The sale of a building doesn’t get a contractor off the hook from defect claims

Daily Journal of Commerce
Monday, December 17, 2007
BY DEAN ALDRICH, ALDRICH LAW OFFICE

In 2007 we saw a lot more construction defect problems in number and size, a lot more trial activity, and a lot more insurance coverage disputes – many of which are playing out in federal court – than in any year prior.

And we saw more robust litigation practice, including motions, than even when the EIFS/synthetic stucco problems were at their peak.

The underlying defect problems don’t appear to be going away, despite the amount of litigation and the governor-appointed construction defect task force’s attempts to help the construction and insurance industries get a handle on these problems.

Further, significant defect problems with condominium conversions have started to appear, bringing a maze of legal and factual problems upon damaged purchasers. The slowing market for homes, town homes and condominiums is starting to lower the number of financially solvent developers and contractors that could assist in resolving problems with their buildings or that even have adequate insurance.

However, there have been some bright spots in 2007. We’ve resolved a substantial number of claims (including large, multimillion-dollar repair projects) where developers and builders agreed to either pay for or perform repairs prior to any litigation and with minimal attorney involvement.

The most significant case of 2007 that affected the rights of residential and commercial building owners was Harris v. Suniga. In December 2006, the Oregon Court of Appeals said contractors could be held liable for negligent construction to subsequent purchasers of their projects. Therefore, a subsequent buyer of a home, condo or commercial building can sue the original contractor of the building if the buyer can prove the contractor was negligent and that the suit is within the appropriate statute of limitations. The Oregon Supreme Court is now taking a look at this case, and a decision is expected in 2008.

Dean Aldrich is principal of the Aldrich Law Office and represents property owners in construction defect suits. Contact him at 503-226-7045 or dean@aldrichlawoffice.com.