Class Actions

Class action lawsuits allow large numbers of "similarly situated" homeowners to bring a claim as one unit.  For example, if all or most homes in a single-family home development are built with substandard roofing that results in leaks, all of the affected homeowners can sue as a class.

Usually, one homeowner, who should be one of the original owners, is the named plaintiff who is the "class representative."  The procedure becomes fairly complex.  First, the "class" must be court-certified as proper. Certifying the class is not as simple as it may sound. Courts vary radically on what they will certify, and developers will fight certification because they want to limit the number of potential claimants. However, class action is the preferred method of proceeding in single-family housing developments.  However, the courts rarely certify these class actions, requiring individual owners to join your group of other affected owners to bring these cases with out a class being certified.   With individual claims, many owners do not get involved because of apathy, embarrassment, fear of disclosure, or the need to sell or refinance. Even though they share a common construction defect with other homeowners, in the same development, interests vary.

In addition, courts generally require attorneys to meet certain qualifications before the court will allow them to be lead counsel representing the plaintiffs in class action lawsuits.  If a court certifies the "class" and the attorney meets the qualifications to represent the class, individual class members may "opt out" of the class and bring their claims separately.

Of course, owners in a condominium development do not need to file a class-action suit because the principal building owner is the homeowner association and it brings the lawsuit.

Attorney fees and costs frequently are handled differently in class action lawsuits than in individual lawsuits.  In some jurisdictions, the losing party can be required to pay the prevailing party's attorney fees and other costs.  In others, the plaintiffs will be liable individually for the defendant's fees and costs if the plaintiffs fail to prevail.  Prudent clients will require that their attorneys carefully and completely explain these possibilities.