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Tips for Dealing with a Construction Defect Claim in a Condominium

By Alexander Barthet

Typically, the condominium purchaser would look to the common law warranty of fitness and merchantability for relief on a defect claim, specifically alleging as grounds that the unit does not meet building and zoning codes or that the construction was not completed in a workmanlike fashion, that the plans and specifications were not fit for their intended use or simply that the premises are unfit and uninhabitable. However, the statutory implied warranty of fitness and merchantability, which runs from the developer, contractor, and subcontractors to the purchaser of the unit, can be one of the most powerful legal tools.

The choice between common law and statutory warranties is not mutually exclusive. The benefits and burdens do stand in contrast though, in that the statutory warranty runs for a finite period from an objective date in time while the common law warranty does not. The statutory warranty cannot be waived or disclaimed by contract while the common law warranty may be. The statutory warranty runs from the developer, the contractor and all subcontractors and suppliers while the common law warranty extends only from the developer. Furthermore, unlike the common law warranty, the statutory warranty is not restricted to first purchasers but inures to the benefit of each owner and his or her successors.

It should be noted that, in a “cold” real estate market, developers may attempt to obtain an advantage by providing specific warranties, thus creating a selling point and greater incentive for their prospects. Under such circumstances, the developer may extend or broaden the scope of its common law and statutory warranties. These express warranties are binding on the developer and create a clear route for unit purchasers seeking to capitalize on the developer’s greater exposure to liability when construction elements go awry.

Negligence

In addition to the common law and statutory warranties, there are other alternative causes of action available to condominium unit purchasers who find themselves struggling with property defects. One is negligence. Under this theory, even remote purchasers have standing to sue the original contractor for any failure to meet the standard of reasonable care to safeguard those who may foreseeably be placed in peril. Although a greater degree of proof is required to prevail in a negligence action in contrast to a breach of warranty claim, negligence claims have distinct advantages for the unit purchaser. In such actions, the statute of limitations is usually longer and more flexible, allowing

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