Collective Actions

The role of class action lawsuits in construction is a bit misunderstood.  Class action lawsuits are not used for claims by building Owners against Contractors or Developers for hidden construction defects.

Instead, Owners use “collective” actions in hidden construction defect claims.  Often, the only financially viable way to pursue a Contractor or Developer for hidden construction defects is by joining forces with the other Owners of the same development.  This allows the parties to share the costs of litigation, the largest cost being the experts necessary to determine the nature and extent of the hidden construction defects.  The parties then share the proceeds to jointly hire a competent Building Envelope Architect and Remediation Contractor to redo the building right. 

These are not technically class action lawsuits, although the result is similar.  In a lawsuit against a Contractor or Developer, the Owners are either named as individual Plaintiffs or, if the group has an Association, the Association is named as the Plaintiff.  This is different than a formal class action, where one Plaintiff is named, but represents a class of unknown people who have been effected in a substantially similar way.  

Class actions

Class actions in construction are viable when dealing with a product failure of a specific product.  The LP siding class action is a well-known example, although there are hundreds of examples.  In a class action, the defendant is primarily the manufacturer, not the Contractor. 

If you have a specific product failure where the product was installed per the manufacturer’s requirements and still did not perform, you may have the ingredients of a class action. 

Bungay Law is currently investigating a class action against a roofing product manufacturer.  Certain types of ridge vents allow water to breach the roofing surface and damage the roof sheathing underneath.  These ridge vents also have a fabric on the inside the restricts the airflow, resulting in mold growth in the attic.  If you have been notified by a professional that you have significant mold growth in your attic, contact Bungay Law to discuss being included in the class action.   

Don’t lose your rights

The amount of a time that an Owner has to file a lawsuit varies with the type of claim.  The recent Washington Supreme Court decision of Tadych v. Noble Ridge Construction established that the contractor’s attempt to limit the claims period to one year was not enforceable.  The Court decided that the six-year period in RCW 4.16.310 applied instead.  However, a shorter, three-year period typically applies to implied warranty of habitability claims, which starts to run when the Owner knew or should have known about the problems.  Implied warranty of habitability claims are important because they bring in building requirements that the Contractor likely avoided promising to comply with in the contract. 

Owners are encouraged to investigate their new construction homes early to determine the absence of presence of hidden construction defects.  If your home, likely your largest asset, suffers from hidden construction defects, it is better to know before your rights against the Contractor expire.  Otherwise, you will be stuck with the whole five or six figure repair bill. 

Construction Defects in Washington

Property owners in Washington trust and expect that their contractors will build a safe, weatherproof, and reliable building. However, many construction projects result in hidden defective and unsafe workmanship. These hidden defects can lead to structural failure, water damage to the property, and even injury to the inhabitants.

What is a Construction Defect?

A construction defect is any physical condition that reduces the value of a structure or endangers the health or safety of its occupants, that is a result of a flaw in design, materials, or workmanship, and that is not the result of normal aging or wear and tear (Justia.com).

Types of Construction Defects

Patent Defect

These are typically identified during routine inspections of the structure and are clearly visible to the naked eye.

Latent Defect

Often hidden or concealed from plain view, latent defects are not easily observed and may not be uncovered until long after the project is complete.

Construction Defect Categories

Workmanship Defects

Improper concrete finishing, weatherproofing systems, flashing, and soil compaction are examples of workmanship defects. They are the result of a contractor’s failure to properly follow best industry practices, the manufacturer’s instructions, or other construction requirements. Issues such as wood rot, water seepage, cracks in foundations or walls, electrical issues, and mechanical errors can arise.

Material Defects

The use of inferior building materials can lead to significant issues, such as deteriorating flashing, leaking windows, and cracking concrete. These materials may fail to perform or function, even if they are installed correctly. Sometimes, material defects are not noticed until after they have been installed, including delaminated roof shingles and leaky window seals.

Design Defects

If an architect or engineers fails to produce an accurate set of construction documents, then design defects can occur. Some of the common problems that result from these errors include inadequate structural support and water penetration.

The Most Common Construction Defects

• Mold
• Water issues
• Electrical and heating systems issues
• Landscaping and soil issues
• Faulty drainage
• Foundation, floor, wall, and roof cracks
• Dry rot
• Structural failure
• Plumbing failure

Hidden Damages

As mentioned above, hidden damages or “latent defects” may not be detected until after a project is completed and the structure/functions are in use. One common example of this type of damage in Washington is when the building is not constructed in a weather tight manner, allowing wind-driven rain to saturate the moisture-sensitive wood framing beneath the siding, causing it to rot.

Unfortunately, purchase inspections cannot identify these construction defects because they are covered by the siding, and most purchase inspectors are not qualified to identify these kinds of issues. Further, the building may be leaking, but the signs may not appear until the damage is catastrophic. The average cost to remediate the building envelope often exceeds $200,000 per unit.

The only way to identify the presence of defects before extensive damage occurs is through a visual inspection by an experienced forensic building envelope engineer, followed by an invasive investigation, if necessary.

Washington Construction Defect Law

Who Can File a Construction Defect Claim?

In Washington, a homeowner or larger group (such as a Homeowner’s Association) may bring a construction defect action against a construction professional. This includes contractors hired for renovations or for the initial construction of the residence.

Right to Repair

Before a claim can be filed, there is a 45-day “holding period” to allow the construction professional the opportunity the “right to repair.” This means that the contractor must first be notified of the issue and have the change to repair the defect or compensate the homeowner for the damages.

Statute of Limitations 

The amount of a time that an Owner has to file a lawsuit varies with the type of claim.  The recent Washington Supreme Court decision of Tadych v. Noble Ridge Construction established that the contractor’s attempt to limit the claims period to one year was not enforceable.  The Court decided that the six-year period in RCW 4.16.310 applied instead.  However, a shorter, three-year period typically applies to implied warranty of habitability claims, which starts to run when the Owner knew or should have known about the problems.  Implied warranty of habitability claims are important because they bring in building requirements that the Contractor likely avoided promising to comply with in the contract. 

Owners are encouraged to investigate their new construction homes early to determine the absence of presence of hidden construction defects.  If your home, likely your largest asset, suffers from hidden construction defects, it is better to know before your rights against the Contractor expire.  Otherwise, you will be stuck with the whole five or six figure repair bill. 

What to Do in the Event of a Construction Defect

Hire an Attorney

The team at Bungay Law has extensive experience recovering money to fix buildings. Do not hesitate to reach out to us today.

Get an Inspection

As soon as you notice defects in your structure, retain a qualified forensic construction consultant to determine the nature and extent of the hidden construction defects. 

Condo Claims

Washington’s single most consumer-friendly piece of legislation is the Washington Condominium Act.  The Condo Act says, essentially, that the anything the Developer builds must be built correctly.  Unfortunately, it is difficult to build every part of a building properly under the best of conditions and under the incentive structure for Developers, every condo project has a significant likelihood of hidden construction defects that cause property damage, increase maintenance costs, and reduce the useful life of the building.  

As the saying goes, there are three types of condominium associations in Washington, those that have been through litigation, those that are in litigation, and those that will go through litigation.  

The Condo Act establishes a high standard for performance.  Unfortunately, a Developer is not generally incentivized to meet that standard.  The condo units will sell for a market price that is independent of the cost of construction.  Therefore, every dollar that the Developer saves building the building is a dollar that goes in the Developer’s pocket.  Developers build projects through single-asset entities that are dissolved as soon as possible after the last unit is sold.  Some Developers purchase insurance to cover possible claims, some do not. 

Unfortunately for Owners, insurance does not cover bad work.  With a Swiss cheese approach to insurance coverage and exclusions, insurance typically only covers damage to other parts of the building that a Contractor or Subcontractor’s work caused, referred to as “consequential damage.”  Identifying consequential damage is the single most important task in recovering money to fix the building.  Identifying consequential damage is expensive because a team of forensic building envelope specialists and a competent contractor have to remove significant portions of the exterior of the building to document the conditions under the exterior cladding and roofing. 

Fortunately, the Condo Association is well-positioned to participate in a collective action, where all the owners, through the Association, share the costs and proceeds of litigation.  In fact, a Condo Association Board has a duty to preserve the condition of the buildings and pursue any legal actions available to recover funds to remediate the buildings. 

The Condo Act has a strict deadline of four years to file a claim against the Developer.  However, that four years is measured from several possible starting points.  It is best to consult with an attorney as soon as possible to ensure that the deadline is not missed.