The 15 Month Trap in 2-5-10 Warranties
John G. Mendes, Partner
Phone: 604-685-4822
Email: jgm@lmlaw.ca
As every strata manager knows, 2-5-10 warranties have deadlines for reporting defects to the warranty provider and builder. The first deadline in common property warranties is a 15-month deadline for reporting any “defect in materials and labour” and any Building Code defect that presents a hazard or is likely to cause damage. There is also a one-year deadline for reporting strata lot defects but that is a topic for another day.
This 15-month deadline presents a trap for strata managers and owners for a few reasons:
- Many owners are unaware that their warranty, described as having 2, 5 and 10-year deadlines, also has an important 15-month deadline. Some strata councils allow this deadline to expire, oblivious to the fact that they are forfeiting a significant legal right.
- Owners don’t take control of strata council until their first AGM, which can be held months after 15-month warranty coverage has begun. They may therefore have only a few months to investigate whether their development has any defects, and to deliver a defect notice to the warranty provider and builder. This brief window of opportunity will be closing during a period when rookie council members are adjusting to new responsibilities and dealing with a variety of issues. Warranty reporting may be lost in the shuffle.
- Defects that loom large as a condominium ages usually appear trivial at the 15-month mark. Parkade and foundation leaks provide a good example. Buildings may go through only one rainy season during their 15-month coverage. Leaking into a foundation or parkade may grow exponentially as a building settles over time. A 15-month defect notice can overcome arguments sometimes made by warranty providers to deny building envelope and structural defect claims. But the investment required to prepare a 15-month notice often appears unwarranted when problems seem isolated and limited.
A couple of precautions should be taken to avoid this trap. The first is to alert strata council to the 15-month warranty reporting deadline in their common property warranty (or deadlines if there is more than one warranty).
A recommendation should also be made to have a qualified consultant review the performance of the condominium’s building envelope and prepare a report. The investigation should be extended to any other building systems or components that do not appear to be performing adequately.
Since the countdown to 15 months is short early attention to these steps is required.
WHAT WE DO: Lesperance Mendes is one of BC’s leading construction defect litigation firms. We have successfully represented strata corporations and home owners to protect the value of their homes for more than 20 years. If you have an unresolved claim on a 2-5-10 Warranty or any other building defect claim, contact John G. Mendes at 604-685-4822 or jgm@lmlaw.ca.