What you need to know about construction defects
October 2001 - With Arizona's housing boom, a new problem, more serious than the congested roadways and rapidly increasing pockets of tract housing, has been born. Construction defects. They've affected homeowners all over the valley, regardless of home price. With claims recently being filed against such well-known communities as Anthem and Terravita, it seems that everyone is talking about them.
Scottsdale Airpark News recently spoke with Tom Miller, founder of The Miller Law Firm which is handling both the Anthem and Terravita cases and Rachel Miller, his daughter and the firm's marketing partner, about the hot topic.
Together, the Millers authored Home and Condo Defects: A Consumer Guide to Faulty Construction (2001), the first national guide of its kind. They are also the authors of the only legal treatise referred to by the California Supreme Court, Handling Construction Defect Claims: Western States (1986, 1993 and 1999), currently in its third edition.
The Miller Law Firm has offices in Newport Beach, and San Francisco, Calif.; Phoenix; and Las Vegas, Nev. It also consults with homeowners associations across the country, including Washington, Oregon and Florida, in affiliation with local licensed counsel.
SAN: What is considered a construction defect?
The Millers: A defect is any failure of the building or building component, whether it be a condo or home. Any failure of the home or condo that does not meet the reasonable buyer's expectations, or does not comply with local building codes or construction standards, is also considered a construction defect.
There are two types of defects. "Patent" defects are ones that are obvious and can be observed by reasonable inspection. "Latent" defects are those that are not apparent by reasonable inspection. Buyers and owners should defer to experts and attorneys to help determine what kind of defects they are experiencing.
SAN: What are the most common defects you see?
The Millers: In the Valley, we see extensive exterior one-coat stucco scracks and failures, water intrusion, including window, door, deck and roof leaks, and interior drywall cracks. Expansive soils, improper drainage such as ponding in the common areas and around foundations, and toxic mold are other types of defects that are commonly seen.
SAN: Why do these occur?
The Millers: Let us first say that builders do not set out to build a bad home or condo. The Greater Phoenix area has experienced tremendous growth in a short period of time, much like southern California in the '80s and Las Vegas in the '90s. The need to meet the huge consumer demand for homes in this kind of growth period breeds mistakes and corner cutting. The shortage of trained and skilled labor, coupled with the lack of supervision, makes for more mistakes and the increased likelihood of construction defects.
SAN: Is there a statute of limitations to filing a construction defect claim?
The Millers: One of the worst things that can happen is to miss a statute of limitation time limit. In Arizona, it depends on what you are suing the builder for. Very simply, a homeowner has eight years from substantial completion of the home unless the damage occurs within the eighth year, in which case the statute is extended for one year (making the time limit nine years). A consumer has six years from the date a defect is discovered. Don't try to figure out for yourself whether the time limit has run out. Leave that to a construction defect attorney. And don't turn over an expert report or repair estimate to the developer because it may trigger a statute of limitations.
SAN: How can homeowners know they really have a defect and what should they do about it?
The Millers: If you live in a condominium or townhouse association, speak to your board of directors and your property manager. Report any leaks, cracks or other defects to the association. They are responsible for repairing and maintaining your unit, including an expert investigation, if needed. The board can in turn consult with a defect attorney and their independent experts, often at no charge to the association.
If you live in a planned-unit development or yours is a single-family, detached home, speak to your neighbors. They may be experiencing the same problems. Gather a group together to consult with an attorney. Most defect attorneys will come out and help you evaluate your defects with independent experts at no cost.
SAN: What is the best route for someone to take if they think their home is affected?
The Millers: You can try to contact the builder if you are within your one year warranty period to get your problems fixed. Once this expires, consult with a defect attorney who will help you find the right experts to evaluate whether you even have defects. Most seasoned defect attorneys can help you evaluate this for free.
SAN: Have you been seeing an increase in defect cases lately? If so, why do you think that is?
The Millers: Defect cases have been fairly new to Arizona. Our firm has recovered over $400 million on behalf of associations all over the Western U.S. and Arizona has had a recent surge in case filings because of the population boom and housing demand. Our firm currently represents thousands of home and condo owners in the Greater Phoenix area.
SAN: What about owners of commercial properties? Do they have the same rights as homeowners?
The Millers: Owners of commercial buildings are typically held to higher standards than are home ore condo owners because the purchase of a commercial building usually involves people who are represented by attorneys. Commercial building owners do have the right to pursue a defect claim against the builder or general contractor, but usually only under contract claims.
SAN: If a homeowner does work on their home, does that negate a builder's responsibility?
The Millers: No, it does not. Some builders claim that improper maintenance of homes or condos negates their responsibility when, in fact, it is the builder who is primarily responsible for the inherent defects. Lack of maintenance may contribute to smaller problems, such as backed up gutters or drains, but in no way creates the defects for which owners can recover significant damages.
SAN: Is it really worth it to go after a builder? After all, they usually are large companies!
The Millers: Builders are in fact large, national corporations, often publically traded. They do have significant legal resources, but insurance is what pays 100% of these claims. Home and condo owners have very strong legal rights. It basically comes down to the consruction defect attorney they choose to hire. Most experienced CD attorneys work on a contingency fee, where no fees are paid until, and unless, the case is won. And, most attorneys will advance the expert investigation and legal costs until the end of the lawsuit.
SAN: What if the builder is out of business? Is there any recourse?
The Millers: Because insurance money is used to pay these construction defect claims, it should not be an impediment for consumers to pursue these claims. There is definite recourse against bankrupt or insolvent builders for construction defect claims.
SAN: You recently wrote a book titled Home and Condo Defects: A Consumer Guide to Faulty Construction. Can you tell me about it?
The Millers: The book is a labor of love that originated out of university courses we have taught throughout the Western U.S., including at ASU this past June. We field calls from condo and homeowners across the West and their predominant concerns are 1. How can I find out if I have defects? 2. What are my legal and financial options? and 3. What can I recover? This book addresses these concerns in a non-legal fashion and is the first and only resource on the market for consumers faced with defects.
SAN: How is it available?
The Millers: It is available online at www.ConstructionDefects.com or by calling (800) 403-3332. In addition, it can be purchased through amazon.com or at most Barnes & Noble bookstores in the Valley.
SAN: Do you have any tips for people looking to purchase a home, new or used?
The Millers: First, check the reputation of the builder of the home. See if any lawsuits have been filed against this builder and compare those defects with what you see in the home you are thinking about purchasing. Second, talk to potential neighbors about the builder's response to warranty issues, particularly in a new development. Third, consider the age of the home you are purchasing. Remember, there are only eight years from the date the home was completed to pursue a construction defect claim.
SAN: Is there anything else that a consumer should know?
The Millers: One very important issue is the builder warranty that is provided on a new home. These are usually one year warranties that are very limited in what is covered. And, most repairs that are conducted during this warranty period are "band-aid" or cover up repairs.
© Copyright 2010 The Miller Law Firm. All rights Reserved.
If you experience problems or have questions, contact us at Info@ConstructionDefects.com.
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