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In this informative Legal Talk episode, attorney Michael Savino of Braverman Greenspun shares with Habitat's Paula Chin essential guidance for co-op and condo board directors dealing with construction defects in new buildings. The conversation provides a clear roadmap for boards to protect their interests when issues arise after a sponsor hands over control.

Savino explains that while minor problems can often be addressed through punch lists, major defects—particularly in building systems like plumbing and facades—require swift and methodical action. He emphasizes that these issues can be both costly and potentially dangerous to residents and passersby if left unaddressed.

Key takeaways for board directors:

• Act quickly and document everything: Survey unit owners about problems, save all communications, and notify the sponsor early, as there's a six-year statute of limitations from the first unit sale to file claims.

• Hire the right experts: Engage an appropriately sized engineering or architectural firm to conduct a thorough building assessment and provide detailed documentation of all defects—this initial investment will prove valuable in negotiations or litigation.

• Understand your options: Before pursuing litigation, explore whether the sponsor will cooperate through direct negotiation or a tolling agreement. If litigation becomes necessary, ensure the sponsor entity has assets to pay for repairs.

• Consider costs carefully: While violation fines and repair costs may be recoverable, legal fees typically aren't unless specifically provided for in the offering plan. Statutory interest of 9% can accrue on claims during litigation.

The episode underscores that proper due diligence and documentation are crucial for boards to successfully address construction defects and protect their buildings' long-term interests.

The business of running a building is demanding work that requires making endless decisions — some that can quickly lead your board into a quagmire of legal difficulties. Legal Talk interviews New York's leading co-op/condo attorneys to find solutions, and get some guidance, on these challenges. For more co-op and condo insights, sign up to receive Habitat's free newsletters or become a Habitat subscriber today!