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PRESERVING YOUR CLAIMS FOR DEFECTIVE WORK Kyle W. Ohlenschlaeger and Bruce E. Loren | Jun 14 2019

When defective work on a construction project is discovered, owners and general contractors’ first reaction is usually to repair the work as quickly as possible. However, it is just as important that you preserve your claims against the contractor (or subcontractor) that performed the alleged defective work. Most important, before taking any corrective action, the contractor that performed the defective work should be notified and given an opportunity to inspect, and potentially, given an opportunity to repair.

We frequently get calls from clients and potential clients that have discovered defective work on their project and/or property. These discoveries may be a result of something obvious – such as a roof or window leak – or of an inspection by a consultant or replacement contractor that has identified problems. In particular, replacement contractors are quick to indicate that they can begin corrective action immediately. Though that may seem like a prudent course of action to protect your asset, it is generally not recommended. By performing corrective work without giving the contractor, at a minimum, an opportunity to inspect, the owner or general contractor may be deemed to have "spoilated" evidence, thus waiving their claims for construction defects.

Case Study

This theory recently benefited our client in an active case. Our client was performing work on a project on a time and materials basis, and the owner fell behind in payments. The client suspended work on the project until such time that the owner caught up on payments. Instead, the owner hired a new contractor and refused to make payment. After the project was complete and after we had already initiated a lawsuit to recover the monies owed, the owner issued a Notice of Claim pursuant to Fla. Stat. § 558, alleging that the owner had to pay the replacement contractor to correct allegedly defective work. Of course, when we conducted the 558 inspection, we could not review any of the alleged defects because they had already been "repaired" by the replacement contractor. We argued to the Court that the owner had a legal duty, pursuant to Fla. Stat. § 558, to preserve the evidence and that we were prejudiced by the inability to inspect. The court largely agreed, and excluded all evidence of alleged construction defects that weren’t fully documented by pictures.

This was a severe hit to the owner’s case. There were limited pictures of the work at the time our client suspended work. Furthermore, even if the owner is able show that the work depicted in the pictures was defective – rather than simply being incomplete – the owner cannot apportion the amount it paid the replacement contractor to fix those specific areas. As a result, the issue of construction defects is, for the most part, eliminated from the case.

Though in this particular case we are confident that there were no actual construction defects, and the allegations were just another way for the owner to attempt to evade its payment obligations, it made us consider the detrimental impact that failure to provide an opportunity to inspect could have on our clients.

Simply stated, the law requires you to provide an opportunity to inspect construction defects prior to taking corrective action and failure to do so could result in a waiver of your entire claim. That is not a risk worth taking. As a result, we always recommend going above and beyond in giving the contractor a sufficient opportunity to inspect defective work.

Bruce E. Loren and Kyle W. Ohlenschlaeger of the Loren & Kean Law Firm are based in Palm Beach Gardens and Fort Lauderdale. Loren & Kean Law is a boutique law firm concentrating in construction law, employment law, and complex commercial litigation. Mr. Ohlenschlaeger focuses his practice on construction law and a wide range of commercial litigation disputes. Mr. Loren has achieved the title of "Certified in Construction Law" by the Florida Bar, exemplifying the Bar’s recognition of this expertise. The firm’s construction clients include owners/developers, general contractors, specialty contractors in every trade, suppliers and professional architects and engineers. Mr. Loren and Mr. Ohlenschlaeger can be reached at bloren@lorenkeanlaw.com or kohlenschlaeger@lorenkeanlaw.com or 561-615-5701.