Condominiums are one of the more affordable housing options for first-time homebuyers—but according to a new survey, they are also one of the more shoddily constructed, upending the owner’s ability to re-sell.
The “Protecting Homebuyers and Homeowners from Construction Deficiencies in Condominiums and Preserving Property Values Survey” recently conducted by the Community Associations Institute (CAI) reveals the majority of slapdash builds are in condo developments, with 81 percent of survey respondents pointing to “poor workmanship” that results in cracks in foundations, electrical and mechanical issues and leaks. Thirty-five percent of respondents say those problems detract from the home’s value, as well as impede their desire to sell it—a challenge for homebuyers hoping to trade-up.
Another challenge? Many condo associations have hit roadblocks when addressing inadequate construction in court, and the preponderance of cases have kept some builders out of the affordable sector, says CAI Senior Vice President of Government and Public Affairs Dawn M. Bauman.
“There exists identifiable trends in the legislation,” Bauman says. “Most of what we see in the declaration or preamble of the bills cite the need for more affordable housing. Market forces are dictating whether condominiums are being built, not warranties. Laws are present in the states that make associations weigh the breadth of filing a warranty claim before doing so. Reducing consumer protections by watering down the statutory warranties will not reduce purchase prices, but will increase the post-sale cost of homeownership.”
The good news is, condo associations and owners have options before pursuing legal action, including consulting with the builder.
“Developers and contractors are professionals whose businesses are challenging under even the most ideal conditions,” write Ross Feinberg and Ron Perl in their book, “Construction Defect Litigation,” published by the CAI. “Residential development and construction are made all the more complex by fierce competition for resources, a shortage of qualified labor, an erratic economy, and incessant market demands.
“Developers and contractors dislike construction defect litigation as much as homeowners do, and most will make genuine efforts to resolve problems quickly and efficiently—if you let them. For the homeowner, understandably, all defects are serious; but, from a practical standpoint, most probably aren’t serious enough to require a lawsuit. Constructive negotiations with the developer, builder, or contractor nearly always lead to resolution. In fact, most construction defects are resolved without legal action—and for good reason. Litigation is extremely costly.”
Source: Community Associations Institute (CAI)
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