Don’t Underestimate the Importance of Repair Estimates When Evaluating Your Construction Defect Claim

Investigating and placing potentially responsible parties on notice about the existence of construction or design defects against Developers, Contractors or Design Professionals in accordance with Chapter 558, Florida Statutes, is an important part of the claims process. As their defect claims progress, Individual Property Owners and Condominium Associations may need professional assistance from their attorneys and design consultants in calculating the potential costs to correct construction or design defects.

There are many other reasons why Owners or Associations would want to obtain repair proposals or estimates. For example, while repair estimates may help Owners and Associations budget for repairs, they may also help Owners and Associations to prioritize their claims for settlement purposes. Repair estimates enable Owners and Associations to identify any defects they may wish to withdraw from their Ch. 558 pre-litigation construction defects claims, or from litigation, during the course of settlement negotiations.

When negotiating a settlement, repair estimates are a valuable tool for attorneys to use in quantifying their clients’ settlement demands better and evaluating the economic value of any settlement offers for money or repairs which they may receive.

Sometimes, repair estimates can be used to show how a party’s monetary demands were calculated. Settlement meetings and mediations are usually more productive when all of the parties have a better understanding of an Owner’s or Association’s expectations as to what its construction or design defects claims may be worth, and how these amounts were derived.

Repair estimates may also identify portions of the claim that need further investigation or testing, such as when an Association has identified a few examples of a particular defect, but is not sure how widespread the problem actually is.

When obtaining repair estimates, Owners and Associations should consult with their attorneys. They should work together to obtain repair proposals from reputable, Florida licensed contractors or design professionals. Whenever possible, Owners or Associations should also try to procure multiple repair proposals for each defect. Doing so may illustrate whether there is a significant range in the Owners’ or Associations’ potential damages.

Ideally, repair estimates should include the scope of work, as well as costs for any permits, code upgrades, or design specifications which may be needed to effectuate the repairs. If the Owner or Association is working with a professional engineer or other design consultant, it should include the consultant in the bidding process. Among other things, a consultant can review the proposed repair methods, locations, materials and costs, and make recommendations for changes to protect the Owners’ or Associations’ interests.