By Alex Barthet
After a developer and a contractor had completed construction of a condominium building, they were asked back by the association to perform some warranty repairs to the exterior cladding. The building was experiencing water intrusion through the stucco exterior. The developer and contractor signed an agreement with the association which included a statement that once these repairs were completed, the association would make no further claim and release both the developer and the contractor.
Following a hurricane the next year and more water damage, the association submitted an insurance claim. When the claim wasn’t being immediately paid, the association sued the insurance company. In turn, the insurance company sued the developer and contractor for defective workmanship on the exterior cladding.
But the insurance company lost this battle. The developer and contractor produced the agreement and lien release they had gotten from the association, and the court agreed with them. The release they had obtained relieved both of them of further liability.
As any construction lawyer would advise you, get that lien release whenever you settle a claim. It will come in handy if someone pops up down the road making a claim on the same issue you already settled.