Tag Archives: Construction Defect

Big Amenities Still Being Added to this Big Apple Condo!

L.L. from New York City writes:

Dear Mister Condo,

Hi, Mr. Condo! We are in a 90-unit newer (2009 built) condo in NYC with doorman, gym, roof/grill facilities. A bike storage was originally promised by the sponsor. However, they have not been cooperative in fulfilling that promise. Currently the board presented a bike storage design that features another grill/kitchen, a still reflecting pool, fire pit and many seemingly excessive designs. Also, there is no budget or cap on this current project. Although we have an adequate Reserve Fund for the building, the board is planning on taking out a loan in addition to using cash to fund this project.

How much would a second grill/kitchen, small reflecting still water pool and fire pit add to the selling price of units in this building? Will the cost and maintenance/liability outweigh the positive? (To be honest I am failing to see any positives on these added features)

Mister Condo replies:

L.L., sounds like you live in a lovely condominium, despite the problems you are now facing with the sponsor fulfilling all of the promised amenities. Despite the potential for increased costs and maintenance liability, it is likely that these additional amenities will make the condo more desirable, which is what drives up market value as well as outside factors like real estate prices for competitive units. I am a bit confused about why the Board needs the loan if the sponsor is still in the picture but these amenities are likely part of the master plan that was approved and need to be either completed or, if possible, removed from the plan by a vote of the unit owners. You may also face pushback from the city as the project approved is the only one that can be built without going through the approval process again with no guarantee changes would be acceptable. In other words, in for a penny, in for a pound and the most likely course is for the original plans to be honored, regardless of the price and regardless of whether or not individual unit value will increase because of the amenities. I’ve never known property values to decrease because of increased amenities and my guess is that it will enhance the value of your existing units. All the best!

Condo Developer Transition Litigation Nightmare

N.P. from outside of Connecticut writes:

Dear Mister Condo,

I am in a large condo association that was in litigation with the developer when I purchased many years ago. We were never told of the litigation, and strangely enough had no problem getting our mortgage, which was not the case with many potential buyers from what I have been told. Over the years, the board, which is a veiled one, never fully disclosed the extent of the deficiencies until 6 years after the litigation ended. Now every member has been told we will be assessed potentially over $60,000! (They have not done bids yet for the work.) The board will not allow us to see a cost breakdown as to how the engineering company got to this amount. The property manager has also said that in times of litigation open meetings are not required even to ratify any binding action. The minutes of open meetings cannot be accessed because this management company has said anything before their time (3 management companies in 7 years) is missing. To top it off, there was a recent election in which the property manager was bad mouthing certain people running as write-ins to people just turning in their proxies. Faced with this huge looming bill, I am feel like this community is in huge trouble. I fear numerous foreclosures and the association going belly up! What can we do?!

Mister Condo replies:

N.P., I am truly sorry for your situation. The developer transition period is a unique time in an association’s history and it is a time that requires all unit owners to be wide-eyed, leery, and as well-represented as possible. I have written numerous columns on the subject which you can read by following this link: http://askmistercondo.com/?s=developer+transition

I would love to say that your situation is unique but that is hardly the case. The dollar amount in question is unusually high but I have heard of worse, especially when the transparency is lacking between the developer and unit owners. It is not too late to take corrective actions but the underlying financial damage is likely to remain and perhaps intensify if the association needs to take legal action against the developer. Here is what I would recommend you and your fellow unit owners do to protect yourselves.

First and foremost, speak with a qualified community association attorney (NOT the Developer’s Attorney!). You need legal guidance here and each state has its own version of condominium and incorporation acts that will likely come into play. Construction defect lawsuits are not uncommon, can be very expensive, and tricky to pursue. However, money invested in a construction defect lawsuit that may yield millions for the association is money well spent, in my opinion.

You need to understand which phase of developer transition your community is in. Has the developer relinquished governance of the association to the Board or is the Board only functioning as outlined in the development stage, meaning the developer still has large control of the Board? If the developer is no longer in control, different rules apply. This is another discussion to have with your community association attorney. If the Board is in full charge of governing the community, it is also likely time for a new management company as the one originally in place had the best interests of the developer in mind and not necessarily the unit owners. From what you have described, this management company is working for the developer, not the association. 3 management companies in 7 years is not a good thing. Be sure to thoroughly interview thoroughly to make sure the next management company is a better fit for the association.

Finally, consider selling before it gets any worse. This is going to be an expensive and drawn out process. If you don’t have the constitution for it, get out while you can and consider moving into another condo without these problems. Even if you talk a loss to sell your unit, you may be coming out ahead of a $60K special assessment and who knows what else if a legal battle ensues. When money is needed from a community association there is only one source: the unit owners. You might just do better to cut your losses and move on. Good luck!

Complacent Condo Owners Liable for Board’s Poor Performance

F.M. from outside of Connecticut writes:

Dear Mister Condo,

I joined the board a year ago. The other board members are there for decades, not by vote but because we never reached the minimum quorum to carry out an election. After investigation, I found several flubs in the past decisions that led us to severe loss to our condominium. One of them, amounts to almost $300,000 in losses with the cost of irrigation water. The association has been paying the local utility company by the highest water rate when it should be 70% lower if they had applied with the utility company for a lower rate based on the size of our property. The lower rate was available since 2008 and it was very easy to learn about. Another issue is the roofs of our buildings. The wooden shakes were replaced in 2004 after damages caused by a hurricane. However, as I learned, the wooden shakes replacement was not done by Standard Building Code. The association did not hire an architect or engineer to guide them in the reconstruction process. As a consequence, the roofs were replaced by local contractors and are now in very bad shape, will not last much longer and the overall aspect is detrimental to our property values. Another issue is the most recent, and involves the resurfacing of our tennis court that had been in bad shape and useless for years. The association knew that the ground soil was sinking and that the soil needed to be addressed beforehand. Instead, they approved a cheap painting for $7,000. The tennis court is visibly off level. Considering the way decisions are made by the board, I am afraid that our condominium will suffer further downgrades if action is not taken to remove and replace the board members. Because of the last recession, more than 50% of our units are now rental units. It will not be an easy task to obtain signatures of 75% of all property owners to remove the board members. My question is whether a legal action to compel them to leave is a valid option.

Mister Condo replies:

F.M., I am sorry for the situation you find yourself in. I am not an attorney so I cannot offer you legal advice as to whether a legal action to compel the Board to vacate their office is a valid option. However, I will tell you that, in my opinion, it is not a valid option for the following reasons. Your association is a privately held, not for profit, corporation. The corporation was founded to govern the association and unless you can cite an explicitly illegal activity, the Board has done nothing legally incorrect. In fact, for decades, the unit owners of your association have returned them to office at Annual Meetings, where democratic elections have been held. Lack of quorum only shows that unit owners didn’t care enough to participate in the governance of their association. Shame on them for doing so as all unit owners have paid the price over and over again for their lack of attendance. If it were me, I would sell my unit and get out before any further financial damage occurred. That is an option available to you. If you wish to remain and try to effect change, you will need to seek other like-minded unit owners to run for election to the Board and get enough votes to win. If you think you have the votes/signatures to force a recall election prior to the Annual Meeting, you can certainly follow the steps on your governing documents to do so. However, with so many absentee owners, I agree with you that would be unlikely. Annual Meetings are typically your best bet for a changing of the guard. You will need to campaign for new Board Members and be sure they are ready to serve. You should reach out to resident unit owners ahead of time and write to absentee unit owners to encourage them to support these new candidates with a proxy vote. Change to association governance comes from within the association. Simply doing an inadequate job of managing the association resources isn’t enough to have Board members removed. It takes a fresh batch of candidates to unseat incumbent Board Members. And guess what? If your fellow unit owners don’t support that change, it isn’t going to happen. Good Luck!

Responsibility for Condo Construction Defect 30 Years After Developer Control

P.Z. from outside of Connecticut writes:

Dear Mister Condo,

During window and door replacement in my condo, built in 1988, it was discovered that there was about 18″ of insulation missing from the walls directly above the windows. It was corrected during the install of the windows. Is the association responsible to compensate me for the expense of properly insulating the space above the doors and windows? The property manager says no, but I think otherwise. What’s your take, please?

Mister Condo replies:

P.Z., in a perfect world, the missing insulation would have been the responsibility of the builder and would have been considered a building defect if uncovered back in 1988. However, that is impractical, if not impossible. In theory, the association takes over after the developer is through (the developer transition period) and assumes full responsibility for all of the common elements. The question now is whether or not the insulation is considered a common element or part of the window. I agree with you and would argue it is a common element where a building defect has been found. However, the association is likely to argue that they are not under any obligation to pay for a hidden item like this because they had no way of knowing there was an underlying defect and they have no recourse with the developer at this late date. That brings us to the practical element of this repair. I can’t imagine it was very expensive. Do you really want to complicate matters by suing the association for the repair? If the dollars justify a lawsuit and/or you feel strongly on this matter, you should speak to a locally qualified attorney to see if you have a case, or you may bring the matter to Small Claims court depending on the dollar amount. If it was $500 or less to insulate the area around the window, I think I would just pay it and move on. The culprit was the developer back in 1988. He made a mistake and was never held accountable for it during the time when he could have been. All the best!

Developer Delivers New Condo Unit with Clogged Toilet Lines

F.M. from Hartford County writes:

Dear Mister Condo,

I bought my condo in a development which is still under construction. I closed on and occupied the unit in October 2015. I have had ongoing issues with the toilet in my unit (there are 2 bathrooms, the other toilet is in proper working order). The builder/seller has replaced the toilet, had a “camera guy” inspect (contractor of his choosing) and claims there are no visible issues. In the meantime, the toilet still clogs at least once a week and the flush is hardly ever smooth (lots of non-normal sounding water flow). My question is about what my options are other than continuing to work through the builder and the contractors of his choosing, if any, since the condo is still clearly under warranty. I do not want to pay for service/repair that is clearly some form of issue with the plumbing from the beginning. However, I also do not want to void any warranty. The builder is not wanting to take responsibility for this or other issues that have been raised since I moved in (paint and other accommodations). Because the development is still building new units, the condo association is still under his control. This is a new experience for me so I want to be sure I handle it properly.

Mister Condo replies:

F.M., the developer control period of a condominium is an exciting time as construction is ongoing and brand new units like yours appear and the association takes on new life, new common areas, and new amenities. The developer’s primary job is to get the units built and sold at a profit. That often means saving pennies wherever possible. In your case, that may be with the plumbing that is causing an ongoing toilet clogging issue. You are wise not to attempt any repair on your own because you would void any warranty between you and the builder. Unless you are willing to undergo the expense of hiring an attorney to possibly bring suit against the developer for a possible construction defect claim, there is little else you can do. There is no association to complain to and this would not typically fall under the association’s responsibility. You may be able to hire your own plumbing or building inspector to get a second opinion but, even if you do, you will likely need legal guidance to assist if a defect claim is warranted. Speaking with an attorney to determine your rights is my best advice. During that conversation, bring up any other construction defect issues you are experiencing. Good luck!

Crumbling Homes in a Crumbling HOA

mc_horrified

D.M. from outside of Connecticut writes:

Dear Mister Condo,

Thank you for your article. I have a townhome that was built substandard, now have both foundation and structural damages. Old HOA Board was kicked out by new Board. Old HOA had committed fraud and embezzlement. New HOA has moved on. They hired an engineer but will not fix or file charges. I have now put close to $140,000 into home and been declined modifications due to damages. Now disabled, I am about to be homeless. I have reported all this to state and federal authorities since years ago. Answer has been it would take $25,000 up to hire attorney with no guarantee of satisfaction. I have prayed for help and have none. What can be done here for justice? I’m now with other owners with no answers and nowhere to turn. What can be done?

Mister Condo replies:

D.M., I am truly sorry for your problems. While I do not know all of the circumstances surrounding your HOA’s plight, your story is not unique. Purchasing into an HOA is an agreement to enter into a business. In addition to purchasing your living space, you are essentially becoming a stockholder in a corporation. In this case, it would appear to have been a poorly run corporation with many, many issues. I am not sure how many of these issues were apparent when you decided to purchase but now that they have surfaced, you are wise to seek legal help. I would not seek modifications for such a property if it were me because it would appear that between foundation and structural damages you have described you may very likely be putting money into a bad investment. You have mentioned a changing of the guard with regards to the HOA Board. However, you have also indicated that the new HOA Board isn’t doing enough to remedy the situation. You must find competent volunteers from within the ranks of the HOA members to guide the association through the turmoil. It may take lawyers, court cases and a lot of legal expense (passed down to homeowners like yourself) to get through this quagmire but it is necessary if the association is to get back on track. Support interested volunteers for the Board and do not reelect ineffective leaders. If the association does not get back on track, it is very likely to fold under its own weight. Unit owners can only bear so much expense before they become upside down in their homes and bank foreclosures loom. I can’t promise you a rosy future at this HOA but, form what you have told me, it is likely to get worse before it gets better. Good luck!

Static Noise in Condo Caused by Unknown Source

mc_horrified

T.L. from outside of Connecticut writes:

Dear Mister Condo,

I have a static noise coming from one interior wall in my condo living room. When I apply pressure to the wall the noise stops. It is only happening on the last 4 weekends. Any ideas what it could be or how I can get it to stop?

Mister Condo replies:

T.L., I am sorry for your discomfort. I am not a building engineer or electrician but if what you are describing is a static noise, I would think it is in your best interest to have a building expert take a look, listen, and even a measurement to make sure you aren’t experiencing some type of electrical short circuit that could cause a shock or fire hazard. If the source of the noise or static seems to be from within your unit, it may be on you to bring in a building inspector or electrician to give a listen and pinpoint the source. If the source is an association-caused issue (a faulty sump pump, an overloaded electrical line, etc.) then report the problem to the association for remedy. If it is something else (a refrigerator, a treadmill, other appliance that you own) you should take measures to remove the problem. If the static noise is caused by a neighbor’s electronics, report it to the Board and they should see what can be done to remedy the situation. Be careful, don’t get hurt, and seek professional help to solve this mystery. Good luck!

Condo Board Decides to Replace Decks That May Not Need Replacing!

mc_horrified

S.D. from outside of Connecticut writes:

Dear Mister Condo,

The board wants to replace porches that were built 11 years ago according to City Code. I hired an architect and discussed this with the city and they agree that they are not dangerous. Yes, codes have changed but this would be grandfathered in.

I keep asking the board why we are doing this and the only answer is that there are code violations but refuse to be specific. This venture will be paid for by 3 years of special assessments probably in the $50,000 – $70,000 range. They cite the porch contractors as the source of information.

Mister Condo replies:

S.D., taking a proactive approach to safety or unit owners and guests is a Board responsibility. Making this decision may be at the Board’s discretion if that is what your governance documents call for. If the Board’s only source of safety information is coming from the contractor who has a vested interest in being awarded this project, they are not being all that prudent with the association’s funds or, as is the case here, with the association’s lack of funds which will lead to a special assessment. I am not an engineer and offer no advice here on the safety or lack thereof of these decks but it would seem to me that before the Board spends a significant amount of money rebuilding an association asset that may be in perfectly good working order, they should likely have a neutral third party (like you did) offer a professional engineering opinion.

If you follow my column on a regular basis, you probably know what I’m going to say next. The Board members are volunteers from within your community. They are democratically elected by you and the other unit owners within the condo. If they aren’t doing a good job protecting the association’s assets, it may be time to look for new volunteers. Perhaps you would consider serving on the Board, S.D.. It would seem to me that you already understand the concept of stewardship and financial prudence that would benefit your association. Good luck!

Condo Chimney Liner Improperly Installed; Who Pays for Repair?

mc_money

C.G. from outside of Connecticut writes:

Dear Mister Condo,

We had our chimney cleaned recently and the company that did it found that the prefab liner is constructed of an insulated metal chimney pipe, the metal chimney pipe was improperly connected to the fireplace unit and the HOA says is our responsibility to fix it. We asked the company that did the cleaning how could that happen? They said when they were installing it that the person that did it didn’t know what they were doing. Any thoughts? Help please.

Mister Condo replies:

C.G., improperly installed items such as your chimney pipe are a construction defect. The real question is who owns the element. If it is owned by the association, you may have a case for getting them to make the repair. If you own it, the repair may fall upon you. The other question, of course, is expense. If it isn’t terribly expensive, I would suggest you simply pay for the repair and get the problem solved. If it is terribly expensive, you may wish to track down the original builder and see if they will make good on the installation or you may need to sue them to make good on the installation. All of these solutions cost time and money. If the repair can be made for a few hundred dollars or so, I would advise you to just get it done and move on. All the best!

Declarant Leaving New HOA With Unfinished Roads

mc_horrified

M.K. from Middlesex County writes:

Dear Mister Condo,

We have an 8-year old condo community that is under Declarant (D) control who has recently hinted he is ready to relinquish control to an HOA. The problem is that the road paving is not completed with only a deteriorating base present and no top coat. Declarant has repeatedly stated he will not finish road until all lots built on due to fear of construction vehicle damage. I fear he will leave us with a road still needing finishing and no reserves for it. Issue is not addressed in our documents. Any recourse?

Mister Condo replies:

M.K., Declarant control issues are quite different from the vast majority of questions I receive at Ask Mister Condo. While I was fairly certain of the answer, I called in some help from an attorney who specializes in community association laws here in Connecticut. Here’s what the attorney had to say:

“The answer to your question will depend on exactly what the project plans, zoning approvals, and individual purchase contracts say, although usually complete construction of permanent roadways suitable for normal use is considered part of the implied warranties for each unit sale.  Get the association’s attorney involved to keep a close eye on the developer’s progress.  If it looks like the developer will disappear or become insolvent before the roads are completed, the courts may be able to offer remedies.  If a violation or even a potential violation can be proven, it might be possible to secure the money needed to complete the roads with an attachment, functioning like a lien, against the developer’s unsold units.”

Sounds like great advice to me, M.K.! Best of luck to you!