This is a simple question with a complicated answer. Construction defects are one of the most common causes of disputes and litigation in the construction industry. There is often disagreement when it comes to identifying what a construction defect is because of the differing viewpoints and interests of those asking the question and/or making the determination.

Statutory definitions for the term “construction defect” vary from state to state. Generally speaking, the term “construction defect” is broader than just defective workmanship. A construction defect is generally defined as a defect in the design, the workmanship, and/or in the materials or systems used on a project that results in a failure of a component part of a building or structure and causes damage to person or property, usually resulting in financial harm to the owner. The question becomes how do you identify a construction defect, how do contractors protect themselves from this liability, and what do you do when you discover a construction defect?

DESIGN VS. WORKMANSHIP

There are two types of construction defects—those that are known or readily obvious upon inspection (patent defects) and those that are concealed and are often not readily observable (latent defects). However, even with this distinction, it is important to note that there is a difference between a construction defect and a nuisance claim resulting from lack of maintenance or normal wear and tear. Construction defects can range from complex foundation and framing issues, which threaten the structural integrity of buildings, to aesthetic issues, such as improperly painted surfaces and deteriorating wood trim around windows and doors.

As mentioned above, construction defects include both design and workmanship defects. Design defects typically result from the design professional’s failure to produce an accurate and well-coordinated set of construction documents. Design defects are usually categorized as an error or omission or both. A design error is a mistake in a design element usually discovered by the contractor during construction and that requires replacement or redesign of some component to correct the error. A design omission results from an incorrect design item or a scope of work that was missed by the design professional in his or her construction documents and may be added to the contractor’s scope by change order.

Workmanship defects typically result from the contractor’s failure to build a structure or component part of a structure per the construction documents. Workmanship defects may include items such as an improperly installed weatherproofing system, improperly installed stucco or EIFS exterior wall system, soils that were not properly compacted, or improperly installed flashing or a lack of flashing.

STANDARD OF CARE

The parties with potential liability for construction defects are the design professional, the contractor, and those consultants and subcontractors under the umbrella of the design professional and contractor. The owner is almost always free of fault.
The contractor has a duty to perform the work and build a structure in strict accordance with the contract documents, including the design documents. Construction contracts have evolved from being the written agreement that facilitated the construction process to becoming the centerpiece of the construction process. This is why it is so important for the contractor to ensure that the construction contract says what the contractor wants it to say.

The standard AIA General Conditions A201-2007 requires the contractor to visit the site and become familiar with the local conditions. The contractor is also required to review the contract documents in order to coordinate and facilitate the construction, and perform the work in accordance with acceptable standards of workmanship in the construction industry. The contractor maintains responsibility for the construction means and methods, and must ensure that the work will be free from defects and conforms to the requirements of the construction documents. However, the contractor is not responsible for ascertaining that the construction documents were prepared in accordance with applicable laws, statutes, and ordinances. This responsibility remains with the design professional. So, if the contractor does not want to take on the liability for design errors or omissions, then the contract must clearly address that concept.

PREVENTION AND RESOLUTION

All parties involved in the design and construction of a project want to prevent construction defects. For a contractor, implementation of a quality assurance/quality control program is important as it will serve to minimize defective work. The implementation of this program provides the contractor with an opportunity to repair defective work prior to the completion of the project, which may reduce monetary damage to the contractor and protect the contractor from future litigation.
However, if the contractor becomes aware of a construction defect, a preliminary investigation of the structure should be performed. This would involve a walk-through of the project to gather as much information as possible, and to present that information to the owner so an informed decision can be made about whether further action is required. When confronted with a construction defect, the contractor’s ultimate objective should be to repair the defect while expending the least amount of money. Because removing defective work is not always the most cost effective solution, it is important to consider a creative approach to remedy the defect. ■

 

About The Author:

Jessica J. Alley is a construction attorney in the Dallas office of Ford Nassen (www.fordnassen.com), which is nationally recognized in the industry and is one of the largest construction law firms in Texas. Jessica’s practice involves counseling and advising owners and contractors in both the public and private sectors on issues including contract drafting and review, lien and bond law, dispute resolution and negotiations, and litigation. Jessica can be reached at jjalley@fordnassen.com or 214.523.5100.
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Modern Contractor Solutions, September 2013
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