In recent years, very few condominium projects have been developed in Minnesota despite strong demand from potential condominium homeowners. Many developers attribute their reluctance to build condominiums to litigation risk and difficulty obtaining insurance and financing for condominium developments at a reasonable cost. Read the article…………….
Issues That Cross State Lines: A Look at Condo Legislation Trends
When it comes to legislation and legal issues that apply to condo associations, co-ops, and other multifamily housing models, the focus is often local—city ordinances, council meetings, and so forth – but there are judgments handed down and bills passed that impact buildings and HOAs on a national level. For boards and managers who want […]
Supreme Court makes landmark ruling for condo developers (CO)
The Colorado Supreme Court on Monday upheld the right of condominium developers to require disputes go to binding arbitration, essentially putting into state law a contentious provision that construction-defects reform advocates said was the key to reviving a largely defunct condo market but could not get legislative Democrats to back. Read the article…………….
Colorado Supreme Court gives a boost to builders in construction defects battles
The Colorado Supreme Court gave builders a reason to cheer Monday, ruling that a homeowners association in Centennial was wrong to ignore a requirement that it first get consent from the developer before changing the way disputes over construction defects claims are handled. The 5-2 ruling in Vallagio at Inverness Residential Condo Association v. Metro. […]
Another Illinois Case Decides When an Asset Purchaser is Responsible for Liabilities as a Mere Continuation of the Seller
In our Risk Management Update of December 23, 2015, we discussed an Illinois case that had to decide when a successor entity purchasing the assets of its predecessor became liable for the debts of the predecessor. (“Mere Continuation” Doctrine Applied to Transfer Liability to Successor Entity). In that case, the issue was whether an intermediary […]
Minnesota amends its construction defect laws
Earlier this month we told you that (click here to see the story) about an effort to amend Minnesota’s construction-defect laws, which are among the most stringent in the nation, with a raft of amendments aimed at making it more difficult for a homeowner’s association to file a frivolous or unfounded claim. Those amendments, HF1538, […]
Construction Defect Reform in CO; HB 1279: Pluses, Pitfalls & Practical Pointers
Construction defect litigation reform will take a small step forward this week when Gov. John Hickenlooper signs HB 1279 on May 23, 2017. HB 1279 will go into effect immediately after signature by the Governor, and developers and residential builders will need to be aware of certain aspects of the law. HB 1279 has been […]
Shoddy condo construction lawsuits in Colorado just got harder to file, but that doesn’t mean development slumber is over (CO)
Declaring that the measure “will help make our housing more affordable,” Gov. John Hickenlooper on Tuesday signed into law one of the most hard-fought compromises of the 2017 session — a bill that will make it more difficult to sue builders for shoddy condo construction. Business leaders for years have been seeking wholesale reforms […]
Compromise Bill on Construction Defects is Ready for Governor Signature (CO)
On May 4, 2017, House Bill 17-1279 gained final unanimous approval in the Senate after unanimous approval in the House on April 24, 2017. H.B. 17-1279 has been referred to Governor John Hickenlooper to be signed into law. H.B. 17-1279 requires that before an association, on behalf of its members, files suit against a developer […]
Legislature’s changes to construction-defect laws could help condo developers (MN)
Several much-anticipated changes to Minnesota’s construction-defect laws are closer to the governor’s pen. The amendments to House File 1538 received bipartisan support and went to a conference committee for House and Senate members to hash out differences. The current, long-standing statute was aimed at protecting homeowners from construction defects that might not have been discovered […]
Fortis not responsible for $2M in defects caused by prior developer, judge says in ruling against 20 Bayard Street residents (NY)
A court decision in Brooklyn last week will let Fortis Property Group get away with selling allegedly faulty condominiums in Williamsburg, for the simple reason that Fortis wasn’t the one that built them in the first place. When developer Isaac Hager’s company went into bankruptcy at the 64-unit Bayard Views Condominium at 20 Bayard Street […]
Construction Defects and Insurance Coverage: When Is the Duty to Defend Triggered?
In Florida, an insurance company may have a duty to defend and/or indemnify its insured. The insurance company’s duty to defend its insured (as in defending the insured in a lawsuit) is broader than its duty to indemnify (as in paying for damages caused by the insured). The duty to defend is separate and apart […]
Construction Defects and Insurance: Proactive Steps to Protect Your Community
All the media and legislative talk of construction defect litigation and its impact on condominium construction in Colorado may seem like discussion that does not impact existing communities. But the changes to state and local laws concerning construction defect litigation do affect existing communities by creating owner notice and vote requirements that, in some cases, […]
Economic Damages and the Right to Repair Act: You Can’t Have it Both Ways (CA)
In 2002, the California State Legislature passed Senate Bill 800 also known as the Right to Repair Act (Civil Code Sections 895 et seq.) in an effort to stem a then rising tide in residential construction defect litigation. SB 800, which applies to newly constructed residential units including single-family homes and condominiums (but not condominium […]
Plaintiffs in $4.7 million construction defect case mum after ruling
Plaintiffs in a major construction lawsuit that ended with a San Diego law firm recovering nearly $5 million have decided to stay silent after the ruling was in their favor. The law firm, which represented Laurel Bay Community Association, won $4.7 million in the case that was filed Aug. 21, 2013, against the developer and […]
Construction Defect – Application of the Right to Repair Statute to Material Suppliers (CA)
Civil Code § 8951 et seq. (the “Act”) establishes a set of building standards pertaining to new residential construction and provides homeowners with a cause of action against, among others, material suppliers, for a violation of the standards(§§ 896, 936). Here, the Fourth District Court of Appeals was asked to decide whether the Act requires […]
Condo board sues VE Equities, Elliman over alleged defects at 250 Bowery (NY)
The condominium board at 250 Bowery filed a lawsuit against developer VE Equities, Morris Adjmi Architects and Douglas Elliman for allegedly selling them shoddy apartments. In a complaint filed with New York State Supreme Court Thursday, the board alleges that the 24-unit Lower East Side building’s water pipes weren’t properly insulated, leading one of them […]
(CO) Capitol Conversation: Construction Defects
Lawmakers in both parties are trying to make it more difficult for homeowners to sue condo developers over construction defects. They hope it will lead to more condo development and lower rents. But despite widespread support for the concept, legislation hasn’t been able to pass in previous years. We talked about the issue with Peter […]
New Jersey Supreme Court Affirms Coverage For Construction Defects
The New Jersey Supreme Court has affirmed the Appellate Division’s pro-policyholder decision in Cypress Point, confirming broad coverage for construction defects. Cypress Point Condominium Association v. Adria Towers, LLC (A-13/14-15) (076348) (August 4, 2016). The Appellate Division had reversed the trial court decision that denied coverage. In a scholarly decision, the Supreme Court traced the […]
Legal Matters: Potential defense to construction defect claims
Anyone in the construction industry would likely acknowledge that litigation – and particularly construction defect litigation – is a part of doing business. But it is an expensive and time-consuming part of the business. The costs and likelihood of litigation increase when dealing with larger buildings – such as apartments, condos or townhome complexes – […]
The Do’s and Don’ts of Community Association Warranties
When your homeowners association took control of your community from the developer, a lot of paperwork came with that. Some of the paperwork undoubtedly included a number of warranties. Since then, you have probably collected warranties for a range of products and services your association has purchased. But be honest: How familiar are you with […]
More Millennium Tower residents sue developer, city (CA)
Following November’s lawsuit, 20 tower residents led by Jerry Dodson, a former government litigator who also happens to live in the offending building, launched yet another suit against both the city and building developer Millennium Partners. The complaint alleges that both Millennium Partners and the Department of Building Inspection knew as early as 2009 that […]
Federal Appeals Court Finds Luxury Condo Owner’s Suit Filed too Late Against Insurer (NV)
A luxury high rise condominium located in Las Vegas, Nevada, was found to have been barred from recovery of its $5 million window damage claim, according to a ruling by the Ninth Circuit of the U.S. Court of Appeals. The December 2016 appeals court ruling affirms a Nevada judge’s decision to dismiss the case based […]
Leverage Shift: Community Associations Facing Developer Transition Benefit From Court of Appeals’ Decision (NC)
The North Carolina Court of Appeals recently issued an opinion that should make it easier for owners associations to pursue remedies against developers if they discover construction defects in the common elements after control of the association is transferred from the developer to the members. Trillium Ridge Condo. Ass’n, Inc. v. Trillium Links & Vill., […]
Macklowe sued over alleged defects at 150 E. 72nd St. (NY)
Residents of Harry Macklowe’s condo conversion at 150 East 72nd Street are very unhappy with their purchases — they’re taking the notoriously litigious developer to court over alleged construction defects and what they’ve said is a woefully inadequate building reserve fund. Read the article…………
Oregon High Court Clarifies How To Read the Four Corners of a Complaint
On December 8, 2016, the Oregon Supreme Court issued a decision, West Hills Development Co. v. Chartis Claims, Inc., 360 Or. 650 (2016), clarifying what allegations in a construction defect suit will implicate coverage under an “ongoing operations” additional insured endorsement. In West Hills, the complaint at issue regarded damages suffered by the plaintiff HOA, […]
Pre-Litigation Requirements For Condo Associations (TX)
When general contractors, subcontractors, and design professionals face claims or lawsuits arising from original construction or remediation of condominium projects, one of the most important—and also sometimes one of the most difficult tasks—has always been to catalog, usually by unit number, every item of claimed damage by Plaintiff. This can be a challenge when individual […]
New Appellate Ruling Increases Residential Builders’ Exposure to Defect Liability in Illinois
Illinois law on the implied warranty of habitability (IWH) is continuously changing, and residential builders should take notice of a new opinion issued by the Appellate Court, First District, on October 26 in a construction defect dispute. Although the procedural history is convoluted (the opinion consolidated three separate appeals), the underlying fact pattern is fairly […]
Six years on, Kolter Signature Homes lawsuit goes to trial
After six years of legal maneuvering one of the longest-running cases over faulty construction in Florida is finally going to trial. Jury selection starts Tuesday in a case pitting the San Matera Condominium Association against Kolter Signature Homes, and other defendants for alleged sub-standard architecture, engineering and construction work at San Matera at the Gardens, […]
The Earth Movement Exclusion: How Does it Affect Construction Defect Cases?
One of the biggest considerations for parties on both sides of any lawsuit is whether insurance coverage will apply to the plaintiff’s claims. This is especially true in construction defect cases, where the cost of repairing the alleged damage can be significant, and quite often beyond the financial means of the construction professional being sued. […]
New Jersey Supreme Court Issues Important Ruling for Developers and General Contractors Regarding Coverage Under CGL Insurance Policies
The New Jersey Supreme Court’s August 4, 2016 holding in Cypress Point Condominium Association, Inc. v. Adria Towers, LLC is the latest decision to fall in line with the “strong recent trend” by state and federal courts to recognize that standard commercial general liability (CGL) insurance policies provide coverage for property damage caused by the […]
Threat of Lawsuits Crimps Condo Developments
The slow comeback stems partly from developers’ increasing confidence in rental-apartment buildings as young adults and middle-aged families stung by the housing crash have turned to renting. But developers also point to increased exposure to construction-defects lawsuits, which they say have made insuring large projects much more expensive. Read the article…………….
New Jersey Supreme Court Finds Coverage Under a Developer’s Commercial General Liability Policy for a Subcontractor’s Faulty Workmanship
On August 4, 2016, the New Jersey Supreme Court issued a unanimous decision in a case regarding insurance coverage that could have lasting impact on developers, contractors, and subcontractors. In Cyprus Point Condo. Ass’n, Inc. v. Towers, 2016 N.J. LEXIS 847 (Aug. 4, 2016), the Supreme Court ruled that under a property developer’s commercial general […]
Arbitration of §553.84 Claims Under Home Warranties (FL)
One of the most common statutory claims in construction defect litigation arises under section 553.84, Florida Statutes, for failure to comply with the Florida Building Code. Many homeowner warranties require arbitration, but how do such provisions affect 553.84 claims, subsequent purchasers, and homeowners associations? Read the article…………..
Reductions in Property Value Due to the Presence of Construction Defects
Last month the Oregon Supreme Court recognized and seemingly affirmed a strategy to reduce taxable property value due to the existence of construction defects. In Oakmont, LLC v. Oregon Dept. of Revenue (2016), the owner of an apartment complex valued at approximately $21million negotiated with the county assessor to reduce the taxable value by sixty […]
Colorado Supreme Court to Rule on Yet Another Key Construction Defects Issue
On July 5, 2016, the Colorado Supreme Court announced it will consider the construction defects case of Forest City Stapleton, Inc., et al. v. Rogers. In this case the Colorado Court of Appeals, for the first time, imposed an implied warranty of “suitability” for new home construction in certain instances. The Colorado appellate court held […]
Construction Defect Debate to be Heard by Colorado Supreme Court
The construction defects case of Vallagio at Inverness Residential Condominium Association, Inc. v. Metropolitan Homes, Inc., et al. has garnered national attention since the Colorado Court of Appeals’ decision in May 2015, and the subsequent petition for certiorari review to the Colorado Supreme Court. Developers, contractors, homeowner associations and others on both sides of the […]
Revisiting Condominium Design and Construction Risks: Applying Lessons Learned to a Rekindled Market
Condominium work for developers, contractors and architects is reappearing after being scarce for several years, as leasing becomes less attractive to a maturing class of residential market participants. Condo projects can be attractive work, but are also high-risk. To a large extent, risk has increased as contractual protections have decreased Read the article………….
Major Legal Win for Condo Boards (NY)
In a ruling that could have major consequences for condo boards across the city, the Appellate Division has upheld an earlier State Supreme Court ruling that a sponsor/developer can be held liable for breach of contract and its principals can be held liable for fraud over construction defects and misrepresentations in an offering plan. […]
4 Tips for Handling Construction Defects
Locating and fixing construction defects is one part of an association’s job, and there are a lot of different types of construction defects, such as peeling paint, curing shingles, wood rot, etc. If your HOA has located any construction defects within the community, check out these four tips on how to handle them properly. Read […]
Revisiting construction-defect law, a year later (NV)
Primarily, AB 125 narrows the definition of “constructional defect” to any defect that causes physical damage to the property or presents an “unreasonable risk of injury to a person or property,” eliminates the mandatory award of attorneys’ fees as a component of statutory damages, sets the statute of repose for construction-defect claims at six years, […]
BK Heights (NY) condo board sues Magic Johnson’s firm over alleged building defects
The condominium board at 20 Henry Street is suing Magic Johnson’s development firm Canyon Johnson Urban Funds and its joint-venture partners for alleged defects at the building. Read the article…………
Litigating Construction Defects in Community Association Property: Part IV
Once all of the necessary parties have been added to the proceeding and some basic discovery has been conducted, the Board will need to prepare for significant settlement discussions. Up to this point, the Board likely knows there are significant defects but likely doesn’t have a real concrete understanding of what is causing the problem […]
Litigating Construction Defects in Community Association Property: Part II
This article is Part II of a four part series. Part I was meant to inform the Board of a Condominium or Homeowners Association of some basic steps that should be taken when significant latent construction defects are discovered. This article will discuss the retention of the lead expert witness and providing the statutorily required […]
The Transition Engineering Report: Triggering The Statute of Limitations in Condominium Construction Defect Cases
Earlier this year, the New Jersey Appellate Division reversed a Bergen County trial court decision, which had dismissed a construction defect case filed by a condominium association more than six years after the condominium complex was substantially completed, but less than six years after the association received the transition engineering report identifying construction defects. Read […]
Litigating Construction Defects in Community Association Property: Part 1
The Board of a Condominium Association or Homeowners Association has many decisions to make when it discovers telltale signs of construction defects in common property. These latent construction defects can manifest themselves in a number of different ways, including but not limited to, water intrusion, peeling paint, staining, wood rot, cracking of stucco, concrete spalling, […]
Intervention by Individual Homeowners Deemed Timely
The Court of Appeal considered the issue of timeliness of a motion to intervene by individual homeowners in a suit filed by the Homeowners Association (“HOA”) to recover damages for construction defects. The Court of Appeal addressed the issue of timeliness of the motion, and determined that the appropriate standard was when the individual intervenors […]
(CA) Court of Appeals Clarifies Timeliness Requirement for Intervention
The timeliness of a motion to intervene in civil litigation depends on when the movants learned their interests were being inadequately represented, regardless of when they learned there was litigation, the Fourth District Court of Appeal has ruled. Read the article………..
Condominium owners sue city and county over building defects (CO)
Citing long-standing problems stemming from rotted infrastructure, mold and other water-related damage, Centennial condominium owners are suing the Pitkin County commissioners, the city of Aspen and the governments’ affordable housing program. Read the article…………
SB 800: Down but Not Out! (CA)
Until recently SB 800 was down for the count. Many in the building industry thought the law was going to be killed by the Liberty Mutual decision two years ago. It was there that the California Court of Appeal (in Liberty Mutual Insurance Co. v. Brookfield Crystal Cove, LLC) determined that California’s Right to Repair […]