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Frequently Asked Questions in California

Question One - WHAT TYPES OF CONDITIONS REPRESENT CONSTRUCTION DEFECTS FOR WHICH THE LAW PROVIDES A REMEDY?

Answer: Construction defects are caused by violations of the Uniform Building Code, failure to follow the construction plans, improper application of building materials, and component product failure.

Typical defects include:

  • Leaking windows, sliding doors and curtain walls;
  • Failure of deck coatings and flashings;
  • Subterranean water intrusion at underground parking garages;
  • Improper installation of plumbing and mechanical components;
  • Failure of plumbing pipes, gaskets and valves; and
  • Fire safety and fire resistivity Code violations.


Typical mid-rise defects include:

  • Leaking windows and sliding doors;
  • Water intrusion behind stucco / EIFS systems;
  • Failure of deck coatings and flashings;
  • Subterranean water intrusion at underground parking garages;
  • Improper installation of plumbing and mechanical components;
  • Failure of plumbing pipes, gaskets and valves; and
  • Fire safety and fire resistivity Code violations.


Typical high-rise defects include:

  • Leaking windows, sliding doors and curtain walls;
  • Failure of deck coatings and flashings;
  • Subterranean water intrusion at underground parking garages;
  • Improper installation of plumbing and mechanical components;
  • Failure of plumbing pipes, gaskets and valves; and
  • Fire safety and fire resistivity Code violations.

Question Two - IS THERE A REMEDY?

Answer: When the developer is not willing to make repairs, and the association cannot afford them, California law provides a means by which you can recover the cost of repairing the construction defects.

In California, developers, as producers of mass produced homes, are strictly liable for construction defects. This means that a property owner must merely prove the existence of a defect rather than the precise mechanism causing the failure.


Question Three - WHAT IF YOUR DEVELOPER HAS FILED BANKRUPTCY OR IS NO LONGER IN BUSINESS?

Answer: The developer and general contractor are primarily responsible for the construction defect problems you are experiencing. They are insured under an Owner Controlled Insurance Policy (OCIP) which provides coverage for the developer, the general contractor and the subcontractors. This policy is project specific and will provide coverage for many of the defects and the resultant damages.

Many property owners are under the impression that if the builder has declared bankruptcy or is no longer in business, they are without a remedy. This is not the case if the builder carried liability insurance. The claimant can have the bankruptcy set aside and can collect any judgment or settlement from the available insurance of the builder.


Question Four - WHAT IS INVOLVED IN A CONSTRUCTION DEFECT CLAIM?

Answer: While every case is different, a questionnaire is sent to the homeowners to determine which conditions are most prevalent. A team of experts is assembled to inspect and determine the nature and extent of the construction defects. Depending on the conditions of concern, this team will include: forensic architects, a civil engineer, a structural engineer, a soils engineer, a general contractor, a mechanical engineer and an electrical engineer.

After completing on-site inspections and testing, a list of defects is prepared by the experts and provided to the developer. The developers and subcontractors then perform their own inspections and testing.

Once the testing and inspections are complete, we begin a series of negotiations and mediation with the developer and the subcontractors. If the developer chooses not to make repairs or settle the claim through mediation, the case will proceed to litigation and possibly trial.

The cost of prosecuting a construction defect claim can be very high, ranging from several thousand dollars for a single issue to hundreds of thousands of dollars for a complete investigation of a large condominium complex.

Several alternatives exist for funding such costs. California Civil Code Section 1365.5 gives an association the right to borrow against its reserves to pay for litigation. An association may also borrow the money from a bank for a litigation line of credit.

Our law firm offers a program whereby the firm advances all costs of the claim. The costs are paid back out of the case recovery. In this manner, the client will not be required to pay any out of pocket costs to fund the construction defect claim.


Question Five - WHAT IS INVOLVED IN A MID-RISE CONSTRUCTION DEFECT CLAIM?

Answer: Mid-rise construction defect cases are very different from the typical stucco and tile roof condominium case. Different design, different construction materials and different subcontractors are used in the construction of a mid-rise building. Inspection and testing of a mid-rise building is substantially different and more technical than in traditional construction, involving differences in fire code, mechanical systems and overall construction as compared to typical condo construction. Additional items such as counter balancing systems or swing stages along with the planning for getting equipment and personnel vertical requires mid-rise experience.

A team of experts is assembled to inspect and determine the nature and extent of the construction defects. Depending on the conditions of concern, this team will include: forensic architects, a curtain wall/window wall expert, a civil engineer, a structural engineer, a soils engineer, a general contractor, a mechanical engineer and an electrical engineer.

After completing on-site inspections and testing, a list of defects is prepared by the experts and provided to the developer. The developers and subcontractors then perform their own inspections and testing. Once the testing and inspections are complete, we begin a series of negotiations and mediation with the developer and the subcontractors. If the developer chooses not to make repairs and the claim cannot be settled in mediation, the case will proceed to arbitration or litigation.

The cost of prosecuting a construction defect claim can be very high, ranging from several thousand dollars for a single issue to 500,000 dollars for the complete investigation of a mid-rise project.

The methodology of repairs to a mid-rise, which must incorporate exterior access costs and high end interior finishes, results in higher costs of repair and different strategies for resolving the case.


Question Six - WHAT IS INVOLVED IN A HIGH-RISE CONSTRUCTION DEFECT CLAIM?

Answer: High-rise construction defect cases are very different from the typical stucco and tile roof condominium case. Different design, different construction materials and different subcontractors are used in the construction of a high-rise building. Inspection and testing of a high-rise building is substantially different and more technical than in traditional construction, involving differences in fire code, mechanical systems and overall construction as compared to typical condo construction. Additional items such as counter balancing systems or swing stages along with the planning for getting equipment and personnel vertical requires high-rise experience.

A team of experts is assembled to inspect and determine the nature and extent of the construction defects. Depending on the conditions of concern, this team will include: forensic architects, a curtain wall/window wall expert, a civil engineer, a structural engineer, a soils engineer, a general contractor, a mechanical engineer and an electrical engineer.

After completing on-site inspections and testing, a list of defects is prepared by the experts and provided to the developer. The developers and subcontractors then perform their own inspections and testing. Once the testing and inspections are complete, we begin a series of negotiations and mediation with the developer and the subcontractors. If the developer chooses not to make repairs or settle the claim through mediation, the case will proceed to litigation and possibly trial.

The cost of prosecuting a construction defect claim can be very high, ranging from several thousand dollars for a single issue to a million dollars for the complete investigation of a high-rise project.

The methodology of repairs to a high-rise, which must incorporate exterior access costs and high end interior finishes, results in higher costs of repair and different strategies for resolving the case.


Question Seven - CAN HOMEOWNERS SELL OR RE-FINANCE THEIR HOME DURING CONSTRUCTION DEFECT LITIGATION?

Answer: Certain lenders and lending institutions have policies against financing properties involved in construction defect litigation. However, many lenders and lending institutions regularly provide financing for sales and refinancing of properties while in construction defect litigation. Certain companies specialize in providing loans on property involved in construction defect litigation.


Question Eight - WHAT MUST I DISCLOSE TO A POTENTIAL BUYER?

Answer: Regardless of whether there is construction defect litigation, individual homeowners have a legal duty to disclose any construction defects they have knowledge of to potential purchasers. There is a box to check on the standard real estate disclosure form (California Civil Code, Section 1102) if construction defect litigation has been filed with the Superior Court.


Question Nine - WHY ARE EXPERTS NECESSARY AND WHAT DO THEY DO?

Answer: Experts are critical to proving your construction defect claim. A team of experts in various fields of construction will be necessary to determine the nature and extent of your construction defect problems, to design methods of repair and to estimate the cost of such repairs.

While every case is different depending upon the type of conditions at issue, the core team of experts typically consists of an architect, a civil engineer, and a general contractor. Additionally, depending upon the complexity of the issues, other experts such as plumbing, mechanical & electrical experts, a structural engineer, or soils engineer may be necessary. Our firm advances the cost of these experts and the costs are paid back out of the recovery. In this manner, the client is not required to pay any out of pocket costs to fund the construction defect resolution process.


Question Ten - WHAT ARE ASSOCIATION RELATED ISSUES AND WHAT ARE INDIVIDUAL RELATED ISSUES?

Answer: The California legislature has determined that in a condominium setting the association should be the party to seek recourse for common areas, separate areas that they are required to maintain, and separate areas that are “integrally related” to common area issues.

Accordingly, if a carpet has been ruined due to moisture from an exterior leak, the association would be the party to seek recourse. However, if the carpet was ruined due to moisture from a faucet leak, it would be the homeowner’s responsibility. Other examples of homeowner responsibility include kitchen cabinets and interior finishes, unless damaged from the exterior.


Question Eleven - WHAT KIND OF LIABILITY DO THE COUNTY OR CITY INSPECTORS HAVE?

Answer: Pursuant to California statute, county and city inspectors are immune from liability for building deficiencies with minor exceptions relating to fraud or gross malfeasance.


Question Twelve - HOW WILL WE BE UPDATED ON THE PROGRESS OF OUR CONSTRUCTION DEFECT CLAIM?

Answer: Our attorneys will attend board meetings regularly to answer questions and fully inform the board of the current status of the case, making recommendations where appropriate.

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