The Art of Assessing Luxury Construction Defects
“the bigger the headache, the bigger the pill.
Assessing luxury construction defects involves a fascinating array of possibilities depending on the nature of the work, and its context. If you’re an attorney whose firm specializes in construction litigation, surely you have a leg up on the competition, and you already know what to look for in terms of evidence, and seeking an expert. It is more difficult for attorneys who don’t specialize in construction to decide on the right expert to seek. Yet, even for seasoned construction attorneys, when high end or luxury construction defects are in question, the technical prowess often exceeds the capabilities or ‘bandwidth’ of their expert roster.
In heavy construction, several criteria are used to measure the most basic defects; for example, controlled inspections – such as engineer’s welding inspections, or concrete compression tests. These inspections are commonplace on larger, primarily public sector, projects –core and shell (structural concrete and steel, curtain-wall, utilities, and main risers for HVAC, electrical, plumbing, and fire-suppression, but less common on smaller projects.
“In smaller municipalities and localities, things are a little more like the Wild West: some inspectors will be overly-restrictive, wheras others are satisfied with a drive-by.
An engineer’s inspection report may reveal a patent defect that can be remedied before adjoining works compound the problem; however, latent defects; or those which are discovered well after project completion may involve forensic analysis by an expert. Naturally, the liability of a latent defect has far more reverberations than a defect that can be corrected before the problem is compounded.
For example, some years ago, two developer towers were shovel-ready at the same time on New York City’s West Side Highway. Such works are routinely built in record time, but in this instance there were side bets as to who could top-off first. In their haste, one of the towers realized a critical set back when twenty-eight days after a concrete pour three floors below the working platform, the compression tests failed. The contractor had to double-back to shore, demolish the faulty decks, and repour them.
Despite the critical nature of the defect, the contractor was able to correct the problem, and eventually get back on schedule. If not for the compression test, the problem would have been overlooked until such time as the defect might become apparent well after turn-around (evidently the design mix reports were falsified by the inspector). Such a latent defect would be far more costly to remediate than correcting the defect close to the time it was manifested, such that the builder could move on.
“The Nature of Defects are Different for High-end
Custom high-end residential construction must be differentiated from luxury residential construction: whereas both niches are in the top price tier, luxury construction nowadays refers to condominiums with fit-outs designed by name brand architects and interior designers. The units all receive the same treatment. Such standardization keeps schedules moving forward and luxury construction defects to a minimum. There is a little time or interest in customizing luxury developer work, as customization simply slows down the cycle.
The timeline from design through build is considerably longer in custom high-end residential construction, than it is in the developer market. There are no close working relationships between developer architects and condominium buyers, whereas building custom homes can best be described as a short, stormy, three-way marriage between the architect, the owner, and the contractor.
‘High-end residential’ also refers specifically to a subjective hierarchy of quality and efficiency of project delivery in the renovation, remodeling, and updating market.
Custom high-end residential construction also features boutique designers and architects; however, these designers are tasked with creating more or less customized designs according to each of their clients’ budgets. This is a considerably more difficult effort than developer work because the client’s input is dictating the process, and the architect and builder take a back seat. Custom building can be a long, drawn out, tedious process that often gets uncomfortably personal.
Homeowners make for emotional clients. This is perfectly natural and to be expected. However; emotions and building typically make for poor bedfellows. One can never underestimate the mostly negative or counterproductive influence and impact this conflict can impose on the building process, and especially the mediation process. Legal professionals typically don’t have the patience to mollify their client’s every misgiving, thus their homeowner case will be the most difficult to coordinate. Just like the owners, the contractors are only human, and all must be given a fair impartial hearing.
Indeed, I get volumes of emails about “did you read what he called me …” or “he threatened my friend …” I give these short-shrift, as they are seldom germane to my efforts. Perusing them is invariably a disappointing ROI for my clients, so I save them the trouble and expense by reinforcing the sort of expertise I offer (psychology is not one!)
In luxury construction defect litigation, engineer’ inspections and reports may be relied upon as compelling evidence of a given defect, as they are controlled documents issued by governing agencies. Fit-out projects are considerably less subject to the controlled inspections that core and shell works require, and therefore there will be much less documentation in terms of inspections. Nonetheless; these projects require licensed engineers to stamp drawings. Such engineers can make useful experts in their specialty as technical experts, but tend to be limited to one discipline or specialty.
The nature of defects in fit-outs is quite different than core and shell construction. Fit-out[i] defects pertain more to quality control and product warranty. Fit-out inspections are by and large performed by the project architect, who is typically the agent of the owner. This fickle relationship is discussed in the AIA B101. In many municipalities, mechanical contractors – plumbers, electricians, may self-inspect their work, as architects may not sign-off on engineering work without a PE.
When it comes to quality control during the interior fit-out, or the phase after core and shell of a structure, it is typically the architect’s approval of the installed work that denotes the ‘sign-off,’ or final acceptance of the work.[ii] These inspections should keep luxury construction defects to a minimum; however, unlike controlled inspections and reports, quality control can be subjective, especially if aesthetics are involved. And nowhere else are aesthetics more highly scrutinized than in custom high-end construction. This is, of course, a highly subjective business, and it reifies the larger point that there is a fair amount of confusion as to what constitutes high-quality and superior workmanship.
“The tacit presumption is that ‘luxury construction defects’ should be obviated by using skilled practitioners.
As pertains to quality defects, the project specifications the architect and engineer issue include Accepted Products, Tolerances, and Performance Requirements, as well as referencing standards, such as SMACNA, for sheet metal, and AWI for woodworking.
Custom high-end construction projects have their own special criteria for quality control, which should be outlined in their project specifications. Some architects are more thorough than others in drafting specifications. Some will use a boiler-plate outline from a specifications consultant – and simply fill in the blanks, for criteria such as finishes and fixtures that may vary from job to job. Some architects are more particular than others in holding builders to the letter of the specifications. For different reasons some will accept substitutes, or work that is not quite up to a low-tolerance guideline.
Thus, cases involving homeowners are particularly problematic for attorneys to negotiate. One reason for this is that most homeowners don’t have a substantial comprehension of the mechanics of the construction process, and especially of the mediation process. It is incumbent on the attorney to educate their clients, so to alleviate the unnecessary attendant anxiety. Savvy attorneys know how to involve their experts in such a way that they and their clients are given a rounded education of the nuances of construction claims, and their particular case. Attorneys who rely on their own experience are limited in their ability to educate their clients to the level that their expert would.
do you have a client with a luxury construction defects case? Call the premier high-end expert.
[i] Fit-out includes the interior walls, ceilings, finishes, and furniture, fixtures, and equipment (FFE)
[ii] Quality control is never a controlled inspection, and need not be performed by an engineer or an architect. Quality control is less of a concern in the core and shell stage, as those elements – save for the façade, will be hidden, and do not receive finishes.
