warranty coverage

Maximizing common element warranty coverage

Tips for getting construction deficiencies resolved in new condo complexes
Friday, July 13, 2018
By Gerard Gransaull

With the number of cranes dotting the GTA’s skyline, it’s clear that condominium demand remains strong.

Each new development is a testament to the talented professionals who bring them to life — it’s an incredible feat of architecture, engineering and project management to start with a deep hole in the ground and end up with 27 floors of gleaming glass tower. It’s a challenging, multi-stage process.

While the majority of the steps go right, some can go wrong along the way — many small, and some not-so-small. For Ontario homeowners, the Tarion warranty is available to protect their investment. Tarion provides one-year coverage for all major systems and finishes, two-year coverage for the main systems, and seven-year coverage of the major structure.

For condominiums, Tarion coverage applies to each of the individually owned units and to the corporation-owned common elements — the systems and components that serve the whole building, such as the structure, roof, windows and electrical distribution. The Condominium Act requires the corporation to hire a consultant to carry out a performance audit to identify and report on deficiencies in the construction of the common elements. The report is submitted to the builder, who can then make repairs, ask for clarification, or dispute the findings. Often, the consultant is engaged in helping the corporation get the deficiencies resolved.

While there are multiple ways to get there, the goal should be for the corporation to maximize its repair coverage in an efficient way. This article presents strategies for maximizing common element construction warranty coverage.

Get the documents early

The Act requires the builder to turn over many of the construction documents to the corporation for its use in ongoing repair and maintenance. The list of required documents includes:

  • As-built construction drawings, including structural, architectural, landscape, mechanical, and electrical;
  • Specifications; and
  • Submittals and shop drawings.

Builders are usually very good at providing the construction drawings. They are less forthcoming with as-built, specifications and shop drawings. Canvassing the builder early, and regularly, for a full set of documents will enhance a consultant’s ability to identify deviations between what was installed, and how it was installed, and what was supposed to be installed.

Stick to the big stuff

While deficiencies are inevitable, there is bound to be a wide range of severity, and a certain subjectivity in interpreting their importance. It’s tempting to approach the exercise with a “let’s-list-absolutely-everything” mindset, but a nit-picking approach will be expensive and counter-productive. Overly fine attention to minor concerns will only reduce the chance of active co-operation from the builder. Also, a long list of minor concerns bloats the audit deficiency list, rendering it harder to manage. The audit should stick to deficiencies that are affecting much of the building, reducing performance or functionality, or are safety-related, for example.

Cosmetic concerns are common but in most cases do not require a consultant to identify. Prior to the audit, it’s recommended that a board representative and property management walk through the common elements with the builder to identify cosmetic deficiencies, such as missing paint, carpet problems, or drywall cracks. This will help set each party’s expectations, and offers the chance to get the deficiencies corrected so they stay off the audit list. In this process, it’s helpful to remember Tarion’s guideline for a cosmetic deficiency — if it’s not noticeable beyond six metres away (20 feet), it’s not a defect.

Slightly fuzzier are routine maintenance items. If there is a new problem with a system that has been functioning normally since it was installed, be rigorous in interpreting its applicability. If the problem is with a part that is subject to regular maintenance, it’s likely not a warrantable defect.

Identify deficiencies carefully

The apparent goal of the performance audit exercise is to list construction deficiencies. The actual goal is to get all the construction deficiencies listed repaired by the builder. This distinction is too often overlooked. To maximize coverage, the audit report should list problems completely and discretely.

It’s easier to get deficiencies resolved if they’re described completely. The complete identification of a problem includes three things (and three things only, arguably):

  1.  A concise statement of the deficiency. This is often poorly done (no one has ever accused engineers of being great writers). Too often the symptom is identified and not the deficiency. Unless the actual deficiency is identified, the builder may not consider it his or her problem. However, take care to avoid specifying a repair — this is not required, and often not helpful;
  2.  A clear and precise description of where the deficiency can be found. One hundred per cent of deficiencies that the tradesperson cannot find will not be repaired, delaying resolution; and
  3. Backup for the claim of the deficiency — this can include the relevant code citation (Ontario Building Code, CSA, ULC, as examples), the Common Element Construction Performance Guidelines reference, or a report from a specialist; a deficiency which clearly specifies non-compliance is much more likely to elicit a builder repair, or a favourable warranty judgement.

Equally important is to identify deficiencies specifically and discretely. For problems that occur, or are likely to occur, repeatedly throughout the building, it’s tempting for consultants to extrapolate from their sampling and write a deficiency which implicates the whole building. Tarion will not warrant general statements, nor can the builder effectively fix them. To maximize repairs, the board should authorize the consultant to physically review all, or a greater sample, of the affected areas, which allows discrete (albeit repetitive) identification of each problem location. This allows the builder to hand the list to his trade, making it easier for them to go down the list, completing repairs and crossing them off.

For example, it’s not helpful to write: “Missing sealant at conduit penetrations in electrical closets on sampled floors two and seven. This condition is expected to be present throughout.” It’s better to write: “Missing sealant at conduit penetrations in electrical closets on floors two, three, four, seven, nine, and 11.”

Engage specialists

For an effective audit, consultants will engage a team of experts to review the various systems. Most of the systems can be assessed in-house. There are specialized systems, however, that the board is strongly advised to retain a specialist to assess. Most important are the suspended access system, and the elevators.

For suspended access systems (roof anchorage for window washing and building repairs), there are specific codes, regulations and practices that only a designer has the necessary knowledge to check. For elevators, there is the additional impetus that only a licensed mechanic is permitted to access the hoistway and pit, where important deficiencies may be hiding.

While engaging the specialists adds to the corporation’s upfront costs, in virtually every case the experts identify problems that would have cost the condominium considerably more to correct after the fact.

Substantiate proactively

For some deficiencies, the source of the problem is clear. If a leak is occurring due to a damaged roof membrane, the repair needs are obvious.

In some cases, however, it is neither clear what the deficiency is, nor what the repair involves. A suite owner’s report of sounds or odours coming through a wall shared with a neighbour, or multiple suites reporting low water pressure, are examples. In these cases, the board should do more work to both substantiate the problem and the likely cause.

The builder cannot be expected to repair an observation. The board should identify the items for which a problem would be a major concern, and should be proactive about substantiating them. There is no point in paying to diagnose a problem that has limited consequences or a relatively simple repair.

Communicate

In any relationship where the desired outcome is similar but ongoing needs may be opposed, regular communication between parties is vital. Sounds like a marriage! The Tarion process specifies the minimum interactions, which involve 60-day turnaround responses. But more frequent updates are beneficial in keeping the process moving smoothly. Bi-weekly emails that deliver status updates are much better than spreadsheet ping-pong every two months. It’s beneficial for the consultant to tour the site with builder’s representative once the deficiencies have been compiled. This allows deficiencies to be located, discussed and clarified as required.

It’s also important to remember that Tarion’s involvement, in the best case, should be minimal. With open communication, clear and reasonable expectations, and mutual respect, the performance audit-reporting and deficiency-resolution process can be successfully managed, allowing condo owners to enjoy their sleek new homes, and the builders to move to their next exciting project.

Gerard Gransaull is a professional engineer and veteran building engineer. With more than 25 years of expertise in the assessment of existing buildings, he leads WSP Canada’s Building Condition Assessment practice. WSP is a Canadian multinational consulting firm with more than 40,000 experts on all continents.

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