Building Defenses Against Builder Negligence

Picture this…

You’re a few years into your very first experience as a condo owner. You did your homework and bought a brand-new condo from a reputable builder. You scrimped and saved and were finally able to come up with that down payment, all in the name of being able to settle down comfortably in a place to call your own.

Only now, you’ve started to notice things. Leaky windows. Water coming in from the roof and walls. Defective, unsafe balconies. Shoddy workmanship all around. You reach out to contact that “reputable” builder, only to find out that they were just the name printed on the marketing materials. In fact, they’d created a new company to build your home…but that company doesn’t exist anymore, meaning there’s no one to be held accountable for the negligent construction and no assets to collect damages from. So, the condo board does the only thing it can do and issues a massive special assessment to repair the building. A settlement might come through, but in the meantime, your condo board and lawyer are telling you that the only way you have a shot at making up those funds is if you keep things quiet and under wraps.

And all the while, you’re on the hook for that special assessment to the tune of $20,000.

The Importance of Condo Corporation Insurance

While everything in our intro above might sound like something out of a homeowner horror story, it all happened right here, in Calgary – just this past February, in fact. Further, this story is far from being just a one-off case, either. Certainly, these circumstances are extreme, but far too often in our line of work do we come across condo boards that are left holding the bill for construction work that’s mediocre at best and negligent at worst.

Whether you’re in a brand-new building or one that’s a few years old, the possibility is very real that you could find yourself in a similar situation: staring down a massively-expensive repair bill that’s all the result of rushed, careless workmanship. That said, while we’re certainly not lawyers and while this blog DEFINITELY does not quality as any sort of legal counsel or advice, we have some tips to help you out if you find yourself facing this frustrating situation.

Brand-New Owners of a Brand-New Condo Building

If you’re part of a new condo community taking control of a building from the managing developer, there is one very important step to take to help protect yourself from trouble.

During the transition, be sure to seek out a third-party to run an independent study of the complex. Because we’re talking about a brand-new building, this could either involve simply having the engineering documents vetted, or going with a full-blown technical audit. You’ll want to be starting in your new building with a clean slate, so take the opportunity to start poking around under the metaphorical hood right away and look for any major building envelope issues or structural deficiencies.

We really want to stress here how important it is to handle this sort of business before the transition is completed, because once those documents are signed, all bets are off. Even if you’re able to prove developer negligence for damages that occur just a few years after purchase, chances are your board will still come out at a loss due to all the legal fees that quickly start piling up around cases like this – so, be smart, and go in with your eyes wide open.

What About Older Buildings?

Here at Catalyst, we like to think we’re straight shooters. Beating around the bush isn’t really our style. That’s why when it comes to established condo boards who discover construction-related deficiencies in an older building, we’ll be upfront with you and say that the outlook isn’t great for a happy, fairy tale-type ending. If you didn’t do a proper vetting of the building or have those engineering documents looked through initially, chances are you’ve caught this problem when it’s already too late. Your first instinct might be to try and reclaim the associated repair costs through a lawsuit, but this is really just throwing good money after bad, as the chances of recovering money from a developer on deficiencies within a brand-new building are tough enough, never mind when that building’s aged even just a handful of years. At that point, the question becomes: would you rather toss your money at a legal case, or start putting funds towards the repairs that need handling?

If you’re feeling a sense of injustice at this advice, there is something you can do: call that developer out. Get on the news, get on social media, get on a soapbox on the corner and let everyone know what you’re dealing with and which homebuilder is responsible. Be prepared to potentially get some pushback from condo board members claiming you’re ruining the reputation of the building or some such nonsense, but stand fast in the knowledge that the damage is already done – the deficiencies are there, the special assessments are happening, and you seeking to hold the developer accountable in the court of public opinion is doing nothing to cause any more harm.

As for the developers? Well, they might not care who owns their buildings now – but they certainly care about sales figures and people buying their properties in the future. By taking them to task publicly, you might end up earning a bit of their attention, so get out there and let everyone know what a bad hand they dealt you.

At Catalyst, we often have clients reach out whenever this sort of story hits the news to ask: Could this happen to us? And the answer, unfortunately, is yes. Yes, it definitely could. That’s why we always encourage boards to keep up on their building envelope assessments and to commission a thorough engineering report to get a look at the structural components of their building – especially if it happened to be built during the 2000-10 era, when the market was booming and homes were going up faster than you could say “poor quality construction.”

As always, if you’ve got any questions, concerns, or queries about this difficult topic, reach out to us at Catalyst Condo Management Ltd today. We might not be able to give you a great answer, depending on your situation, but we can guarantee that we’ll be upfront and honest about how things stand and where you should go from here.