Condominium Disputes and Construction Defects

Condominium Disputes and Construction Defects

Condominium Disputes and Construction Defects

Condominium Disputes and Construction Defects involving Water Infiltration and Leaks

Condominium ownership allows for a unique opportunity in that the unit owners have exclusive rights to their individual condominium units and a collective interest to use and enjoy the whole property, within the limitations set forth by the condo bylaws. This sometimes-complex ownership arrangement is ripe for similarly complex disputes to arise.

The experienced condominium lawyers at Calabrese Law Associates in Boston have a proven record of helping unit owners and condominium associations alike resolve disputes and successfully litigate those claims when necessary.

Rise in Condominium Defects

Construction practices in the mid-2000s resulted in an increase in construction defect claims across the country. There was a push to build faster, with a short supply of skilled contractors. New construction products and varying installation methods also contributed to the number of condo defects we see today.

Condominium Disputes and Construction Defects

Liability for construction defects exists in layers. Construction workers must be properly trained and supervised, otherwise the quality of their work can be called into question. Construction workers must also follow manufacturers’ installation specifications and guidelines when using various building products. A product that is improperly installed can create issues such as water leaks. The improper installation of construction products and materials, however, places the liability on the installer and usually will not cause the manufacturer of the construction product to be held liable for damages.

The final layer of liability rests on the property owner to use and maintain the premises in a reasonable manner. For example, wet and mold-filled drywall may not be considered a construction defect if the owner did not take precautions to keep the water in the shower and instead let it run onto the adjacent wall.

Modern condominium building design and construction includes more details such as more corners, railings and intersecting roof lines. These features make them particularly susceptible to water intrusion from the outside. Construction defects that allow water to penetrate are more likely in these types of building. Also, maintenance is more difficult and remediation efforts like mold removal are expensive.

A contractor who is focused on developing multiple projects might see an opportunity to cut costs in construction. Ultimately, the savings to the contractor can mean increased costs to unit owners and condo associations. It is necessary for owners to assign liability and seek damages in order to repair and maintain a property that was not properly construction to be water-tight and able to withstand the four seasons we experience in Boston and throughout Massachusetts.

Construction Defects in a Condominium Unit

Condominium Disputes and Construction DefectsAs a general rule, condo unit owners are responsible for all repairs inside their condominium unit. However, when problems within the condo unit are created by conditions in a common area (for example, a roof leak creates damage inside a condo unit) that is an issue condominium associations are responsible for fixing and reimbursing the unit owner for costs they incurred to fix the issues inside their unit. Especially when the unit is relatively new, construction defects can account for a majority of problems discovered. If there is a potential issue, it’s a good idea to investigate the problem immediately.

When a construction defect is discovered, the first step is to investigate and document the extent of the defect. The discovery of a water leak or defective drywall finishing could be indicative of a larger issue. It may be necessary to call in a plumber or a professional licensed contractor to render an opinion on the problem. If the problem is serious, like an active water leak, the unit owner should have it corrected immediately to mitigate any further damage.

Contacting the condo association is an important early step in this process. In a development with shared walls and common chases, a construction defect might affect more than one unit. The condo association would want to be aware of the problem, and they should know about other similar or related problems that have been reported.

Condominium Disputes and Construction DefectsIf the construction defect is part of a larger problem affecting more than one unit owner, those owners should coordinate with the condo association to find a remedy. All unit owners affected will have to share information to determine the nature and extent of the construction defect, and they will want to coordinate, through the condo association, to make repairs.

Individual condo unit owners have rights which may be strengthened when they join together with other owners who share a common problem. Consulting with the construction defect lawyers at Boston’s Calabrese Law Associates can help condominium unit owners understand their rights and how they should proceed. A single unit owner may bring a lawsuit against the contractor for a construction defect, or the unit owners affected may join forces in bringing a lawsuit.

The construction defect attorneys at Calabrese Law Associates can help the harmed parties determine which contractor might be at fault, and help them work seek to negotiate a favorable settlement without going to court.

Construction Defects that Cause Water Leaks in Common Areas

A “common area” is an area of the condominium property that is owned by all condo unit owners as a collective and is controlled/managed exclusively by the condominium association. Areas that are generally considered a “common area” include onsite clubhouses, swimming pools, golf courses, workout facilities, parking lots, the roof, piping, wiring, and exterior surfaces of the condo buildings. When there is a water leak or other construction defect in a common area (for example, a roof leak) it is the reasonability of the condominium association to make the necessary repairs. Condo unit owners can seek monies from the condo association when their unit is damaged by a water leak coming from a common area – the classic example is a roof leak causes damage to the interior of the top-floor condo unit.

When you notice a construction defect in a common area it is important to notify the other unit owners and to solidify cooperation among the owners effected by the construction defect. The group of effected condo unit owners then can approach the condo association together to address the construction problems.

Who is the Proper Party to File Suit – the Condo Unit Owner or the Condo Association?

Condominium Disputes and Construction DefectsA common reason for a unit owner to bring a lawsuit against a contractor or developer for a construction defect is breach of contract. As stated below in greater detail, a unit owner can seek damages for a breach of contract, while the condo association does not have any standing in this area. Conversely, negligent construction is an area where the condo association has exclusive authority to file a claim. An individual unit owner who wishes to seek damages from a contractor for negligent construction must do so through the condo association.

Breach of Contract Litigation: Unit Owner vs. Contractor

When the claim against a contractor or developer for defective construction is based on a breach of contract between the condo unit owner and the contractor/developer, only the condo unit owner can file suit for such a claim:

The “[p]urchase of a condominium unit does not compel a purchaser to relinquish to the condominium association all actions against the developer for failure to deliver what was promised. Nothing in G.L. c. 183A divests the purchaser of a condominium unit of the right to sue in breach of contract. Indeed, a breach of contract claim has an “individual character” and is the sort of action that we have ruled may be brought or settled only by an individual unit owner. See Golub v. Milpo, 402 Mass. 397, 402, 522 N.E.2d 954 (1988). A developer may not make identical representations to or agreements with all purchasers; to one, a concierge and swimming pool may be promised, while to another, no such promises may be made. Consequently, the damages will vary from one purchaser to another depending on the nature of the representations made and the sale price to which each purchaser agreed. The injury claimed is not so much in the construction defects themselves, but in the purchaser’s nonreceipt of the *216 benefit of her bargain. This contractually based injury is entirely distinct from the torts for which the unit owners’ association may recover. Indeed, our conclusion that the breach of contract claims are individual in nature and cannot be pursued or settled by the condominium association follows directly from our decision in Golub, supra. There, we permitted a unit owner complaining of a leaky roof to proceed with claims for breach of contract and breach of warranty, despite the fact that the condominium association had executed an agreement releasing the developer from claims relating to the roof, which was a common area. The developer had expressly warranted to the plaintiff in the purchase and sale agreement that the roof would be “free of leakage.” Id. at 398, 522 N.E.2d 954. Moreover, courts in other jurisdictions have recognized that breach of contract claims are individual and are separable from collective claims, such as those for negligent construction, that the condominium association alone has standing to pursue.” Cigal v. Leader Dev. Corp., 408 Mass. 212, 216, 557 N.E.2d 1119 – 1122 (1990).

To summarize the Massachusetts law cited above:

  1. when purchasing a condo unit, the owner does not give up certain rights to the condo association. Among them is the right to bring an action against the contractor for failure to deliver what was promised.
  2. Breach of contract claims are considered an “individual action” that can only be brought by a unit owner, and not a condo association. The law recognizes that contractors may make different representations to each unit owner and, therefore, the damages incurred would be unique to each unit owner.
  3. An individual unit owner has unique claims and damages under breach of contract, separate and apart from those of the condo association. In one such case, a condo association released the contractor from liabilities regarding a roof that an individual unit owner was then able to recover damages for. The contractor’s settlement with the condo association was held as a separate transaction from the breach of contract between the unit owner and the contractor.

Negligence Claim Litigation: Condo Association vs. Contractor

Condominium Disputes and Construction DefectsOnly the condo association, the unit owners, has the authority to file suit against a contractor or developer for negligent construction of a condo building:

“The statute plainly contemplates that the association is to act as the exclusive representative of the unit owners in litigation for negligent construction. In addition to vesting the association with the power to conduct litigation concerning *218 the common areas, it provides that “[t]he expenses incurred in and proceeds accruing from the exercise of the powers [to conduct litigation] shall be common expenses and common profits.” G.L. c. 183A, § 10(b ) (1988 ed.). Piecemeal litigation by individual unit owners would frustrate the statutory scheme, in which the association acts as the representative of all owners in common. Thus, we conclude that in litigation for negligent construction of common areas, the condominium statute requires that the unit owners act by and through the condominium association, which represents all the unit owners.” Cigal v. Leader Dev. Corp., 408 Mass. 212, 218, 557 N.E.2d 1119 – 1123 (1990).

Therefore, the Massachusetts law cited can be summarized as follows:

  1. The condo association is responsible for common expenses among unit owners for maintenance and repair of property they hold in common. This responsibility extends to fairly distributing common proceeds among unit owners, as well. These powers make the association well-suited to seeking damages for negligent construction on behalf of all owners.
  2. In negligent construction actions, the condo association acts on behalf of all owners. It would be difficult for the association to champion the unit owners’ interests were they to bring individual lawsuits against the contractor for negligent construction.
  3. The condo association has the sole power to bring a lawsuit against a contractor regarding common areas of the development. Through ownership, the unit owners relinquish their power over and responsibility for common areas to the association. The condo association maintains these areas on behalf of the owners and, therefore, retains the right to sue the contractor for construction defects in same. Any proceeds from a lawsuit would then be distributed equitably to the unit owners.

Furthermore, the by-laws of the condo association may stipulate a specific procedure for disputes with third-parties. The association is required to follow the by-laws with respect to giving notice, mediation, and/or arbitration. If the by-laws are not specific on this, the condo association can proceed according to Massachusetts law.

Disputes Between Condo Unit Owners and Condo Association

Condominium Disputes and Construction DefectsCondo unit owners often find themselves in disputes with their condo association. While the condo association is required to act in the best interests of the owners, sometimes the condo association fails do so and must be compelled to do so.

An example of this would be if the condo association fails to follow the by-laws with respect to property maintenance. A defect in the roof — a common area of the condo property— might cause water damage to a single unit. If the condo association is trying to keep their fees down by not repairing the roof immediately, individual unit owners could suffer damages.

The balance of power between a unit owner and the condo association usually lies with the association. However, a collective of unit owners can have sway over the association. If it is possible to inform other unit owners that the condo association’s conduct is affecting their units, such communication among condo unit owners can be the first step in reaching a resolution.

Unit owner have the right to file a lawsuit against their condo association when the condo association violations Massachusetts law. However, as with any legal dispute, negotiating a settlement is usually the best resolution to these matter – better than going to court.

Condominium Disputes and Construction DefectsConsulting with the experienced condominium dispute attorneys at Calabrese Law Associates when condo dispute arises can prove important and very helpful for resolving these types of disputes. Knowing your legal rights as a unit owner when dealing with condo association problems and having a professional legal assessment of the situation, is likely to bring the best outcome.

Duty to Pay Condo Fees and Condo Association’s Power to Place Lien on Unit for Unpaid Condo Fees

Under Massachusetts condo laws a unit owner is required to pay a portion of all common expenses as assessed by the condo association. There are a couple different formulas the association can use to determine the amount of money owed by each unit owner. Sometimes, the costs are divided equally and sometimes they are apportioned based on relative size of each unit. The method for determining the amount of this debt should be stipulated in the master deed to the property.

Condominium Disputes and Construction DefectsThe Massachusetts condo laws further state that the condo association can seek to place lien on the unit owner’s property for unpaid condo fees and assessments. This means any late payments can result in a property lien by the condo association on the unit. In addition, the condo association has the power to increase the assessment owed by a unit owner by any amount of expense incurred by the condo association as a direct result of the unit owner’s failure to pay.

The condo association also has the power to assess fees for items that would affect the collective operating costs. In the case of a property where water and utilities are not metered separately for each unit, the cost of installing a water-saving toilet or low-flow shower head can be assessed back to the unit owner. In a building where utilities are metered separately, the condo association can charge the unit owner for his portion of the usage, if it follows specific procedures of assessment. The condo association has broad powers to assess fees to unit owners. Since a condo association’s fee can become a lien on the condo unit if the condo fees are not paid, withholding payments from the condo association is not a successful means of changing their position or course of action on any condo dispute issue.

Massachusetts law makes it easy for condo associations to place a lien on a condo unit and to “perfect” the lien through court action to collect on the lien. So long as the condo association follows the proper condo lien procedure, the condo association lien on the condo unit has priority over all other liens, including a mortgage on the property. Condo association liens also take priority over all other non-municipal creditors.

In the case of a maintenance or repair dispute, some other means of resolution are required. While the condo association has broad powers to assess and collect fees, it also has a responsibility to maintain the property for the enjoyment of all owners. Condo by-laws stipulate a procedure for removing board members or challenging the decisions of the association.

In the event of a lien notice goes to the mortgage lender, it is likely the lender will pay the outstanding fees and add the amount to the mortgage principal. This helps protect the value of the property by ensuring the condo association has the funds necessary to continue to maintain the property. It also protects the lender’s interest by insuring they are the first mortgage i.e. the first creditor to be paid if the condo unit falls into foreclosure or if there is a sale of the unit.

Important to note is that if the condo association places a lien on the condo unit, the condo association can foreclose on the unit to recover its fees. In the case of foreclosure, the condo association would get the money it was owed out of the proceeds of the sale of the condo before most other debts are repaid.

Maintenance and Repair Disputes

Most of the rights and responsibilities of unit owners and condo associations with respect to property maintenance are contained in the master deed and in the condo by-laws. In general, the association is required to maintain the property for the enjoyment of all unit owners without unreasonably interfering with the unit owner’s enjoyment of his own unit.

A unit owner is prohibited from doing any repairs or maintenance outside of his/her unit or repairs on their unit that might impair the safety of or interfere with the condo units of other owners at the property.

The resolution of a dispute between a unit owner and the condo association over the repair and maintenance of the property might involve the unit owner compelling the association to follow the guidelines set forth in the by-laws for maintenance and repair restrictions and requirements. Alternately, a unit owner who is not satisfied with the association’s actions with regard to building maintenance and repair may need to petition the board to amend the by-laws.

Consulting with the condo dispute lawyers at Calabrese Law Associates in Downtown Boston, MA is a good idea in the case of maintenance and repair disputes. Assigning liability and blame between a condo association and a unit owner can be difficult because of their overlapping interests. Our firm’s condominium attorneys are well-versed in Massachusetts condo laws. Often, condo disputes can be resolved without litigation, which is ultimately less costly for both parties.

Learn More About Condo Disputes and Calabrese Law Associates

When the potential for a condominium dispute arises in the Greater Boston area or anywhere in Massachusetts, contact Calabrese Law Associates. The firm’s experienced attorneys can answer questions about condominium disputes, construction defect actions and other matters pertaining to condominium ownership. The firm’s condo and real estate lawyers will accurately assess your situation, protect your legal interest to the best extent possible under the law, and develop a strategy to move forward, whether that means settlement negotiations or litigation.

Condominium Disputes and Construction DefectsThrough efficient and effective work on client matters, Calabrese Law Associates provides industry-leading representation for a reasonable fee. Matters of property disputes can be especially uncomfortable, especially when a domicile is involved. The condominium dispute attorneys at Calabrese Law Associates in Boston strive to resolve disputes efficiently and relieve discomfort as quickly as possible while protecting the rights of their clients.

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*This publication and its contents are not to be construed as legal advice nor a recommendation to you as to how to proceed. Please consult with a local licensed attorney directly before taking any action that could have legal consequences. This publication and its content do not create an attorney-client relationship and are being provided for general informational purposes only.