Mann Report: Management - November & December 2016
By: Carol A. Sigmond
Construction defects are the bane of existence for all property owners, including boards of directors/managers of cooperative apartment buildings and condominiums. Defects may arise at the outset in a new building or in renovations or maintenance work. Regardless, there are steps that should be taken in the event there are construction defects.
Insurance coverage is confusing in construction defects. In New York, there is no coverage for the defect itself, but there may be coverage for losses arising out of the defect. For example, if there is a sidewalk replacement and the sidewalk is not level, the insurance company will not pay to level the sidewalk, but it will defend and respond to a claim by someone injured as a result of the uneven sidewalk. George A. Fuller Co, v. United States, 200 A.D. 2d 255 (1st Dept. 1994) Accordingly, you should give notice of the defect to your carrier, solely as a precaution in the event that someone is injured or there is property damage as a result.
If you suspect a construction defect, then a prompt and thorough investigation is warranted. There are different ways to organize an investigation. You may retain a forensic architect or engineer to lead the investigation; however, if you anticipate suing the responsible party, you may wish to have your attorneys organize the investigation, preserve the evidence and report all findings under the attorney client privilege.
Evidence preservation and the need to locate the cause of problem may be in conflict. New York is developing strict rules respecting spoliation of evidence. Essentially, if you spoliate evidence so as to deny the opposing party the opportunity to view the condition complained of, there may later be evidentiary bars respecting proof of the condition. Therefore, in connection with any investigation, you should allow the potential litigation defendants to observe the investigation, which means watch tests—not have the results of tests—and you should allow them to photograph and conduct nondestructive testing. Photograph and video tape all conditions before, during and after testing. Preserve all such evidence and any physical evidence as directed by the design professionals. See Farella v. City of New York, 2007 WL 193867 (EDNY 2007).
Although the investigators in a construction defect case are generally design professionals, the issues related to spoliation of the defect condition may weigh in favor of having a lawyer actively involved in the investigation.
There are a number of techniques that design professionals use to locate defects: Ground penetrating radar (GPR), ultra sound, echo, seismic, impact, physical probes, water tests, and dye rests are among the most common. Many of these methods such as GPR, ultra sound, echo, seismic and impact are considered nondestructive, or semidestructive, but they have limitations. These tests will reveal the thickness of concrete and may show reinforcing steel locations, Similarly, tomography tests may be used to test a façade for moisture. Physical probes are destructive, but generally revealing. Water and dye tests are typically used to locate leaks, particularly roof, facade, and plumbing leaks. Nondestructive testing is certainly the way of the future, particularly for steel and concrete in roads and bridges. Nondestructive testing for buildings will be improving as well over time.
At the current state of building investigation technology and the statutory obligations on boards to maintain building facades and major systems, courts are not likely to penalize you for using destructive testing to locate a defect if you are making a complete record of the evidence while determining the cause of a problem. If you have just installed a new roof and it is leaking, a court is not going to expect you to live with a leaking roof, only to document fully any investigation. However, you will be expected to afford access to the defect to the party or parties to be charged, for inspection and testing before making permanent repairs.
This column presents a general discussion. This column is not intended to provide legal advice. You should consult your attorney for specific legal advice.
This article was originally published by Mann Report: Management. You can access the article on their website.