Construction defect suits are now flooding the courts of North America in greater numbers every year. The majority of construction defect suits and appellate decisions arise in a few litigious jurisdictions but are spreading across the country like Kudzu. The courts of Texas, Florida, New York, Colorado, and California have generated a great deal of the law on the subject that is then applied or adopted by other states whose courts have not seen the same volume of construction defects litigation.

What Is Involved?

All buildings have an expected life span. None, except the Egyptian Pyramids, were designed to last eons. Yet, even the pyramids in Egypt will erode to a mound of sand given enough time, wind, water and the movement of tectonic plates. Their demise will be an expected result of age and erosion rather than a construction defect. Venerable, well-constructed, structures seldom fail because of their advanced age. Usually, they are torn down and replaced with new structures before they have time to waste away.

Regardless of the methods or materials used, all structures can fail before the end of their useful life. Such a failure can cause damage to people or property. The failure of a component part of a structure that causes damage to a person or property can be considered a construction defect. If the component was not installed correctly, was not appropriate for the structure, or was defectively constructed, the manufacturer, seller, and/or installer of the component may be held responsible for the damages caused.

When structures fail, the damages can include, among other things:

• a total collapse of the structure and injury to its occupants;

• an inability to keep rain water out of the structure;

• cracking, settling, or subsidence of concrete flatwork;

• cracking, settling, or tilting of walls;

• doors that do not fit;

• windows that do not operate;

• walls out of plumb;

• walls, doors, and windows that leak;

• foundations that settle, crack, or subside as a result of subsidence or hydroconsolidation of the soils on which the foundation is placed; mold growth on floors, walls, and ceilings;

• acidic emissions from Chinese-manufactured drywall; or

• damage to person or property of third parties.

Who is Involved?

Construction defect claims and suits are proliferating. Courts across North America are overflowing with multi-party lawsuits brought by condominium associations, Canadian Strata Organizations, owners of tract homes, and commercial property owners. As construction defect claims proliferate it has become not unlikely that most people will either pursue or defend a construction defect claim at some point in their lifetime.

The dollars involved in construction defect litigation have grown exponentially. If a problem exists in a multiple unit condominium association or a housing tract, minor repairs of the defects multiply over the various units to millions of dollars. In addition, the complexity of a construction defect suit usually results in hundreds of hours of work for attorneys, and the need for separate counsel for each party defendant like the owner, architect, general contractor and each subcontractor. The attorney’s fees generated in cases with multiple parties are high and settlements and judgments are often extremely large.

The targets of construction defect litigation are many and varied. Construction defect claims can be presented to any of the following:

• property owners,

• builders and contractors,

• buyers,

• sellers,

• part manufacturers,

• suppliers of materials used in original construction or repairs,

• designers,

• property managers,

• architects,

• engineers,

• geotechnical engineers and geologists,

• surveyors,

• subcontractors,

• real estate inspectors,

• real estate brokers and sales people, or

• real estate investors or developers.

The above article was drawn from Construction Defects Coverage Guide, and originally published by The National Underwriter Company, a Summit Professional Networks business as well as a sister division of PropertyCasualty360.

As a professional courtesy to PropertyCasualty360 readers, National Underwriter is offering this resource at a 10% discount (automatically applied at checkout).

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