CAMS: What You Need to Know About Construction Defects and Your Associations

As a Community Association Manager, you occupy a multi-faceted role that requires you to have knowledge of many areas that concern your community. One critical area under your purview is the condition and safety of your buildings.

In Florida, the subject of building health and safety has become increasingly important as many of our buildings age, many are being built hastily, and all are subject to the impact of our state’s heavy rainfall.

Now more than ever, CAMs need to understand construction defects, identify them in their Associations, and make them right.

What Are Construction Defects?

Construction defects are “building deficiencies”–failures in a building’s structure or materials that compromise the building’s integrity and the safety of its residents. Defects can range from minor aesthetic issues to major structural flaws that pose significant safety risks.

Construction defects typically stem from poor workmanship, substandard materials, or failure to comply with building codes. Usually, there is not just one kind of defect. Instead, several kinds of defects may be present in windows, stucco, waterproofing, roofs, electrical systems, and plumbing.

In the state of Florida, a construction defect is defined as a material deficiency in the construction of a residential or commercial building that is caused by a failure to design, construct, or prepare the land in a manner that is acceptable by the building standards at the time of construction.

What Causes Defects?

The Florida building boom has created an environment of hasty new construction. General contractors often hire subcontractors to do volume work at low prices, so to make more profit, some subs cut corners in the quality of materials they use, in the thoroughness of their work, and in code compliance.

Sometimes job-site supervision and quality control get skimped, so the deficiencies are not seen or remedied. But years later, the defects take their toll as building systems deteriorate, leak, crumble, and rot.

Examples of Common Construction Defects

De-bonded stucco
Rusted rebar
Elevated pool leaks
Rusted post-tension cables
Failed balcony waterproofing
Rotten framing
Leaking roofs
Sinking pavers
Leaking window flashing

The Problems with Construction Defects

The problems with construction defects include the following:

They are often systemic—they occur throughout all buildings in the Association.
They are often hidden and hard to identify.
They can be expensive to repair because they can be widespread.
Few builders/developers agree to repair their work.
Litigation can be necessary to obtain a settlement or judgment for repairs.
The construction defect litigation process is exacting and can take a long time.
Construction defects can lead to millions of dollars in repair costs.

CAMS: Why You Must Act in a Timely Manner

You cannot sit on your hands when it comes to construction defects in your community. Why? Because the Florida legislature has enacted what’s called the “Statute of Ultimate Repose,” or simply, the “Statute of Repose.”

This statute says you must file construction defect claims within a certain period, or you will be “time-barred”—your case will be thrown out, you will get no settlement, and your community will have to pay for repairs out of pocket.

The 7-Year Statute of Repose

You only have seven years from the earlier of (i) the date of issuance of a temporary certificate of occupancy (TCO), a CO, or a certificate of completion (CC); or (ii) the date of abandonment if construction is not completed.

You will require the assistance of counsel to evaluate each building in your Association, as each may have a different starting date.

The concern regarding the statute of repose is that construction defects are typically hidden behind stucco, siding, or shingles and are difficult, if not impossible, to detect without the assistance of professionals.

Often, construction defects such as leaky windows and roofing systems will go undiagnosed because they will deteriorate and destroy the internal structural systems of a building before being visible on the exterior. And by then, not only have years ticked by on the statute of repose deadlines, but the need for very expensive repairs may have accumulated.

The 4-Year Statute of Limitations

If you are aware of defects, or if you should be aware of defects, you’ll have a second type of deadline that may time bar (disallow) your Association’s claim.

This time bar is known as the statute of limitations which provides that Associations must file a lawsuit for defects within four years of the date it knew, or should have known, of the defects.

For example, if you’ve been paying a contractor to fix leaky roofs and you try to file a claim after four years of noticing the leaks, the defense attorneys will argue the Association is barred from making the claim because it knew or should have known about the defects when the CAM first saw the leaks.

How Should the CAM Address Construction Defects?

Paul Overton, an expert in construction defects and president of Overton Construction and Consulting, recommends that CAMs take these steps when dealing with potential or identified construction defects:

Be very aware of the statute of repose and the statute of limitations (see above)
Know the signs of building deficiencies and watch for them. Is there water intrusion through roofs and windows? Stucco cracks or discoloration? Concrete spalling (chunks chipping off)? Those can all be signs.
If you suspect deficiencies, contact a construction company that specializes in construction defect repairs. Request an inspection and preliminary observation report. Note: the average construction company doesn’t offer services relating to defects.
Take the report to your HOA board or condo Association.
Contact a qualified construction defect attorney to determine your Association’s statute of repose and statute of limitations timeframes and share what is known about potential construction defects and deficiencies.

What Happens Next?

The next pieces of the process involve multiple parties, including attorneys, HOA boards, management, engineers, architects, consultants, and construction companies specializing in construction defects.

Destructive testing is the name of the process in which sections of a building are opened to see what damage exists. Destructive testing reveals if there is enough damage to proceed with a potential claim.

If there is, your attorney contacts the builder or developer with the destructive testing results, and they have 120 days in most cases to respond with their intentions and plans for making repairs and bringing the building(s) back to a safe and whole condition.

Jason Bruce of Pursiano Law describes this as the détente period required by the Florida legislature. The purpose of the détente is to give the builder enough time for the issues to be corrected outside of the courtroom.

If the builder or developer chooses not to repair the damage caused by their deficient construction, then litigation is the next step, and your HOA or condo Association’s attorney will file a claim accordingly.

Construction Litigation

Construction defect litigation is a complex process helmed by the construction defect attorney in cooperation with experts who supply information, reports, and documentation to support and validate the claim. The outcome sought is a settlement large enough to make all the necessary repairs and make an HOA or condo’s buildings whole, strong, and safe again.

Post-Litigation Repairs

Typically, post-litigation construction defect repairs include:

Balcony and deck rebuilding, re-coating, and waterproofing
Replacement of wood damaged by water intrusion, pest infestation, and fungal decay
Concrete restoration: surface repairs, waterproofing, structural repairs, and corrosion mitigation
Stucco and siding system replacement
Window repairs
Roofing system repairs or replacement
Exterior painting and coating applications

The CAM’s Role

Throughout litigation proceedings and post-litigation repairs, the CAM serves as an interface between parties and the communicator who keeps all parties and residents informed.

Important Takeaways for the CAM

Set Your Internal Alarm

Attorney Jason Bruce encourages CAMs to “set an internal alarm” regarding the four-year and seven-year deadlines discussed above. If residents complain about window leaks, cracking stucco, roofing issues, etc., regard the complaints as information about potential construction defects and promptly act on the information.

Unresponsive Boards and Paper Trails

Attorney Bruce also recommends that CAMs working with unresponsive boards–that is, boards who continually downplay or ignore your emails about potential building deficiencies—should continue to send email reports for your own paper trail protection. If deadlines are missed, you do not want to take the blame for the Association missing its deadline to file a construction defect claim.

Mid-Case Repairs: Be Cautious!

Paul Overton cautions CAMs about repairing active issues during a construction defect case. Proceeding with repairs during a case without involving your attorney can jeopardize the case. You need to keep the damage from getting worse but only do so with legal guidance.

Maintain Your Buildings

Finally, do not neglect regular building maintenance. Keep your Association buildings in good condition so that a defense attorney cannot muddy the claim waters by saying the defects are a result of deferred maintenance.

For construction defect experts, including contractors and attorneys, please see our preferred business partners in your area.

Our thanks to Paul Overton of Overton Construction and Jason Bruce and Billy Brown of Pursiano Law for their contributions to this blog.

*CAM University does not claim to be an expert in the subject matter, and our articles should never substitute for legal advice from your Association counsel or the appropriate experts in their respective fields.