Homeowner Associations, Construction Defect Claims and Roles of Key Persons

It seems like almost every attached housing community constructed in the last 20 years has had a construction defect claim.  This has lead builders to seek protections.  Even so, association construction claims continue to increase.  This article focuses on the key persons in a construction defect claim, the relationships of those persons and the role each plays in the success of the claim.

What Makes for a Successful Construction Defect Claim?

The success of these claims depends greatly on:

  • Construction issues present and their severity.
  • The construction defect attorney engaged.
  • The relationships between the association, the construction defect attorney, the manager, the association’s general counsel and experts.

For purposes of this article, it is assumed that the association has several defects and the builder has not been responsive to requests for repair.

The Construction Defect Attorney Handling the Claim

The construction defect attorneys must:

  • Be familiar with community associations and construction defect claims.
  • Keep the manager, board and experts informed.
  • Coordinate with general counsel for the association.
  • Quarterback the claim and its litigation or arbitration.
  • Establish objectives, priorities and strategies early.
  • Oversee all construction and expert reports.

The Board of Directors

The Board of the Association must:

  • Seek to understand the requirements of the litigation or arbitration process and the role of each player.
  • Remain informed regarding the claim.
  • Keep incoming board members informed.
  • Analyze; include and support the claim both financially and philosophically.
  • Consult with the association’s general counsel, as needed.

The Manager

The association’s Community Association Manager must:

  • Accumulate, maintain and produce adequate records of repairs/defects.
  • Be on the same page as the construction defect attorney.
  • Understand and support litigation strategies and issues.
  • Keep the construction defect attorney informed regarding the Board’s activities and concerns.
  • Provide direction to the Board that is compatible with strategies supporting the claim.
  • Recommend appropriate contractors – in conjunction with the construction defect attorneys and the association’s general counsel.

The Experts

The experts engaged by the construction defect attorney must:

  • Develop data-collection necessary to satisfy the claim strategy.
  • Assist the Manager in implementing data selection procedures.
  • Coordinate use of contractors.
  • Take directions from the construction defect attorney, not the board or the manager.

A community which understands these basic principles for relationship building and implements them in their decision to pursue a construction defect claim will be rewarded with increased productivity, decreased stress, less wasted time and success on the claim.

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