Top Five Ways to Mitigate the Risks of Construction Defects

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By Rebecca Stone

Several states put construction defect laws on the books in the 1990s and 2000s in response to increasing complaints from new-home owners about shoddy workmanship, defective materials, and other flaws. While these laws serve to protect homeowners with legitimate claims, in some cases they also put a damper on new home and condominium building and created a deficit of developers willing to invest in them.

Of course, there is no way to completely avoid risk of legal action, but here are the top five ways developers and design firms can head off potential stumbling blocks and move their projects forward with confidence.

  • Take a creative approach to insurance issues. Crafting the appropriate project insurance very early in the process is key to protecting the team in the future. Project specific policies are an option many developers are utilizing now.  Language can also be added to HOA covenants to ensure that insurance is maintained following occupancy.
  • Use an envelope consultant. These are firms that specialize in waterproofing and detailing the building to perform at a high level under extreme conditions. They offer valuable expertise in both the design and construction phases, and their guidance can help protect the team and the building from future defect claims.  This consultant should conduct regular walk-throughs and generate quality control reports throughout the process – documentation which may be needed later to demonstrate adherence to high standards.  
  • Be extremely familiar with the Americans with Disabilities Act (ADA) codes, Federal Fair Housing Act (FFHA) and American National Standards Institute (ANSI) requirements. Ensuring that the drawings, details and finishes meet or exceed current codes early in the process is very important. The general contractor should have the design team or a code consultant review related documents and construction implementation throughout in order to assure compliance with design intent. This can mitigate exposure to potential legal issues later.
  • Early and ongoing collaboration helps avoid future liability. The entire consultant team and general contractor should work together closely from the start of the design process, if possible.  As soon as a general contractor is selected, incorporate them into team meetings, consider them a partner in the design effort and collaborate with them on all decisions. Developers and design firm staff should also stay involved in meetings and walk-throughs over the course of construction.  This will assist the team in tracking the project from the earliest stages, keep costs down and limit future liability.
  • Utilize the Architect of Record (AOR) and design team during the warranty phase.  The contract between the AOR/designer and the client should have a warranty phase in it.  Utilize their support and counsel during that time (and the 7-10 years following) to help with warranty issues and communication about building maintenance to Homeowner’s Associations. This can be a key way to resolve minor problems quickly so that larger complaints don’t arise.

Experience has demonstrated that staying collaborative and detail-oriented can have a huge impact on successfully navigating and protecting against potential construction defects claims.  It also frees up the design team to do our best work, creating spaces that consumers will appreciate and enjoy for years to come.

Rebecca Stone designs a wide variety of dynamic environments that enrich their communities and set the highest of standards. Her involvement with hundreds of projects over the span of her career has given her an inherent understanding of the best ways to create a sense of place — whether in the mountains, by the sea, or in an urban setting. She also sits on several Resort Design Review Boards, the Urban Land Institute (ULI) Resort, Tourism & Leisure Product Council and is a ULI Partnership Forum Mentor.  

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