordingly, an association needs to consider that just because the common elements appear to be new on the interior surfaces and across the exterior elements, that does not mean that construction defects are not present, and merely concealed. Often, latent defects are not discovered until years after transition, the time and process by which the developer of a common interest development passes governance and responsibility to the members of an association. Generally, when the construction of a condominium building has been completed, and all amenities are in order, the property will transition from developer control to control by an association’s board, but the time for transition can vary widely from condominium to condominium and would require review of a condominium’s governing documents to definitively determine. It is often critical that, at the time of transition, an association seek to identify construction defects, which may not be detectable until problems begin to surface, or an engineer performs an extensive physical inspection of the condominium.

Construction defects can also go unnoticed for a long period of time. Delayed discovery of the problem can make construction defect disputes complicated to manage. When left undetected and unrepaired, construction defects can cause extensive damage, which can require associations to assess substantial repair costs, which may have been avoidable through the submission of timely warranty claims. Construction defects can result in serious property damage, difficulties and financial complications.

A transition study that includes a property condition assessment can serve as an independent, expert analysis that an association can use to make sound business decisions in terms of properly addressing construction defects by taking the guesswork out of identifying repairs, the cause for repairs, and the costs. Due to the potential of latent defects, a transition study can serve as a valuable tool regardless of whether significant defects or deficiencies are suspected, or not. In the case of deficiencies, a transition study can serve as the basis to compel the responsible party to remedy those deficiencies that, if not timely detected, would become the responsibility of the community association assuming ownership.

Another important step that a transitioning association can take toward successfully identifying and amicably resolving construction defect claims is to seek an early, consultation from legal counsel with substantial experience negotiating and litigating condominium construction defect disputes. There is no substitute for years of legal experience in resolving construction defect disputes on behalf of condominiums, including negotiating repair agreements, drafting settlement terms, and litigating construction defect claims on behalf of associations in situations where a settlement is not possible.

Attorneys at Moriarty Bielan & Malloy are experienced in representing condominium associations in complex construction defect claims. Should you have any need for legal services related to this article, or any similar matter, you can email Chris Greeley at greeley@mbmllc.comc or contact any of our other attorneys at 781-817-4900 or info@mbmllc.com.