The construction industry in Texas is booming, and while this has many positive effects, it has also given rise to an increase in construction defect lawsuits. Many of these lawsuits arise from multi-family construction projects, particularly condominium projects. A recent Texas Appeals Court decision, however, reaffirms statutory barriers to construction defect lawsuits arising from condominium projects.
Mosaic Residential N. Condo. Ass’n. Inc. v. 5925 Almeda N. Tower LP went before the Houston First Court of Appeals, which affirmed the district court’s summary judgment dismissing a suit brought by a residential condominium unit owners’ association against the builders and developers of a new high-rise project. The lawsuit arose out of water damage that occurred to only 29 out of the condominium’s 394 units. The Appeals Court decided the condominium association could not file a construction defect lawsuit on behalf of its unit owners; and, instead the cost of litigation would be borne by the individual unit owners.
While at first glance this ruling might seem unimportant, it actually has serious implications if upheld. This ruling goes hand in hand with Texas Property Code §§ 82.119–120, which was introduced in 2015 to provide guidelines and rules regarding how condominium owners associations, homeowners associations, and other associations could file construction defect lawsuits.
Texas Property Code §§ 82.119–120 outlines specific procedures for pre-suit activities, such as obtaining an inspection from a third-party licensed engineer, holding meetings for members of the association, and taking votes to obtain approval from members. In addition, Texas Property Code §§ 82.119–120 also includes clauses regarding arbitration, denoting when associations are required to pursue arbitration over litigation.
When you combine Texas Property Code §§ 82.119–120 and the latest appellate court ruling, you have very specific circumstances in which a construction defect lawsuit can be filed when it involves any type of owners association. By specifying the conditions under which associations can file lawsuits on behalf of their members and placing the cost of litigation with individual owners under certain conditions even meritorious lawsuits will have an extremely hard time getting filed.
Lawyers For The Construction Industry
The construction industry and the real estate industry will still face disputes over allegedly defective construction. Owners and contractors both need an experienced law firm that knows the minute details of the Texas Property Code and all relevant rulings. At MehaffyWeber, our construction defect attorneys have a long track record of success. Contact us today to schedule an appointment to see how we can help with your construction defect claim.