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The 10-Year Implied Warranty on Public Bond Project Construction

Presented By: Karim Allana, PE, RRC, RWC and Ritchie Lipson, Esq.

Most bond projects are protected by insurance and performance bonding which can pay for faulty construction, leaks, damage, code compliance issues, etc. for up to 10 years. While contractors will often provide a 1-year warranty, the contractor’s bonds and insurance companies are on the hook for up to 10 years.

This seminar will cover case studies of public projects that had construction issues, the common types of construction issues to be on the lookout for and how to invoke the bond and insurance to get the repairs completed.

There is a 10-year implied warranty on new campus bond projects, but identifying and resolving construction defects within that timeframe can be problematic and expensive. It is important to proactively identify potential defects before the implied warranty (and statute of limitations) expires.

With the recent and imminent completion of new bond measure projects, campus officials and facilities personnel are responsible for holding their design and construction teams accountable for construction related issues and protecting the District’s investments. New buildings often have a 10-year statute of limitation for hidden or latent defects. Claims for known or patent defects have a statute of limitations of up to three or four years.

Many common construction-related issues are concealed and may take many years to manifest themselves, often longer than 10 years. Small leaks and problems are often overlooked and contractors often blame the owner for lack of maintenance or tell you that the problem is “out of warranty”. Small leaks and minor issues may be the tip of an iceberg. If left unresolved for 10 or 20 years, they can lead to millions of dollars’ worth of repairs. Understanding how to identify these potential issues and your rights under this law is critical to protecting the District against future costs that may not be covered after the insurance expires.

This presentation help building personnel understand and identify common construction defects Allana Buick & Bers is observing in newer academic buildings and how to resolve them before the implied warranty expires.

This presentation will also review best practices for performing in-house facility assessments to identify and document issues, and how to work with the Developer/Builder to resolve the issues within that time.

Common new construction defects include water intrusion and leaks, ADA-type issues, mechanical system issues, fire resistive construction and control systems, window glass fogging, window finish or noise issues, leaking and other glazing issues, and air conditioning system issues.

Learning Objectives:

Understand the 10-year implied warranty for major items and statute of limitations for defect litigation
Understand how to recognize common issues in new construction including:
- Windows fogging, noise, leaking, finish and other glazing issues
- Air conditioning system issues
- Roofing and waterproofing issues
- Stucco/façade related issues
- Fire suppression system issues
- Plumbing issues like hot water delivery
Learn how to conduct your own inspections to recognize and document issues (and what is involved in a third-party building inspection).
Learn how to approach the developer/builder to resolve problems