Construction defects

Not everything wrong after turnover is a defect

A roof that wears out on schedule is a maintenance problem. A roof that leaks in year two because it was flashed wrong is a construction defect, a problem built into the property before the first unit ever closed.

Your reserve study will not tell you which one you have. It estimates the remaining life and replacement cost of components to set assessment levels; it is a funding plan, not a diagnosis. An engineering transition study, a separate document, is what actually looks for the problem.

"Design, construction, or code-related issues that could impact the association's future management and financial well-being."

Source: Condominium Transition and Turnover Studies, VERTEX

If your board only ever commissioned a reserve study, nobody has actually looked for this yet.

Two clocks, and missing either one ends the claim

A statute of limitations starts running when the defect is, or reasonably should have been, discovered. A statute of repose starts running on a fixed calendar event, usually substantial completion or the date of occupancy, and it cuts off the claim after that period no matter when anyone actually noticed the problem. A defect nobody found until year nine can still be time-barred by a repose period that started on day one.

How long each period runs, and which event starts it, varies by state. California's repose period for most construction claims is a verified example, not a national number:

"No action may be brought to recover under this title more than 10 years after substantial completion of the improvement."

Source: California Civil Code, section 941, California Legislative Information

Other states set different lengths and start the clock on a different event. Find your state's construction defect statute, and read the statutes of limitation and repose lesson before you assume you have years left.

A warranty can sometimes outlast the deadline above

Some states recognize an implied warranty covering the common elements themselves, separate from any statute of limitations or repose, though whether it exists at all and what it covers varies by state. Illinois is a documented example:

"A unit and the common elements in the condominium are suitable for the ordinary uses of real estate of its type."

Source: Implied Warranty of Habitability: Key Insights for New Construction Condominiums in Illinois, Illinois Condo and HOA Law Blog (Kovitz Shifrin Nesbit)

Some courts have declined to extend this kind of warranty to condominiums at all. Do not assume your state has one, or that it covers what Illinois's does; ask counsel.

Your declaration may have already rerouted this fight

Many developers write an arbitration clause into the declaration specifically so a future defect claim against them never reaches a courtroom.

"Common practice for real estate attorneys to include arbitration clauses in declarations for common interest communities."

Source: Enforceability of Arbitration Provisions in Disputes with Developers, Tinnelly Law Group

Whether such a clause can be enforced against the association, or amended away after turnover, is a contested question that courts in different states, and even within one state, have answered differently. Do not decide your board's strategy on this before a construction-defect attorney has read your specific declaration.