Whether your existing portfolio includes real estate, or you wish to expand in that direction, buyer beware always applies. Though real estate can be a stellar investment for the mid or long term, some opportunities may not be as beneficial as they are advertised. Never is this truer than when a property is besieged with construction defects that require costly repairs or full replacement.

In the worst case scenario, when a building must be unexpectedly razed, the investor takes a huge hit on the originally assessed value of the building and in addition must pay the costs of demolition. Subsequent to that, the investor must make the decision of whether or not to rebuild. All told, if the investor did not have legal protections in place before the real estate transaction, their ability to successfully gain relief from the seller may be limited.  

Prior to investing in commercial real estate property, the investor may be wise to consult a lawyer, like a real estate appeals lawyer. Based on their recommendations, provisions can be added to the terms of the sales contract that protect the buyer in the event that catastrophic construction defects are discovered post-closing.

Construction Defects in New and Old Construction

Though it may be more common to experience construction defects in newer buildings, this is not always the case. For instance, defects in structural design may not be apparent until some degree of settling has occurred, or there is a natural event such as an earthquake. When drywall and other coverings are revealed, construction and design defects may emerge. Though the buyer’s construction defect lawyer may have to limit the reach of the contract language, particularly in the length of time a clause may be applicable, their expertise can still prove invaluable.  

Litigation and Legal Representation

If the presence of a construction defect becomes known after the sale and is not covered by the terms of the sales agreement, the buyer may still have legal recourse. This is particularly true if the seller was aware of the defect but did not disclose this information to the buyer. A skilled construction defect lawyer can advocate on behalf of the investor, and should be aware of all applicable state, local, and federal laws that apply to the case at hand. If there is cross-litigation such as a premises liability claim against the investor regarding an accident on their property, it may be essential to prove that the previous owner did not disclose knowledge of catastrophic construction defects. The investor’s lawyer may need to call upon the testimony and knowledge of a forensic engineer and other construction experts. Having such sources within their network can make all the difference in courtroom litigation and settlement negotiations.

Construction Defects are Not Uncommon

A property may have been built using sub-standard materials, or using designs that do not meet local building codes or special requirements such as earthquake or flooding mitigation. If soil movement is unaccounted for, it can result in significant erosion, settlement, or other issues that can greatly affect the building’s structural integrity.