Condominium Construction Defect Warranty Claims Maryland DC

Construction Defect Warranty Claims in Maryland

The attorneys at Cowie Law Group, P.C. handle construction defect warranty claims for homeowners and condominium associations and are familiar with applicable laws. Nicholas Cowie, a partner at Cowie Law Group, is an authority on Maryland warranty law and he drafted the latest warranty legislation (“Senate Bill 597“) that amends the statutory implied warranties under the Maryland Condominium Act and the Maryland Homeowners Association Act applicable to construction defects in newly constructed condominiums and homeowner associations communities (“HOA”). Among other things, the warranty reform legislation drafted by Nicholas D. Cowie extends warranty periods in situations where developers hold onto control of the association for an extended periods of time. For an article discussing the amendments to the Maryland statutory condo and HOA warranty laws follow this link: “Warranty Reform Legislation Comes To Maryland.” Mr. Cowie led the effort (with support of homeowners, the Community Association Institute, the Consumer Protection Division of the Attorney General’s Office, and the Maryland Homeowner’s Association) to ensure that the legislation was enacted into law. Ultimately, Senate Bill 597 was passed unanimously by the Maryland General Assembly and signed into law by Governor O’Malley (see photo above), effective October 1, 2010.

Enforcing Warranty Claims for Condominiums

Below are some excerpts from an article I wrote on enforcing condominium construction defect warranty claims in Maryland:

Condo association board members should be informed about the various statutory warranties applicable to their community so they can make informed decisions about identifying and bringing all construction defect issues to the developer’s attention before warranties expire.

In Maryland there are four separate statutory warranties enacted by the Maryland General Assembly to protect consumers from construction defects in newly constructed homes and residential condominiums. One is an express warranty and the other three are implied warranties.

Express warranties are based on written representations about the quality of construction. Implied warranties set forth minimum standards of construction imposed by law in the sale of a condominium regardless of whether there exists a written representation or intention to create a warranty.

Generally, the implied warranties given by a developer under Maryland law provide that the common elements and/or units, are:

“free from faulty materials”
“constructed according to sound engineering standards”
“constructed in a workmanlike manner”
that the developer is responsible for correcting defects in materials and workmanship
that construction is “within acceptable industry standards in effect when the building was constructed”.

The time for enforcing these warranties can be as short as two years and as long as four years. The enforcement time periods can commence at different times depending on the facts of each individual case. Some warranties require that notice of the construction defect be given to the developer within a certain time period. In order to avoid the need for filing suit to preserve warranty claims, the time for enforcing warranties can also be extended during developer negotiations by a private “tolling agreement.”

The manner in which statutory warranties apply to construction defects is often misunderstood. Associations and unit owners are often incorrectly informed that their construction defect-related problems (such as leaks around windows) are “out of warranty” because the problem did not occur during the warranty period.

Construction defects, with few exceptions, actually occur during construction and therefore exist at the time of sale to a unit owner. However, these construction defects may be concealed within exterior walls or otherwise “latent” (i.e., not obvious) to the average person until they later manifest themselves, such as in the form of leaks around windows. In such cases, the statutory warranties are breached at the time of sale by the Developer, well within the warranty period, however, the unit owner is unaware of the breach. It is up to the unit owners or their association to identify these construction defects and address them with the developer within the applicable time period for warranty enforcement, known as the “statute of limitations”.

In today’s world it is customary and prudent for condominium associations to obtain what many in Maryland call a “transition study” (also known as “Deficiency Study,” “Defect Report,” “Building Transition Warranty Analysis”, etc.). This is typically a once over, general evaluation of the construction of the community summarized in a report performed by an architect, engineer or construction consultant to identify existing or potential construction defects that may or may not be obvious to the untrained eye, before they become big problems and before warranty rights expire.

Left unattended, even minor construction deficiencies can, over time, result in extensive and costly property damage to a building. Leaking around windows and through exterior walls and roofs (the building envelope) can go on for years causing major damage to the wood structure of a building. I have seen many instances where such damage remains hidden behind walls for years without ever being notice by the untrained eye until water starts entering living spaces. [In a future post I will give examples and photos of such damage from latent construction defects that could have been easily fixed if they had just been brought to light at an earlier date].

Experienced property managers always recommend that their homeowner and condo association clients get transition defect reports early on before warranties expire because they know that construction defects may not be obvious to the average homeowners and may not manifest themselves in the form of property damage (e.g., roof leaks or window leaks) for many years. An architectural or engineering firm can identify any such problems at an early stage so that they can be brought to the developer’s attention while warranties are still enforceable and before serious property damage occurs.

The application of warranties is a complex area of law. All newly formed, unit owner-controlled condominium associations should contact a Maryland lawyer who has extensive experience handling construction defect matters on behalf of condominium associations for a free consultation as to how the various statutory warranties apply and when the expire so that the association can make informed decisions about protecting its statutory warranty rights to have a condominium free from construction defects.