Throwing money at a problem is not an uncommon approach to solving problems. When it comes to construction, it is a common misconception that if you pay enough for your home, you won’t have any problems with construction defects. But this is simply not the case.
In fact, high-end apartments and condominiums are often fraught with problems.
A recent case
In a recent story from The New York Times, the board of managers of a Manhattan condominium recently filed a lawsuit against its developer claiming the building – the tallest residential building in the world at the time it opened – was plagued with substantial construction defects. According to the story, the board manages an “ultra-luxe” condominium on Manhattan’s Billionaires’ Row where units started at $7 million and the penthouse sold for $95 million. Notwithstanding these prices, the board was compelled to bring a lawsuit against the developer claiming more than “1,500 construction and design flaws have led to flooding, electrical explosions and “horrible and obtrusive noise and vibration.”
According to the lawsuit, “What was promised as one of the finest condominiums in the City was instead delivered riddled with more than 1,500 identified construction and design defects to the common elements of the Building alone (leaving aside the numerous defects within individual units).”
What we can learn from this case
This is a cautionary tale to be sure and the board of this particular condo is far from alone. Many new construction projects are plagued with things like leaks, faulty elevators, defective windows and improper brickwork. As the housing and new construction market slowly returns to normal levels, it can only be expected that the number of claims regarding design flaws and construction errors will rise with it.
Typically, developers build the building and sell apartments to the individual condominium owners pursuant to an Offering Plan filed with the Attorney General of the State of New York. Construction lawsuits are generally filed by the condo board against the sponsor/developer and not directly against the contractor or architect who designed the property because they had no direct relationship with them. When sued, the developer will commence third party actions against the contractor, architect, and any other potentially responsible party who are brought into the suit to answer to the Sponsor’s claims.
The cost of a construction defect lawsuit can be extreme as it involves expert witnesses and reams and reams of construction data, plans and communications. In the meantime, owners often suffer with significant problems resulting from these defects including leaks, flooding, mold, noise and inoperable appliances and windows The cost of litigation, repairs, decrease in value and time spent dealing with these problems can be exorbitant. It is also not easy to sell units in a building which is in the middle of a construction litigation claim.
Properties of all values are affected
This problem isn’t limited to Billionaire’s Row. Construction defects occur in properties of all sizes and values and in all parts of the country.
Many individuals pour their life savings into purchasing an apartment or condo in New York City. In Manhattan, the median resale price of an apartment is $999,000 as of the second quarter of 2021 and their entire life savings is at risk when their building is tied up in construction defect claims.
Avoid problems before they arise
When construction defects arise, condominium boards need to react to and deal with this problem quickly as delay may result in inability to recover the damages which the units owners are now paying for. This is because the developers are often a single asset limited liability company which may not have any assets once the building is completely sold. A board who is facing these issues and not getting prompt satisfactory responses from the developers need to reach out to experienced counsel like those at Tane Waterman & Wurtzel, P.C., to assist.