Q: In 2006, we purchased a condominium in Chicago on the third floor of a three-story building. Over those years, we’ve experienced water issues with the roof and windows and have repaired them as they have come up.
A few years ago, we found out the builder did not put flashing on the windows and the windows had to be repaired. We fixed that problem but found out that the roof had been pitched wrong, the roof was built against code, and the trusses and supports have all rotted out. The roofer we hired also told us that the venting in the roof was all wrong. A structural engineer came out to observe the damage and told us that in all of his 40 years in this business, this is the worst violation of codes that he has ever seen.
There are three units in our building and the estimated cost to repair the roof is upward of $150,000. We found out that the builder has dissolved his company and we don’t think that our insurance will cover the damage and repairs. We are wondering how these violations were able to get by the city inspectors. We’re also wondering if you feel that we have a case against the city (for its poor inspection of the property) or the builder?
A: That’s a terrible story! Three owners having to shell out $50,000 per unit to fix something that was done poorly (and against code) years ago is horrible. Unfortunately, there’s no quick fix. But let’s review your options:
On the one hand, the builder completed the structure over 14 years ago and it’s unlikely that you have any recourse against him or his company now. The builder dissolved the company and we think that the statute of limitations may have passed some time ago for any action against the builder. You can talk to a litigation attorney that has experience with construction litigation issues and see if there is anything there, but we’re guessing there isn’t.
You probably won’t get far pursuing the city, either. Municipalities may check for code enforcement, but they don’t owe a particular homeowner or person any loyalty or duty that would give rise to a case against the city. In other words, if they spot something, they can require a fix, but they don’t owe anything to the future homeowners in case they get it wrong.
We’ve written in the past articles explaining that city code and building inspectors may come to a job site from time to time at critical stages to see if everything is up to code. It’s quite possible that the building inspectors of the city took a look at the building at a certain time when the carpentry was put up and then after the roof was put on.
Once the roof was put on, the inspectors might not have been able to see any underlying issues with the roof. Today’s inspectors carry around infrared cameras and moisture meters. A savvy inspector might have detected problems with the roofing system if the infrared camera showed problems in the ceilings of the third-floor unit. Unfortunately, that wouldn’t do much for you now.
You should know that your homeowners association insurance policy will likely not cover this issue. Most insurance companies’ policies cover certain perils. Your association’s policy will list the perils covered. You’ll see that a lightning strike is covered but not a flood. You’ll see that a fire is covered but not termite damage or other damage caused slowly over time. But it doesn’t hurt to take a look at the association policy and each homeowner’s insurance policy, just in case.
We hesitate to suggest that you spend money with an attorney that has experience in construction litigation, especially since the builder is out of business. You can set up a meeting to see if the attorney has any suggestions, but you wouldn’t want to spend $50,000 on litigation and fail to get anything from it. That would only increase the cost to the three unit owners without solving the situation. (And, if the litigation takes years, it could dent the value of your property and even make it unsalable until the litigation is resolved.)
We do want you to consult with several roofing contractors to get quotes on what you’ll need to do to fix the roofing issue on your building. We hope that one of the contractors you hire can solve your problems once and for all and for less than $150,000.
(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)