Negligent Failure to Pursue Construction Defects

by Tom Schild

A condominium board of directors may be negligent for failure to “properly pursue” a construction defect against the condo developer, according to a recent decision of the Maryland Court of Specials Appeals.

In Greenstein v. Avalon Courts Six Condominium, Inc. , the condo board first obtained information about water infiltration in June 2002. After further investigation as to the cause of the water damage, the board obtained a report from an engineering consultant in December 2005 which indicated that the problem was due to defects in the original construction of the building. After the condominium filed suit against the developer in August 2006, the trial court ruled that the suit was barred by the statute of limitations which required that suit be filed within 3 years from the time the condominium board first learned of the water infiltration problem.

To fund repairs to fix the construction defects, each owner was assessed over $35,000. Unhappy with a large special assessment, 35 of 36 unit owners filed suit against the condominium alleging the special assessment was due to the negligent failure to timely file suit against the developer to recover the repair costs.

The trial court ruled in favor of the condominium on the basis that a condominium has no legal duty to file suit against the developer. On appeal, the Court of Special Appeals’ September 29, 2011 decision concluded that the condominium does have a duty to “properly pursue any claims” against the developer related to defects in the “design and/or construction of the common elements” and a breach of that duty could constitute negligence. The appeals court asked the trial court to further review the owners’ negligence claim.