Claiming common element finish deficiencies

Sally Thompson, Executive Vice-President, Halsall Associates
Monday, July 29, 2013

How do condominium corporations get warranty coverage for common element finish deficiencies caused by the builder’s trades?

Inside units, finish deficiencies must be picked up during the pre-delivery inspection. This is a review completed by the owner before unit possession. As the owner has yet to use the space, it’s clear any finish deficiencies and damages identified during the pre-delivery inspection have been caused by the builder’s trades. They are clearly warranted and generally fixed by the builder without argument.

However, life is not so simple when claiming finish deficiencies in the common elements of condos. There is no formal pre-delivery inspection process, and some owners have already moved in and are using the common elements before turnover occurs.

The condominium corporation is obliged to engage a professional to prepare a common element performance audit and make a warranty claim to the Tarion Warranty Corp. within the first year warranty period. Unfortunately, this audit doesn’t start until six months after registration. By that time, there is no way to know if damage was caused by the builder’s trades or the residents themselves. Property managers and unit owners often provide compelling verbal evidence that the damage was caused by the builder’s trades but this really isn’t enough to convince the builder – certainly not without an argument.

It is recommended that property managers help their corporations by documenting finish deficiencies as soon as they are noticed, in writing and by capturing them in dated photos. This information can be turned over to the performance auditor for inclusion in the performance audit, providing more solid evidence of which items should be addressed by the builder. As an added benefit, the corporation can rest easy fixing other damage caused by residents, knowing this is part of normal maintenance costs and not something it should be trying to capture from the builder.

This process has the added benefit that the performance auditor doesn’t need to consider minor finish deficiencies and can focus on confirming other technical details of the construction. This is a much better use of the corporation’s funds overall. Documenting finish deficiencies early will also help builders recognize the corporation has done its best to avoid making claims for damages caused by unit owners.

Capturing common element finish claims early on helps simplify the interior finish warranty procedure and maintains a positive relationship between the builder and the condo corporation. This helps when negotiating resolution of more costly and serious claims.

Sally Thompson, P.Eng., is executive vice-president and national practice leader for property condition assessment services at Halsall Associates. She acts as project principal for a wide range of capital planning and restoration projects for a variety of building types. Sally can be reached at sthompson@halsall.com.

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