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5 common questions about defects during turnover

For a new condo owners' association (COA), the thought of discovering a construction defect is unsettling. With standardized units, a defect in one unit is likely to have a large-scale impact and add up quickly. Before taking over the property, it's wise to review these commonly asked questions about construction defects.

1. What is a construction defect?

Defined broadly, a defect is a condition stemming from poor construction, design or materials that requires repair and results in a reduced property value. Construction defects can be lurking in visible or non-visible areas on your property. They include:

  • Problems with the structure: When a construction company makes an error, whether in design, technique or material, the result can be devastating. Some examples include:
    • Water damage
    • Termite infestation
    • Defective plumbing
    • Improper wiring
    • Fire code violations
    • Poor temperature control
  • Problems with the lot: These defects happen when the engineer or construction company fails to conduct their due diligence in assessing and shaping the lot, including subsurface conditions. Poor drainage, grading and soil compaction can lead to defects in the structure's foundation.

2. How are defects in condominiums identified?

Defects typically must be identified by an expert (such as an engineer) who is properly licensed. This person will also be able to provide key testimony in the courtroom as to the scope and cause of the defect should litigation become necessary. A lawyer who understands the Florida construction industry can help you find a trusted expert in your area.

3. What can the association do if they find a defect?

If a defect is identified during or after turnover, the first step that the association needs to take (through their attorney) is to notify the developer or other responsible parties. Depending on the response, there are two possible outcomes:

  • Working with the developer: If the developer agrees to repair the defect, it is important to secure a neutral manager to oversee the repair. This manager will assess the defect, come to an agreement with the developer on the proper remediation and oversee the execution. In addition to hiring a manager, the COA should utilize the expertise of an attorney to draft a legally binding agreement.
  • Taking the developer to court or arbitration: If the developer refuses to properly repair the defect, the next step is to take them to court (or arbitration, depending on the contracts involved). These steps can help the association recover damages.

4. What happens if the developer responsible for the defect is unreachable?

It is not uncommon for developers who have turned over defective properties to disappear. If that happens, an attorney can help you track them down. You may also be able to contact their insurance company and seek damages.

5. If the developer's insurance company won't pay, will our COA insurance step in?

Unfortunately, it's unlikely that your COA insurance will provide compensation for any defects the developer is responsible for. Most policies are limited in scope. A lawyer can review your policy to give you a definitive answer.

We previously posted about key components of an inspection report in an effort to raise awareness of common defects. Reviewing these areas in your inspection report is a critical step for owners who may have a time restriction on filing a claim. If any issues or questions arise during the turnover process, you should immediately contact a Florida attorney with experience in construction defect law. That attorney will thoroughly assess the situation and determine if you are eligible for compensation.

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