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Following are questions and answers concerning construction defects arranged in what we believe is a logical sequence. Additional questions and answers are added regularly, so please visit our site often. Please feel free to make copies for non-commercial purposes.

		Q:		What is defective construction?

		A:		Defective construction includes defects in design, in construction, in the choice of materials, or defects in the materials themselves. A defect exists if a particular building component differs from the developer’s intended result or differs from apparently identical construction. The buyer’s reasonable expectations upon purchase are important in this regard, along with any representations as to the condition or quality of the property that were made by the builder. Obvious defects are known as patent defects and those which are not reasonably observable, but are later discovered, are known as latent defects.

		Q:		Is a builder liable for damages even if the project was inspected and approved by the City or County building inspector?

		A:		Yes. If the project is defective, the builder may be liable even if the project meets all applicable local codes, has been approved by the building inspectors and has been built according to the standards of the local community. In addition to liability for negligent construction, or construction not meeting the standards of the community, builders and sellers of mass-produced housing are held to an implied warranty of fitness and are held strictly liable for construction defects without a showing of negligence or fault. Recent court cases have made it absolutely clear that strict liability applies to builders of multi-unit condominium projects. All that must be proven in court is that defects exist and what appropriate correction is required. The measure of the damage is the cost of repairing the defects, together with the value of the loss of use of the property during the period of injury.

		Q:		How do I prove that a defect exists?

		A:		In most cases, it will be necessary to hire the services of experts. Experts are professionals who have the necessary training, education and experience to give testimony in court as to the cause of a defect as well as the cost to properly cure the defect. For example, if your roof leaks, an expert who has designed roofs, evaluated other leaky roofs and knows how roofs should be constructed is in an excellent position to testify as to the reasons your roof leaks. Your lawyer cannot, in most cases, prove his case against the builder unless he has qualified experts. Experts are available for every aspect of residential construction. Expert’s services usually run from $150.00 to $300.00 or more per hour.

		Q:		What monetary damages can I recover in a lawsuit and can I recover attorney’s fees?

		A:		California courts are clear in awarding associations the cost of repairing the defects. Your association can also recover whatever reasonable fees you have had to pay for your experts to investigate the cause of your defects and their costs in supervising the repairs. The costs of doing temporary repairs during and before the lawsuit to mitigate the damages are also recoverable. If repairs require owners to vacate their homes, reasonable relocation costs are included. Punitive damages, or damages awarded to punish the builder and to deter similar conduct in the future, may be awarded where the builder defendant has shown a “conscious disregard” for the rights of the buyer, such as where there has been a fraudulent concealment by the builder. In some cases, attorney’s fees are recoverable but not always. In appropriate cases, it may be possible to obtain compensation for loss in market value.

		Q:		Is the association required to make repairs during the litigation?

		A:		Every party to the lawsuit has the duty to lessen or mitigate their damages where reasonably possible. In this regard, the association should make reasonable repairs, assuming that sufficient reserves or funds exist to do so, at least on a temporary basis so as to prevent the property from being damaged to a greater extent.

		Q:		What should I do if the builder has agreed to make the necessary repairs?

		A:		It is prudent to consult a lawyer who can assist in locating an independent expert to evaluate the builder’s investigation of the problem and his proposed repairs. The same expert should oversee actual repairs. Once repairs are agreed upon, the lawyer can draft a proper settlement agreement that does not absolve the builder of liability except for the limited and defined repairs being made, and then only after the repairs have proved effective. The builder will typically demand a broad form general release of all future liability in exchange for making repairs. Such a release may result in board of director liability should other defects appear during the time remaining before the expiration of the various statutes of limitation. For that reason, such a release is rarely, if ever, recommended. In short, insist on a specific limited release.

		Q:		How do we recover if the builder is out of business, cannot be located, or is bankrupt?

		A:		The most important asset is the builder’s insurance policy as well as the policies of the various subcontractors. Even if the builder cannot be located or is bankrupt, the various insurance companies must defend and pay claims that are covered under the policies. Builders almost always have insurance coverage because it is almost impossible to obtain construction financing without it. Likewise subcontractors are rarely hired unless they have insurance.

		Q:		Who normally files suit against the builder?

		A:		An association has the legal capacity or standing to bring a lawsuit for damages to the common areas, damages to the separate interests which the association is required to maintain or repair, and damages to the separate interests arising out of or related to damage to the common areas that the association is required to maintain or repair. As such, the association is the proper party to bring an action for construction defects.

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