Newsletters

Didn’t Build? Why Are you Being Sued for Defects?

SAN DIEGO-Broken residential projects make attractive targets for real estate investors seeking to take advantage of low prices, but these projects come with a hidden cost.

By Lynn Borkenhagen | Updated on June 11, 2010

SAN DIEGO-In today’s market, broken residential projects make attractive targets for real estate investors seeking to take advantage of low prices for distressed properties. However, these projects come with a hidden cost that might not surface for years: construction defect liability. Residential projects in California are notorious for being the target of construction defect claims. If a purchaser of a residential project does not consider and properly prepare for potential homeowners’ defect claims, any profits can quickly vanish.

Even after the enactment of SB800, California’s “right to repair” law, some potential homeowners’ defect claims do not expire for 10 years. Professional residential developers are very aware of these risks and plan accordingly from the inception of a project. However, often buyers of broken projects are real estate investors who plan to perform only a bit of cosmetic “refreshing” before selling units, or who intend to complete only minor construction on nearly completed units before selling them, and as a result may not consider the potential for later claims by homeowners.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

Unlimited access to GlobeSt and other free ALM publications
Access to 15 years of GlobeSt archives
Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
1 free article* every 30 days across the ALM subscription network
Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account? Sign In Now

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Resource Center

CRE strategies and business decisions are only as strong as the data that powers them, and that data better be correct. This self-assessment will help you gauge your current data management capabilities.

Assessment

Sponsored by Cherre

Data Management Scorecard: A Health Check for Your Data Management Capabilities and Challenges

CRE strategies and business decisions are only as strong as the data that powers them, and that data better be correct. This self-assessment will help you gauge your current data management capabilities.

Browse More Resources ›

CRE strategies and business decisions are only as strong as the data that powers them, and that data better be correct. This self-assessment will help you gauge your current data management capabilities.

Assessment

Sponsored by Cherre

Data Management Scorecard: A Health Check for Your Data Management Capabilities and Challenges

CRE strategies and business decisions are only as strong as the data that powers them, and that data better be correct. This self-assessment will help you gauge your current data management capabilities.

Browse More Resources ›

Does your data inspire confidence or is there a significant lack of trust in its validity? Use this assessment to gauge where your organization’s data practices are at today and what gaps exist.

Assessment

Sponsored by Cherre

Enabling Stakeholder Confidence in Your Data: A Self-Assessment for Real Estate Organizations

Does your data inspire confidence or is there a significant lack of trust in its validity? Use this assessment to gauge where your organization’s data practices are at today and what gaps exist.

Browse More Resources ›

GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
Exclusive discounts on ALM and GlobeSt events.
Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now

Copyright © 2024 ALM Global, LLC. All Rights Reserved.