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November 10, 2022
Nearly 10 years into an unprecedented building boom, Seattle continues to ride a wave of economic prosperity.
Since the end of the Great Recession, growth in tech and health care companies — coupled with low interest rates — have fueled construction spending that translates into residential and office projects in the Emerald City.
Rider Levett Bucknall, a construction consultant, reported last month that Seattle kept second place in the U.S. fixed crane count, behind Los Angeles.
But with more cranes and new construction could come more construction defect litigation, according to Tyler Berding, founding partner of Berding & Weil LLP, a Walnut Creek, California, law firm.
At the risk of raining on Seattle's parade, Berding said this week that a perfect storm of a tight construction labor sector and a massive infusion of developer spending could spell trouble in the area of construction defects for years to come.
Time will tell, he said, whether issues that emerged during pandemic-era construction — such as delays when COVID-19 first hit — will have an effect on construction defects.
“Low interest rates and low inventory give rise to high demand, which encourages builders to rush product to the market without adequate quality control or sufficiently trained labor,” Berding said. “The quality issues may take a few years to manifest themselves but as they do, owners begin to experience leaks, mold, rot and other building issues that are expensive to repair. Builders typically will not adequately repair these defects, or do it in a substandard way, which leaves owners with little choice but to retain counsel to sue the builders for necessary repair funds.”
Multifamily buildings, Berding said, are complicated to build. There are many joints that must be sealed, window openings that must be flashed properly and waterproofing systems that must be assembled properly. This takes training, experience and familiarity with various components to do it right and prevent moisture from entering the building.
Structural elements, like shear walls, must be installed correctly in all the right places to provide structural stability, he said. Building products like foundation anchors, windows and caulking materials must be installed strictly in accordance with manufacturer's specifications to be effective.
“This takes a lot of training and experience to do these tasks well,” Berding said. “When the labor market is tight, especially as it has been the past two or three years, trained workmen and women are hard to find, so substitutes are often recruited,” he said. “Labor untrained in specific trades cannot be relied upon to perform them correctly and there never is enough supervision to watch over every worker.”
Many of the liability-causing issues, he said, have emerged recently as the United States recovers from pandemic-related supply disruptions.
“When the supply chain is interrupted, the usual building materials can be in short supply,” he said. “When that happens, builders search for replacement products that may not have the same quality. Builders will substitute artificial stucco for the real thing, foam appliques for exterior trim details instead of wood or concrete, and cheaper grades of sheathing for plywood. These shortcuts and substitutions usually result in failures that show up as leaks, cracks, and deterioration in the short-term; and rot, mold and other compromises to building safety over the long-term.”
Berding said long-term decay or other deterioration exists in building locations that are not easily detected in normal inspections. He cited a 2015 Berkeley, California, incident in which six students died from a balcony collapse. He said the rot that destroyed the balcony structural supports of a multifamily building in Berkeley was caused by moisture seeping into a joint where a balcony adjoined the building and trapped vapor rotted the supporting beams.
In the Champlain Towers collapse in 2021 that killed 98 occupants in Florida, Berding said, “It appears that moisture seeped into concrete that was not adequately waterproofed and corroded the reinforcing steel. Casual inspections did not catch these problems or similar, but less catastrophic problems in many buildings. Even when serious damage has been identified, owners are reluctant to tax themselves for the cost of making proper repairs. Condominium buildings specifically have serious funding problems because their boards of directors are reluctant to impose unpopular assessments necessary to pay for damage that has been hidden for decades.”
Though these cases took place in California and Florida, Berding said Seattle and its heavy seasonal rain present potential issues for construction liability.
Every moisture-related defect is exacerbated in a high humidity environment, whether it is in the Northwest, or more tropical areas like Hawaii, he said.
“In wet or high humidity areas, like Seattle, vulnerabilities in a structure, like mis-lapped building paper or inadequate window flashing will result in rot and mold becoming apparent faster than in drier, less humid areas,” Berding said. “Moist or rainy climates also can make drainage problems around buildings worse, and the frequency of rain will put more stress on vulnerable building assemblies that have not been adequately waterproofed. Regular or heavy rainfall in areas like the Northwest will expose poor quality construction much faster than in dry, less humid areas because water intrusion into sensitive areas of a building will have less time to dry out and may remain wet indefinitely leading to advanced stages of rot and mold.”