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Conclusion and Recommendations

The bottom line is that condominium projects remain high risk. There is no absolute protection that a design professional can negotiate with its client to avoid the very real possibility of HOA and/or individual unit owner claims and lawsuits. Some states have adopted statutory pre-litigation schemes to address residential construction and design defects and “right to repair.”  Unfortunately, the statutory language has created rights for HOA and/or homeowners to pursue contractors and design professionals directly, regardless of contractual privity. The Beacon decision has taken it even farther. The best defenses remain a good set of plans and specifications, used by competent general contractors and subcontractors, with appropriate third party observation and inspection (especially of the building envelope/waterproofing). Having a client that will be there at the time of a claim is no guaranty so past performance and litigation history are worth investigating. Both you and your client should explore all of the various insurance products. Consult your insurance broker. Both you and your client should be united in making sure that HOA and unit owner maintenance requirements are mandated in the project CC&Rs, declarations and manuals. Lastly, if defect and deficiency issues do arise, a well-drafted protocol to address the same may lead to a more efficient and economical resolution of the same. The money may be good and the projects plentiful but the risks are real. Thoughtfully approaching each and every project, from contract negotiation to the purchase and sale of individual units, is key to both you and your client.

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