Legal Blog

Construction Defects Can Be Financially Devastating

Note: This column is by colleague Gregory L. Shelton, who practices construction law at Horack, Talley, Pharr & Lowndes, P.A. This is part one in a two-part series about condominium construction defects. This first part describes common defects and their consequences. In part two, we’ll explain how legal time limits can prevent the association or its owners from suing the parties responsible for defective construction.

Homeowners associations (HOAs) and condominium owners’ associations (COAs) are usually responsible for the maintenance and repair of common elements.

In the HOA context, common elements may include a clubhouse, pool, or other amenities. In the COA context, however, common elements usually include the roofs, exterior walls, and other building-envelope components intended to shelter unit owners from the weather.

If the building envelope has not been designed or constructed properly, water can find its way into the building and attack the structure itself. The resulting rot and mold, hidden between the exterior and interior walls, may go undetected for years.

Modern condominium buildings are particularly susceptible to water intrusion. Condominiums have become more complicated to satisfy the aesthetic demands of the market. More corners, terminations, railings and roof lines mean more entry points for water. If the workers installing the sheathing, siding, building wrap, windows, flashing and masonry are not properly trained or fail to follow the manufacturer’s instructions to the letter, water may become trapped inside the building envelope with nowhere to go.

The persistent intrusion of water can result in millions of dollars in repair costs. Common repairs include mold removal, replacement of rotting structural components such as studs and sheathing, and replacement of windows.

While high-rise condominium buildings and condominium complexes may resemble apartments in certain respects, current or prospective condominium owners must understand that, as owners and members of the COA, they will ultimately be responsible for the costs to repair defects.

Property insurance may provide relief in some instances, but property insurers usually write policies to limit compensation for mold and exclude coverage for defective design or construction.

If you are considering purchasing a condo unit, you should learn as much as possible about the history of construction and the current state of the buildings.

If you hire a private building inspector, the inspector should be truly independent. His client should be you and not “the sale.”

If the COA objects to a close inspection of the building envelope, remind them it’s better to know about water intrusion now, because the law limits the time a COA or unit owner can sue the parties responsible for the problem. The time limits will be the subject of my next guest column.

Originally published in the Charlotte Observer on May 3, 2014.

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