Nothing about building a new property is simple, and the bigger the project, the more there is usually to think about. The architect, engineers, general contractor, subcontractors, project manager, site supervisors and more, all working with the property owner or developer, who generally work with the lender. Potential buyers, tenants, suppliers and others are in play as well.
A major issue all of these individuals and entities face is the prospect of substandard design or construction that lead to defects, which can be exponentially more expensive to remediate than the original construction.
What to watch for
Construction defect claims can cover a wide range of issues that could go on for pages, for some of the more common, general defects include water intrusion (which can also sometimes lead to toxic mold), foundational issues (that can lead to slanted or uneven floors, windows unable to raise and lower, doors unable to open and close properly, and internal and external cracking), drainage problems (which can lead to water intrusion, hard to detect underground leaks, and geotechnical instability), mechanical issues such as a malfunctioning HVAC system, and electrical issues (which can lead to a host of daily problems and be a fire hazard.
Actual construction defect claims in California may contain allegations concerning negligence, breach of warranty, breach of contract, fraud or strict liability. The best way to avoid construction defect claims is to responsibly execute whatever portion of the project you’ve been hired to perform. Moreover, by carefully documenting issues that arise that affect or may have an impact on your project responsibilities, and in some cases bringing those issues to the attention of the project manager and/or architect, will help you and your attorney down the road defend any claim that your work was the cause of a defect claim.
Contracts, Warranties & Insurance
Construction defect cases are typically complicated and expert-driven. There are many parties to consider, as well as local and state laws that govern any given situation. The more detail you have in your job file, combined with a solid contract that provides you maximum protection, can be hugely beneficial to your attorney in resolving the claim. In addition, you should always maintain a good insurance policy either for a particular project or through a commercial general liability policy, or both, to add financial protection to help pay your lawyer and possibly an adverse claim.
There are warranties outlined by California law that factor in, as well as pre-litigation procedures that may entitle home-improvement contractors to the opportunity to address alleged defects before the owner is permitted to file a lawsuit.
The reputation, and in some cases the survival, of your business may be at stake if a significant defect claim is alleged concerning your work. It’s important to do get your attorney involved in the matter as soon as there’s a hint of trouble, rather than try to deal with it yourself which, in the end, could end up being much more costly.