HOA Wins Settlement For Building Repairs

Robinson & Henry’s knowledgeable attorneys give their professional insight in “From Our Perspective,” where we take a closer look at the successful outcomes of our attorneys. 

In this episode, Litigation Partner Christopher "Kit" Davlin discusses a case involving a homeowners association facing water intrusion issues in the complex’s buildings. By acting early and holding the builder accountable, the homeowner’s association (HOA) secured the funding necessary to prevent a financial burden from falling on the homeowners.

Past results afford no guarantee of future results; each matter is different and must be judged on its own merits. Facts are those of an actual Robinson & Henry litigation case. 

A single homeowner complaint to an HOA might be easy to dismiss as an isolated issue. Two complaints of a similar nature could be a coincidence. However, multiple reports of the same problem typically indicate a broader issue, which is what happened in this case. Homeowners began reporting troubling signs of water damage, leading the HOA to engage our attorneys to help it recover repair costs from the builder. 

Construction defects don’t always become apparent right away. Sometimes, it takes years for issues like water intrusioninstruction to emerge. 

As the HOA began investigating homeowners’ complaints, it discovered evidence of design and construction defects that could lead to major damage in the future. While there wasn’t an immediate crisis, the signs of damage were apparent. 

The HOA took proactive steps to assess the extent of the issue before it became a much larger and costlier problem. Testing confirmed that poor construction methods had left the homes vulnerable to serious long-term water damage.

After discovering the defects, the HOA and the builder agreed to conduct further testing. The results confirmed significant design flaws. 

Unlike some cases where builders try to avoid responsibility, this builder acknowledged the problems and was willing to step up. 

Thanks to the efforts of Robinson & Henry’s construction defect attorneys, the HOA secured a seven-figure settlement needed to make all necessary repairs.

Without the settlement, individual homeowners could have faced hefty repair costs. Now, they have peace of mind.  The HOA has the funds to fix the issues without burdening residents with unexpected expenses. Taking proactive legal action avoided what could have been a long-term financial strain.

Davlin offers key takeaways for other HOAs or property owners dealing with construction defects:

• Act Early: There are statutes of limitation on claims against builders. It’s crucial to consult legal counsel as soon as possible.

• Get Professional Testing: A home may look fine on the surface, but deeper investigations can reveal hidden defects that could become major problems down the road. Proper testing can uncover hidden defects before they escalate.

• Be Persistent: Builders may try to downplay the issue or offer inadequate settlements. HOAs should be prepared to push back and demand fair compensation.

This HOA avoided a financial disaster by taking decisive action and ensuring its community remained safe and structurally sound. By addressing these issues, HOAs can protect their homeowners from unexpected costs and ensure their properties remain well-maintained for years to come.

Read this video’s full transcript:

Question: Kit, thanks for joining me. Tell me about the issues this HOA was facing?

Kit: The HOA in question was facing water intrusion issues. It wasn’t just the water that was coming in now, but it was obvious that there was the potential for significant future water intrusion. 

Question: What was the extent of the damage and how did this impact the homeowners? 

Kit: There wasn't a tremendous immediate impact, but they could see that there was damage from the way in which the homes had been built that was going to lead to future water leakage, and that could be a rather significant amount of damage. 

In an attempt to get ahead of it, the HOA and the builder agreed to do some testing, and that testing revealed significant problems in the techniques and styles in which the building had been constructed.

Question: In these types of cases, do the problems come up immediately after construction?

Kit: Not always. Sometimes you don't see this for a number of years, and this is very important because there are statutes of limitation that a homeowner's association should be aware of on how long they have to bring these claims against the building. 

Question: And in this case, how were you able to hold the original builder accountable?

Kit: The original builder, in this case, was willing to step up and take some responsibility for the techniques that have been used and the problems that the homeowners association was facing.

We were able to reach a settlement in which the homeowner's association and all of the owners of the homes were able to get the funds needed to make all of the significant repairs that are going to be required. 

Question: And you mentioned that the outcome of this case and what does this mean for the HOA? 

Kit: It means they finally have enough money to take care of the problems that were facing them and don't face that significant shortfall that was going to be passed on to all of the homeowners over the next several years.

Question: What advice would you give to another HOA or any property owner that might be facing a similar situation? 

Kit: A couple of things that are important. First, because of the timelines we've mentioned, it's important to seek legal counsel early enough that they can provide help to you. Secondly, it's important that we get testing done to know exactly the nature of the problems.

You and I can look at the building and it looks like it might be a fine building four walls and a roof, and everything's beautiful. But beneath that veneer, there can be significant problems that can hold a vast array of issues that the homeowners association and the owners of the homes will have to face over the coming years.