Frequently associations discover deficiencies in design or construction of their common interest development which may necessitate the association filing a lawsuit against the developer and other parties that were involved in the construction of the development to recover damages for construction defects. It is often advantageous and more cost effective for an association to attempt to resolve construction defect issues with the developer through negotiation before filing a lawsuit. In fact, some states require associations to follow prescribed notice and procedural steps before initiating litigation for construction defects.
State statutes typically provide definitions of construction defects in broad terms such as "any deficiencies of the design, specifications, surveying, planning, supervision, or observation of construction or construction of an improvement to, or survey of, real property." Case precedents have also defined what constitutes a construction defect. Common examples are:
Construction defect claims must be pursued within the statute of limitations periods that are prescribed by state statutes. The applicable statute of limitations period depends on various factors such as the nature of the claims that are being asserted and the date on which the property was first sold, and when the facts constituting the basis for the cause of action were first discovered. Sometimes the commencement of the statute of limitations period is delayed when certain construction defects were not readily apparent.
Generally, an association that is established to manage a common interest development has standing to maintain a construction defect action on its own behalf and on behalf of its members. The owners of separate interests in a common interest development have standing to sue for defects involving the separate interests they own.
Construction defect litigation is technical, complex and costly and the association and/or individual members believing they may have claims resulting from construction defects should always consult legal counsel that is experienced in construction defect litigation before initiating construction defect litigation and as soon as the they become aware of the issues.
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