REAL ESTATE - CONSTRUCTION DEFECTS

Real estate agents, construction professionals and new home buyers should be careful of assumptions.  Real estate agents should take care in advising the waiver of independent inspections even in newly constructed houses. Builders should be careful about contracting with and supervising subcontractors and others.  Consulting professionals such as structural engineers should carefully and expressly define and limit the scope of their work in writing, to avoid being held liable for the bad work of others.  Buyers of newly constructed houses should not rely on city inspections or on the impressive superficial beauty of a new house.  They and their agents should “look behind the walls” before signing the papers or else everyone might find themselves in a long, expensive and unhappy court battle.

"Buyers remorse began to take hold."

It was a brand new beautiful four-bedroom house with vaulting ceilings, spacious views, easy access to town and to vast open spaces from just outside of the back door.  The real estate agent was as happy as the young family, one and all looking forward to moving day.  The house was perfect, worth every penny of the young family’s now exhausted savings and the commitment to a thirty-year mortgage.  

It’s often true that a newly built house has a few punch list items that the builder will take care of even after the sale has closed but the family became concerned when, after a few minor things were adjusted, the builder-developer just seemed to lose interest.   They looked harder at the house and found more things that were not as they were supposed to be.  The driveway turn around did not measure to the dimensions that were represented.  The hardwood floors were paper thin rather than the thickness represented.  Doubt and disappointment began to take the place of joy.  “Buyers remorse” began to take hold.  

"Please have your clients and their young children vacate the house immediately."

The house was new.  It passed all of the city inspections during its construction and cleared the final inspection when it was finished.  The real estate agent and the family didn’t see the point in paying for expensive inspections by independent experts so they all depended on the city inspectors, the representations of the developer, the glossy brochures and the beautiful look of the newly built house.  

The family hired a retired city inspector to have a look around to see what else might be wrong.  Starting at the bottom, as seemed sensible, the inspector slid into the crawlspace to see how the house was connected to its foundations.  Then out he flew, a light speed exit, because what he saw gave him fear that the house might fall on him at any moment.  He didn’t say much other than that the family should have a competent structural engineer look over the place very carefully.

Now completely alarmed, the family called the McGill Law Office and Edmond McGill dispatched a  highly qualified structural engineer to make a thorough inspection of the structural elements of the house.  “Please have your clients and their young children vacate that house immediately.  It could collapse catastrophically in a big wind or a small earthquake and crush them all to death.”

The developer-builder, the real estate agents, various subcontractors and the engineering company that provided structural calculations were all sued successfully, successfully for the homeowners that is.

The family was innocent, justifiably relying, as they had, on the professionals who built the house and the real estate agents who marketed and sold it.  

The builder-developer relied on his subcontractors and failed to properly supervise the work or to properly inspect it before putting the house on the market.  

The engineering firm did very little work, only providing accurate calculations for the builder; however, this firm failed to have a written contract that might have protected it by stating expressly and clearly that it had no responsibility to supervise how its work was used or rather, in this case, misused.

The real estate agents were professionals.  It may have been reasonable for the family to rely on the fact that the house was just built and that the city had made inspections but agents should have discourage the family from not getting their own inspections or, failing that, they should have created a better written record that the family was informed that even though the house was new, independent inspections should be conducted and that the family decided not to do so against the advice of the real estate agents.

"The family was more than made whole by having obtained good legal advice and counsel."

In the end, the insurers of all who were sued contributed to a settlement that, after lawyer’s fees and legal expenses were paid in full, provided more than enough money to repair all of the deficiencies and to provide high quality substitute housing for the family while the work was being done.  In addition, the family was compensated generously for their trouble and a bonus was paid as well by the builder, not from his insurer, but from his own pocket, because of the callousness in putting this family in danger of life and limb.

The family was more than made whole by having obtained good legal advice and counsel. The builder-developer might have saved himself a lot of trouble by consulting with an attorney and might have avoided a lawsuit if his attorney had advised him to make complete construction remedies as soon as the buyers’ complaints started. Real estate agents would profit by developing a standing relationship with a trusted attorney to whom they can direct questions for quick and non costly answers.

The engineering firm could have completely avoided exposure to any liability.  The only work it did was to make calculations which it did accurately.  Not having a thorough written contract, which a good attorney could have drafted for it to fit most of its engagements with few changes for each, placed on this firm the legal presumption that it would supervise the application of its calculations.  The was an error in business law rather than in engineering.

Having a relationship with a good lawyer sooner rather than later can save a lot of grief and a pile of money.

Content prepared by Edmond McGill

Copyright 2015 Edmond McGill

....................................................

This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.