According to a 2017 Dodge Data Analytics Survey, Owners most frequently experience claims arising from construction defects (31%) and warranty issues (25%). In addition, the highest percentage (36%), consider claims arising from construction defects to be the most costly. However, a much lower percentage (13%) rank warranty issues first in terms of cost, with a higher percentage (19%) selecting subcontractor defaults as the most costly instead. (Dodge Data Analytics, 2017)
General contractors have a more diverse set of risks: Subcontractor default, termination or failure is by far the most frequent and most costly type of dispute/claim experienced by GCs. Claims arising from construction defects, while only selected as most frequent by 18% of GCs, are considered most costly by 27%, suggesting that this is also a notable problem that GCs need to address. (Dodge Data Analytics, 2017)
Assessing luxury construction defects involves a fascinating array of possibilities depending on the nature of the work, and its context. If you’re an attorney whose firm specializes in construction litigation, surely you have a leg up on the competition, and you already know what to look for in terms of evidence, and seeking an expert. It is more difficult for attorneys who don’t specialize in construction to decide on the right expert to seek. Yet, even for seasoned construction attorneys, when high end or luxury construction defects are in question, the technical prowess often exceeds the capabilities or ‘bandwidth’ of their expert roster.
In heavy construction, several criteria are used to measure the most basic defects; for example, controlled inspections – such as engineer’s welding inspections, or concrete compression tests. These inspections are commonplace on larger, primarily public sector, projects –core and shell (structural concrete and steel, curtain-wall, utilities, and main risers for HVAC, electrical, plumbing, and fire-suppression, but less common on smaller projects.
‘High-end residential’ also refers specifically to a subjective hierarchy of quality and efficiency of project delivery in the renovation, remodeling, and updating market.
Custom high-end residential construction must be differentiated from luxury residential construction: whereas both niches are in the top price tier, luxury construction nowadays refers to condominiums with fit-outs designed by name brand architects and interior designers. The units all receive the same treatment. Such standardization keeps schedules moving forward and luxury construction defects to a minimum. There is a little time or interest in customizing luxury developer work, as customization simply slows down the cycle.
Thus, cases involving homeowners are particularly problematic for attorneys to negotiate. One reason for this is that most homeowners don’t have a substantial comprehension of the mechanics of the construction process, and especially of the mediation process. It is incumbent on the attorney to educate their clients, so to alleviate the unnecessary attendant anxiety. Savvy attorneys know how to involve their experts in such a way that they and their clients are given a rounded education of the nuances of construction claims, and their particular case. Attorneys who rely on their own experience are limited in their ability to educate their clients to the level that their expert would.