Why does it seem like so many lawsuits arise from condominium construction projects? The answers might be found in a recent survey that examines construction deficiencies and how they affect condominium associations and owners of new condos.
The Community Association Institute, which represents homeowner associations nationwide, surveyed 525 homeowners associations. The survey says the majority of construction deficiencies (57 percent) occur in condominiums, versus only 17 percent for single-family homes. The survey cites causes of construction deficiencies and then delves into how those problems lead to disputes.
When asked about construction deficiencies, survey respondents’ most common answer was poor workmanship. The problems resulted in:
- Plumbing leaks
- Electrical issues
- Mechanical issues
- Cracks in foundations
Workmanship dwarfed the other survey responses, which were "designs that did not work as intended" and use of poor building materials.
The most common specific deficiency was waterproofing, which was cited by 48 percent of the respondents. It was followed by problems with the structure itself and problems with roofing. Deficiencies also showed up in decks, clubhouses and hallways.
Warranty Periods Are Too Short
Appliances, cars and electronics always seem to break right after the warranty ends. Add condos to the list.
The survey says nearly half of the construction deficiencies (47 percent) were discovered after the condominiums' warranty period had expired. The Community Association Institute urges state legislatures to extend the required warranty periods.
The Ability To Sell
Ultimately, construction deficiencies can lead to financial losses for condo owners and associations.
Homeowners often feel stuck when they live in a dwelling that needs repairs. In the survey, 26 percent of the respondents said a construction deficiency negatively impacted their ability to sell their condo. Respondents said when there is repair work being done or when there is construction-related litigation, banks are hesitant or unwilling to provide financing for prospective buyers.
It should come as no surprise that construction problems affect the value of condominiums. In the survey, 35 percent of respondents said the construction deficiencies hurt their property value. One respondent said condo owners who sold their units before repairs were finished lost 12 to 29 percent of their original investment.