Common questions from property administrators in a construction defect claim.

1.- If damage to private elements is being claimed, can the president claim on behalf of the other owners?

In fact, yes: the president has standing to act in the name and for the benefit of the homeowners’ association, even to claim on behalf of the private properties. However, it is advisable to state this expressly in the minutes authorising the president to act on behalf of everyone and, if the claim is based on contractual liability, to provide copies of the owners’ title deeds.

2.- How are the costs of the expert report shared if some owners do not want to claim?

The quote for the expert report will include the amount for the communal areas and will break down the cost for each home that also wishes to be inspected. Obviously, the first amount will be borne by the homeowners’ association and the amount for each home by each owner. However, the full payment for the report must be made by a single payer, unless the client is not the homeowners’ association but only individual owners separately.

3.- Can it be a problem if the developer still owns some of the homes?

A simple majority at the owners’ meeting is enough to authorise the president to take legal action against those responsible for the construction defects. Even if the developer owns some homes and tries to obstruct, there are ways to overcome these obstacles.

4.- What happens if the owners want to carry out repairs early while the proceedings are under way?

Although proceedings are unfortunately long and owners often become desperate and want to repair the damage early, they must be patient, because if repairs are carried out prematurely, the defendants will claim they have been left “defenceless”: that repairs were made without giving them the chance to assess the damage, and without any reliable record of that damage. There are some exceptions to the obligation not to repair, such as having to carry out urgent and necessary repairs because the damage is getting worse, but it is important to get proper advice first.

5.- Is there a risk of being ordered to pay legal costs?

That risk can always exist in any court proceedings. However, DPcon’s legal department thoroughly examines the viability of the claim before filing it: that the actions are within the time limit, that the lawsuit is viable (drawing on our lawyers’ decades of experience) and that the damage can clearly be claimed from those responsible for the construction. We therefore consider that the risk of an order to pay the other side’s legal costs is minimised as far as possible. Indeed, for that to happen everything would have to go wrong, since the claim would have to be dismissed in full and the judge would have to find that it was brought recklessly.

6.- How will the compensation be shared out if it is obtained? And what if someone does not want to carry out repairs?

We do not get involved in that distribution, since the homeowners’ association and the client are always free to decide what they do internally. The usual approach in construction defect proceedings is to seek compensation, and there will be no out-of-court control over what that compensation is used for. The appropriate course would be to use that amount to repair the damage claimed for, hiring a solvent building contractor so that everything is repaired with the compensation, prioritising the most important items. The next option would be to share out the compensation pro rata among the owners, taking into account what was awarded in the judgment and the damage set out in the expert report. However, as we say, we do not interfere in what the homeowners’ association does after the proceedings, and the parties to the court proceedings will most likely not know what the compensation is used for.

If the homeowners’ association you manage has any of these questions, or others, about a construction defect claim it is considering, contact us and we will see whether we can help.

DPcon Reclamación Daños Constructivos.