The term “construction defect” refers to any deficiency in the design, material or construction of a building or structure where the design professional and/or the contractor falls below the applicable standard of care in the industry. A designer and/or contractor is required to perform its work in a reasonably workmanlike manner and/or in accordance with a buyer’s reasonable expectation and use proper defect free materials.
Under some circumstances, these defects can manifest themselves in the form of “property damage” and/or “bodily injury”. There are also circumstances where defects can exist, but they do not pose a risk of or not result in property damage and/or bodily injury but nevertheless cause harm to the property owner in the form of loss of use, diminution in value, and extra expenses incurred while defects are corrected.
Construction defects can give rise to claims in tort such as negligent design and construction as well as in contract such as breach of contract and/or warranties and in most cases, these claims include both causes of actions in a lawsuit. Tort claims will require a form of resulting damage, while breach of contract claims usually will be based on breach of the contract terms such as delay claims, inferior materials, design and installation deviations and failure to perform work in a good and competent manner and according to the applicable standard of care required in the industry as well as all applicable laws and regulations such as building codes.
Insurance coverage for design professionals and contractors will also play a critical role in disputes involving construction defects. For there to be insurance coverage for negligence claims there must be resulting damage in the form of property damage and/or bodily injury where the design professional and/or contractor fall below the applicable standard of care. A defectively designed and installed balcony collapsing and injuring people is an example of bodily injury damage while defectively installed windows and doors leaking and damaging property is an example of resulting damage to property. It is important to note that for there to be insurance coverage for damage to property, the resulting damage has to be to property other than insured’s work. For example, if the defectively installed windows and doors leak and they cause damage to the window and door components and/or water proofing material installed by the same contractor, there maybe defect but since the resulting damage is to the installer’s own work/material, there may be no insurance coverage while the same defectively installed windows and doors leak and damage to hardwood floors of the house that may be type of resulting damage that invokes insurance coverage. Of course, there could be numerous other exclusions in insurance contracts for a variety of reasons such as mold exclusion, on going operations exclusion etc. That is why it is very critical to contact a lawyer who is well versed on these issues experienced in representing not just homeowners, but also developers, general contractors, sub-contractors and design professionals.
A construction defect claim can range from conditions resulting from aesthetic issues, such as improper surface painting to more intricate and complex issues, such as soil expansion or structural issues, like improper/poor framing and foundation.
Construction defects can occur within new or used residential homes, townhomes, condominiums, commercial buildings, developments, and/or subdivisions. A few examples of some Construction Defect issues include but are not limited to:
• Leaky windows/doors/pipes/roof
• Mold damage via water intrusion
• Drywall/stucco cracking
• Soil expansion/movement
• Material/product failure
• Geological/structural hazards
Construction Defects and/or Deficiencies can be grouped into four major categories, which include:
Design deficiencies
Materials deficiencies
Subsurface/geotechnical deficiencies
Substandard workmanship and/or poor-quality work
Design Deficiencies — These issues typically involve design professionals, such as engineers or architects. Design deficiencies are considered more complex, and the resulting damages can be very costly to repair. The problems one could encounter with design defects include, but are not limited to deficient design of roof, drainage, structural calculations, improper and/or deficient specifications of building materials, etc. These issues can result in a plethora of damages such as cracking and/or deterioration of components and materials, resulting in water penetration or intrusion, which can cause hazardous conditions like mold contamination.
Materials Deficiencies — These issues typically involve manufacturers or manufacturing problems, such as leaky windows and doors, defective waterproofing membrane, flashing, asphalt roofing shingles, particle board, inferior drywall and other wall products used in wet and/or damp areas, such as bathrooms and laundry rooms.
Construction Deficiencies (Substandard Workmanship/Poor Quality work) — These issues usually involve problems associated with work performed by general contractors, subcontractors, suppliers, etc. Typically, substandard workmanship or poor quality can pertain to cracks in the foundation, concrete slabs, drywall, stucco, etc., and/or problems in connection with electrical or mechanical systems, plumbing, insulation, HVAC, etc.
Subsurface/Geotechnical Deficiencies — It should be noted that certain areas like California, or properties built on a hillside or slope, have a significant amount of expansive soil conditions, due to the difficulty in obtaining a solid and/or stable foundation. Failure of design and installation of structures in these conditions can lead to very serious issues.
Finally, another important aspect of construction litigation will be the construction contracts and their terms. This is a critical issue on both sides of a construction or design contract. Most property owners, as well as most contractors, do not know and are not well versed in contractual agreements as these are usually drafted by people, including sometimes attorneys who do not have proper litigation experience and therefore can have a significant impact on the rights, protections and/or options of the parties involved on both sides of an agreement. These contracts can include indemnity, hold harmless and prevailing parties’ fees and cost provisions as well as alternative dispute resolution (such as mediation/arbitration or both) and specific insurance provisions, all of which will be instrumental in how the disputes will be handled.