Y.L. from Long Island, New York writes:
Dear Mister Condo,
The developer hasn’t repaired leaks in individual units that resulted from an improperly constructed roof of our new condo building within the 6-year warranty period. He has now transferred the remaining ownership of his unit to his new company and he says the former company has no assets, so we will be unable to get any money if we sue. Can we sue his new company?
Mister Condo replies:
Y.L., dealing with developers during the developer transition period is challenging to say the least. When they make legal moves like dissolving corporations and moving assets, they can really put the screws to the new condo or HOA. The best advice I have for you is that the new association needs its own attorney. Too many times, I see new associations make the mistake of thinking the attorney who represented the association during the period of time when the developer owned the common grounds and buildings assume that that attorney was representing their best interests. That attorney was working for the developer. You need your own attorney to represent only the interests of the association. This is critical because, as you see, it isn’t always cut and dry. Your new association could be paying off construction defects for years to come without proper representation right now. There are plenty of law firms that specialize in the representation of associations during the developer transition period as well as construction defect representation. Check with your local chapter of CAI and find the right expert for your association. Good luck!
1 thought on “Developer Closes Corporation After Building Defective Condos”
The board needs to discuss with their attorney and assess the projected costs for ongoing and future repairs of building defects, the cost of litigation, and the likely hood on not only winning a lawsuit but actually recovering damages, realizing that lawsuits can drag on for extended periods of time.