Adams Stirling PLC


QUESTION: Our building is nearly ten years old. A previous board president said the builder had given our association a 10-year warranty on common area defects. What is the board's responsibility to perform due diligence on defects?

ANSWER: The law imposes a 10-year statute of repose. That means your association has a maximum of 10 years, unless the statute is tolled, to make claims against the builder for latent defects. (Code Civ. Proc. § 337.15.) More importantly, there are other shorter statutes running at the same time that will extinguish an association's rights. Boards should immediately contact an attorney if their property is less than ten years old and they suspect defects. If they wait, they may lose the right to seek damages against the developer.

Duty to Investigate. Directors have a fiduciary duty to act in the best interest of the association and with such reasonable inquiry as an ordinary prudent person would use under similar circumstances. Therefore, if a board knows or suspects the development has construction defects the board has a duty to investigate.

Picking an Expert. In performing their duties, directors are entitled to rely on information and opinions from experts. Investigations can be performed by construction defect law firms using a forensic architect or general contractor. I prefer that it be done under the direction of a law firm so the attorney work product privilege attaches as an added protection for the association. Many construction defect law firms will perform an initial evaluation at no cost to the association.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC