Iowa Skyline

Iowa

Protect valuable property rights in the event of construction defects and the resulting damage to your condominium or townhome project.

Frequently Asked Questions

1) What rights do associations and their unit owners have when there are defects in the construction of a condomnium, townhome or other residential dwelling?

A. There is an implied warranty that a newly constructed dwelling has been built in a good and workmanlike manner. A developer is liable if that warranty is breached.

2) Is the implied warranty for the benefit of any unit owner or just unit owners who purchased from the developer?

A. The implied warranty of construction quality is for the benefit of both initial purchasers and subsequent owners.

3) Can a developer eliminate any implied warranty of construction quality by disclaiming any such warranty in sales documents?

A. No Iowa Appellate Court decision has answered that question. However, a court will probably require a developer to satisfy specific requirements before it will enforce such a disclaimer. The courts have not yet decided what exactly those requirements will be.

4) Does a claimant have to notify the developer of the warranty breach before the claimant can take legal action?

A. Yes. In fact, a claimant must give the developer notice of the warranty breach within a reasonable time after the breach was or should have been discovered. What is a reasonable time is usually a fact question that would ultimately have to be decided by a jury if the matter is not resolved by settlement and has to go to trial.

5) Is there a time limit within which legal action must be taken against a developer as a result of defective construction?

A. Yes. Legal action must be taken within five years after the warranty breach was or should have been discovered. However, in no event may an action be filed more than 15 years after construction.

6) Can an association sue for construction defects, or do the owners have to sue?

A. There is limited statutory or case authority in Iowa regarding whether an association can file a legal action based on defective construction or whether only the unit owners can do so. However, we believe that if the defect involves an area of the project that the association has a duty to maintain, the association probably has standing to act on behalf of the unit owners. If it is not clear whether the association has standing to act for the unit owners, the unit owners could assign their rights to the association. Such assignments should have the effect of removing any doubt that might otherwise exist as to association standing to act for the unit owners.

7) What is the likelihood of resolving a construction defect claim without having to take legal action?

A. It depends on the claim. A developer is far more likely to resolve a small dollar value claim without a lawsuit than a claim involving a defect or defects that will be very costly to correct.

8)  If legal action must be taken, what is the likelihood of settling the claim without a trial?

A. Over 90% of all civil cases are resolved without trial. This would also apply to construction defect litigation. Most defect lawsuits settle before trial.

9) What if the developer is no longer in business or has filed bankruptcy?

A. Most settlements are funded by the insurers for a developer and its contractors. The fact that an insured has gone out of business or bankrupt will ordinarily not affect the obligations of an insurer under its liability policy. Developer and contractor insurance coverage for liability arising out of physical damage caused by faulty work has not yet been clearly decided by the Iowa Supreme Court. However, the trend in recent years in Supreme Court decisions in other states has been in favor of coverage except where specific endorsements eliminate that coverage.

10)  What if the association can’t afford to hire an attorney on an hourly basis?

A. An attorney may be willing to represent the association on a contingent fee basis. Our law firm handles most of these types of claims on a contingent fee basis.

  • Contact Us

    Levin Law Group LLP

    Richard Levin
    Director of Client Relations
    rlevin@levinlawgroupllp.com

    5550 Wild Rose Lane, Suite 400
    West Glen Town Center
    West Des Moines, Iowa 50266
    Phone: 877-786-9990
    Fax: 877-676-5406