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Articles Posted in Construction defect

Jeffrey Respler srhl-law.jpgThe firm’s lawsuits alleging major construction defects against the developer, general contractor, architect and engineers behind Miami’s Quantum on the Bay condominium towers were the subject of an article by the Daily Business Review that appeared in the June 16, 2014, edition of the newspaper. The lawsuits allege that the defendants’ work resulted in hundreds of defects, including stucco and HVAC problems as well as inadequate drainage that has led to severe flooding in the community’s fitness center and loading dock.

Firm Partner Jeffrey S. Respler is quoted in the article indicating that “[t]he unit owners want to have the property that should have been delivered to them. At the end of the day, we’re not looking for a windfall. We’re only looking to be made whole.”

The lawsuit names as defendants developer Terra ADI-International Bayshore LLC, builder Facchina-McGaughan LLC, architect Nichols Brosch Wurst Wolfe & Associates Inc., contractor Fred McGilvray Inc., and engineers Florida Engineering Services Inc., VSN Engineering Inc., Gopman Consulting Engineers Inc. and John J. Kirlin LLC, a Maryland-based firm that specializes in plumbing, heating, ventilation and air conditioning.

“The biggest problem is whenever there’s even a minor rain event, there’s flooding,” explains Respler in the report. “Every single day, the association people have to go out and pump the drainage wells in this luxury development. If not, there’s flooding – even when there’s no rain.”

The article describes how sandbags are being used at the property to keep water out of a service area during storms, and residents have been forced to have repairs made to swamped elevators.

Respler concludes: “The parties who we know are responsible are pointing fingers at each other. We are just the end users. We weren’t there when it was being built. The bottom-line fix is we’re probably going to have to move the drains to the front of the property. The speculation is the building was built too low.”

Click here to read the complete article in the DBR’s website (registration required).

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Daniel Salas SRLDS.jpgConcrete restoration projects are unavoidable during the lifespan of every concrete building in South Florida. They are among the most expensive construction renovation projects that associations will be required to take on, and as such many associations and their property managers try to mitigate the costs as much as possible. However, the old adage that an ounce of prevention is worth a pound of cure holds true with these projects. Associations should be very careful to avoid cutting corners on the record keeping, making sure to chronicle all of the work that was performed as part of these restoration projects in order to protect against the repercussions of shoddy work and defects.

My colleagues and I have experienced a number of instances where our association clients have had defects manifest themselves only a few years after a concrete restoration project has been completed. However, the associations have had a difficult time proving that the contractor was responsible due to inadequate and incomplete records of the work that was performed. After inspecting the defects in question, the contractors have responded by indicating that they were not responsible for the work on the affected areas. The associations then request records and work logs to verify the contractors’ claims, only to find that the contractors and engineers did not keep detailed work logs of the work that was performed, leaving the association with little evidence to prove their claims.

balcony renovation.jpgThere are a number of measures that associations should take to avoid this scenario and protect themselves against the potential for inferior and defective work in concrete restoration projects. The foremost among these is the retaining of an independent third-party engineer or project manager to oversee and chronicle the restoration work performed in the building, and to help ensure that all of the work is performed in a cost-effective and timely manner. A third-party project manager not only protects the interest of the association during the construction process but also protects the association’s interests should defects in the restoration work arise in the future. The benefits of hiring a third-party project manager are countless, for example, project managers will assist in the evaluation and hiring of the project engineer and contractor; evaluate the work of the engineer and contractor; hold timely meetings to review the process of the work performed; review the payment requisitions and daily logs; and keep the association informed of any potential issues on the project.

In addition to the use of an independent engineer or project manager, the association’s attorney should also be called upon to review and or draft the contracts for the restoration project. The associations should ensure that their contracts include stipulations requiring that the general contractor and engineer maintain and provide to the association detailed work logs of all of the work performed. The standard warranty language in general construction contracts will not suffice without the detailed work logs showing exactly what work was performed and the location of such work in every facet of the building. It is much more difficult to hold contractors liable for defects in areas that are not documented as having been part of the restoration work performed.

Although these additional measures will add to the costs of concrete restoration projects for associations, without them the associations would be taking a significant risk of being unable to hold contractors responsible for any defects that may arise in the restored areas. Additionally, these added costs are minimal compared to the costs that the associations would endure in litigation or in repairs to the areas which had been restored. There is no doubt that concrete restoration projects are expensive, time consuming and a nuisance to the residents of the building. However, keeping these measures in place throughout the process will mitigate the time and money spent on the project as well as result in a well done concrete restoration project, retaining the value of the building as well as the safety of the residents.

HB 1013, one of the most surprising and anti-consumer pieces of new legislation for Florida homeowners and HOAs, was recently signed into law by Gov. Scott. HB 1013 was passed in direct response to the Fifth District Court of Appeal’s decision in the case of Lakeview Reserve Homeowners Association, Inc. v. Maronda Homes of Florida, Inc. In Maronda, the appellate court extended the common law warranty of fitness and merchantability to off-site improvements such as roads and drainage systems within a community. The new law eliminates an HOA’s cause of action for breach of the common law warranty of fitness and merchantability as it pertains to defective roads, walls, drainage areas, utilities, or any other improvements that are not located on or under the lot on which the home is constructed or which do not “immediately and directly support the habitability of the home itself.”

In Maronda, the HOA sued the developer alleging defective construction of private roads, drainage systems, retention ponds and underground pipes within the subdivision. The appellate court reversed the trial court’s decision and ruled that the implied warranty of habitability extends to developers and contractors that have built communities with defective infrastructure because purchasers of new homes in a subdivision “must rely on the expertise of the builder/developer for proper construction of these complex structures, where they are in an inferior position to inspect the work and to correct the defects in the construction phase and where the defects are not readily discernable to the average homeowner.” Defective drainage.jpg The Fifth DCA specifically held that roads, drainage systems, retention ponds and underground pipes are all essential services that support the habitability of the home for purposes of the application of the implied warranties.

HB 1013 becomes the law on July 1, 2012. However, there is a possibility that the new law will face a constitutional challenge because its application is intended to be retroactive – meaning that it applies to issues and cases already in existence. Because the new law is retroactive, it may be considered to be an impairment of an existing contract – which is unconstitutional in Florida. However, until such a challenge is made, the law will now only allow homeowners to bring claims for damages due to defective construction if they can prove a breach of the building code or negligence in the design of the infrastructure systems. These claims can be difficult to prove, since typically all of the building permits and inspections have been passed by a builder during construction, and infrastructure systems are built in accordance with proven designs.

With the passage of this new law however, it is now more imperative than ever that the turnover process for communities include thorough testing and inspections of the infrastructure and drainage systems by a certified engineer. If the community is experiencing flooding prior to turnover, the association should have its engineer inspect and identify any flaws in the infrastructure that may require additional work or repairs. Many times in the past, when these types of defects have arisen, the parties have been able to settle their issues because reputable developers and contractors generally take responsibility for faulty infrastructure and make the necessary repairs.

A hearing in the Maronda case before the Florida Supreme Court was slated for later this year, however it is yet to be seen how the parties will address the passage of HB 1013 and whether the hearing will go forward.

Other community association attorneys at our firm and I were very surprised by the passage of this new law, as it appears to us to be unfairly allowing developers, contractors and engineers to avoid liability for defects in infrastructure systems that can lead to significant and costly repairs for HOA communities and their homeowners. We will continue to monitor and write about this and other important issues for Florida community associations in this blog, and we encourage board members, unit owners and property managers to submit their email address in the subscription box at the top right of the blog in order to automatically receive all of our future articles.

A recent decision by a Florida appellate court in the case of Lakeview Reserve Homeowners v. Maronda Homes, Inc. 35 Fla. L. Weekly D2413 (Fla. 5th DCA 2010) has far-reaching implications for homeowners associations in construction defect disputes with developers. The Fifth District Court of Appeal court has broadened the implied warranty of fitness and merchantability granted to purchasers of new homes to include structures in common areas of a subdivision that immediately support the residence in the form of essential services. This case will further enable community association and construction defect lawyers in Florida to protect consumers who rely on the expertise of the developer for the proper construction of their new home.

The court found that a homeowners association does have a claim for breach of common law implied warranties of fitness and merchantability, which is also often referred to as a warranty of habitability, against a builder/developer for defects in roadways, drainage systems, retention ponds, and underground pipes. The court ruled that the unit owners in the community are entitled to consumer protections under the law. It wrote in its ruling that the defects in the case involve “. . . complex site improvements, some of which are underground. These improvements were put in so that the builder/developer could market move-in ready homes in a completed subdivision. The planning, permitting, site work and construction required to build these improvements requires expertise far beyond the expertise of the average homebuyer,” who must therefore rely on expertise of the builder/developer. The ruling also notes that: “The builder/developer is in a superior position to ferret out and discover defects in the construction of the improvements and to have the defects timely cured during construction. Upon completion of the construction, the defects are not readily discernable to the average homebuyer, even with diligent inspection.”

In its conclusion, the court disagreed with the Fourth District Court of Appeal’s ruling in Port Sewall Harbor & Tennis Club Owners Association, Inc. v. First Federal Savings and loan Association of Martin County, 463 So. 2d 530 (Fla. 4th DCA 1985) which held that the homeowners association could not recover under a theory of breach of implied warranties of fitness and merchantability for defects in the construction of certain roads and drainage areas in the community. Accordingly, until the Florida Supreme Court resolves the conflict or the Florida Legislature grants warranties from the developer to purchasers of new homes, the extent of the implied warranty of habitability will depend on where the residence is located in Florida.

This is a very important ruling for homebuyers and homeowners associations in Florida, as the lower court’s decision in the case could have impeded many lawsuits by associations and unit owners against developers and builders involving these hidden and latent defects in the common areas of a community. Our attorneys who focus on construction defect lawsuits will continue to monitor cases and decisions such as these in the Florida courts, and we encourage those who are interested in our input and analysis of these matters to add their e-mail address in the subscription box on the right in order to automatically receive all of our future blog posts.

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