MULTI MILLION DOLLAR JURY VERDICT FOR CONDOMINIUM ASSOCIATION
DEMONSTRATES IMPORTANCE OF TIMELY TRANSITION STUDY IDENTIFICATION OF CONSTRUCTION DEFECTS
MARYLAND CONDOMINIUM CONSTRUCTION DEFECT LAWYERS
A recent 5.6 million dollar Maryland jury verdict award in a Maryland condominium construction defect case demonstrates the importance of the first owner-controlled association board hiring and engineering company to perform a “Transition Study” to evaluate the construction of the common facilities and identify any construction defects. The first owner-controlled association board will comes into existence at a transition meeting during which owners becoming majority on the Board of Directors thereby transferring governance over condominium or HOA association from developer to owner control. Transition construction defect reports can be utilized to identify construction defects and bring them to the attention of the Developer/ Builder before construction defect warranties expire
WHY AND WHEN TO CONDUCT A TRANSITION STUDY
One of the most important challenges facing the first unit owner controlled board of directors is to determine whether the developer-created budget and reserve fund are adequate to cover the cost of maintaining the condominium’s construction over time. It is important to note that budgets and reserves are calculated based on the assumptions that the condominium facilities are constructed properly and have a normal life expectancy (e.g., a 25 or 30 year roof). Making such an assumption can be costly. Construction defects in the original construction can cause unanticipated repair and replacement expenses that wreak havoc on an association’s financial condition and long-term stability.
Construction defects may not be apparent when unit owners take control of the association. Defects can remain hidden for years until they manifested in the form of property damage (for example, water staining and leaks at roofs or windows). Left undiscovered and unrepaired, even minor, “easy to fix” construction deficiencies can result in extensive, hidden property damage requiring associations to borrow money and assess unit owners to cover the entire cost of repairing the developer’s construction defects and resulting property damages.
For these reasons, upon assuming control from a developer, the unit owner-controlled board should not assume that construction is proper. Rather, it should be a priority to hire an engineer or architect to perform a transition study (also referred to as a “construction deficiency report” or “building warranty analysis”) to evaluate construction of the community and identify potential construction defects while warranties are still enforceable so that any construction defects revealed can be submitted to the developer for warranty repairs at the developer’s expense.
A CASE STUDY:
CONSTRUCTION DEFECTS TIMELY REVEALED ENABLE MARYLAND CONDOMINIUM ASSOCIATION TO MAKE
MULTI MILLION DOLLAR WARRANTY CLAIM AND ULTIMATEY OBTAIN A CONSTRUCTION DEFECT JURY VERDICT AWARD
The importance of a timely transition study is illustrated by a recent Maryland court case in which the Maryland Construction Defect Attorneys at Cowie Law Group obtained a $5.6 Million construction defect jury verdict on behalf of an Anne Arundel County Condominium against a National Builder.
The case involved the Eden Brook Condominium, a 224-unit, 55-and-over, residential community in Odenton, Maryland. A transition study performed by an engineering company soon after the developer turned over control of the association to the unit owners revealed violations of building codes and industry standards in the construction of the exterior brick walls and installation of windows. The association’s consultants determined that extensive and costly repairs were required to repair these construction defects that would continue to cause damage to the buildings if not corrected.
The association, with the assistance of its Maryland construction attorneys, was able to use the transition study to bring the defects to the attention of the developer, Ryan Homes, and preserve the association’s warranty claims before they expired. Ultimately, attempts to have the developer / builder correct the construction defects failed and the association’s Maryland construction attorneys were forced to sue for the cost of repairing the construction defects and the damages caused by the defects. On November 19, 2012, following a five-week trial in the Anne Arundel County Circuit Court, a jury awarded the association $5,629,715 for the cost of repairing the construction defects.
LESSONS LEARNED
Without a timely transition study the association may not have discovered the defects until it was too late to preserve its legal rights, a result that would have saddled the unit owners with assessments for the total cost of repair and may have exposed the association to legal liability from its own membership. Instead, the condominium association, with the assistance of it Maryland construction lawyers was able to preserve its warranty and other construction defect legal claims and recover a jury verdict at trial when the developer and builder refused to repair the construction defects at the condominium.
Many condominium associations do not hire an engineer or architect to evaluate the construction of the condominium until they begin experiencing problems years after control of the association passes from the developer to the unit owners. This is a big mistake. The Maryland Construction Attorneys and Maryland Construction Defect Lawyers at our law firm are often contacted by condominium associations whose claims are either compromised or barred by statute of limitations because they never performed a transition study that would likely have revealed the construction defects.
An amicable repair resolution is more likely to be negotiated with the developer and builder when a construction deficiency transition study is presented to the developer while warranties are still enforceable. To ensure that developer repairs are proper and warranties are preserved it is essential that a newly formed unit owner-controlled association involve a qualified construction consultant and experienced Maryland construction defect attorney. An association that preserves its warranty claims in this manner will be able to legally enforce them should it become necessary.
Maryland Condominium Construction Defect Warranty Lawyers: Nicholas D. Cowie is a partner in Cowie Law Group Law Group, P.C. (formerly known as “Cowie & Mott, P.A.”), the construction defect law firm that represented the Eden Brook Condominium Association in the litigation referenced in this article. Attorney Stanford Kimmel and George Bealefeld also served as trial attorneys in that case. Please contact one of the Maryland Construction Attorneys or District of Columbia Construction Lawyers at Cowie Law Group for a free and confidential consultation regarding construction defects.
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