Within the construction defect industry, we sometimes joke that the repairs proposed by some parties represent a much more costly approach than is truly necessary to solve a particular situation. You might hear comments like “that’s the Cadillac repair” or “how can this be so expensive — what are they trying to do, gold plate the building to keep leaks out?”

So when I learned that there was an artist using gold to fill cracks as part of a new installation, I couldn’t help but take a closer look. Allison Meier, writing for Hyperallergic, highlighted the work of Rachel Sussman inspired by an ancient Japanese art form known as kintsukuroi. (more…)

Housing shortages abound throughout the modern world, and in the UK, the situation is not much different than here in the US. Also not much different: substantial claims of defective construction due to cut corners in an effort to meet demand.

In fact, the country’s National House Building Council, which provides 10-year warranties covering most newly constructed homes, reportedly paid out £90-million (US$110,852,100) to homeowners in 2015-2016. According to the Guardian, this is nearly triple the amount paid to resolve claims from a decade before. Here’s more on the story:

This week the Guardian reported that Bovis is set to award people who live in some of its newbuild homes a total of £7m in compensation, in response to claims that houses have faulty plumbing or wiring, missing insulation, and other serious defects. Some people say they were offered money to move into homes that have not been completed. When the news broke, the Bovis share price fell by 10%, wiping £100m off its stock market value.

This is just one part of a bigger story of complaints about Britain’s construction giants – and what happens when the rush to build leads to corners being cut and houses left either unfinished or deeply defective. On social media there are hundreds-strong groups telling their personal stories: “The toilet leaked into the living room and when my plumber came to fix it he found the toilet had not been installed correctly”; “having my kitchen ripped out for the second time”; “no insulation in roof”; “mould growing all over the house … too dangerous too live in as I have asthma”.

Meanwhile, the pressure is on to build as many new homes as possible. Even if it is behind on its targets, the government still wants a million to have been put up by 2020. The year 2015 saw a big jump in completed builds: 142,890 homes were finished, a 20% year-on-year increase. Last year the number was put at more than 150,000.

So this is satire, just to be clear… John Frank Weaver, writing for the always hilarious McSweeney’s, offers a wonderfully hand-crafted glimpse into the imaginary life of an Artisanal Attorney.

Weaver opens his piece with the question, “Are you tired of large corporate law firms making the same cookie cutter litigation?” (I know that I am not alone in the construction defect industry that immediately thinks of one law firm in particular upon reading that question.

How is an artisanal attorney different from any other attorney? Like other artisans, I pay close attention to my ingredients and process; I am intimately involved in all stages of creation. Other attorneys print their documents on paper they buy in mass-produced boxes, tens of thousands of sheets at a time, using ink that mechanically jets onto the page. I make my own paper by hand, using the traditional methods of 14th-century book publishers, who printed their works on linen and vellum. The flax for the linen grows along the sides of a nearby swimming hole, and the plants’ growth is influenced by the laughter of children in the summer, when I pick it by hand. The vellum comes from the grass-fed cows of an area farm; to give the cows more agency in the vellum-making process, I let them choose the pumice I will treat their hides with after slaughter. I also make my own ink, using the ink of squid I raise myself in a PETA-approved salt-water aquarium in my office. You can meet all my squid during our initial meeting and pick which one you want for the ink on your will or healthcare power of attorney…

Don’t be lulled into a complacent life filled with more cheap, manufactured goods than you’ll ever need and lawsuits that don’t reflect your uniqueness. Insist on a life well-lived with food, experiences, and litigation that reflect people and skills, not factories and automation. The next time you need to settle a boundary dispute with your neighbor, consult with me – I’m your artisanal attorney. You can find me on Bedford Avenue, in between Ruby’s Fluoridation-Free Fire Sprinkler Installation and Otto’s Mustache Groomery.

Source: McSweeney’s

My wife and I have been lucky to have three kids that (so far) haven’t ever played with fire, or knives, or consumed dangerous cleaning supplies, or anything like that. It didn’t take burning down the house, stitches, or stomach pumping to teach each of them the danger inherent with certain things—a quick touch to a hot oven provides instantaneous feedback.

This is the primary concept of the feedback loop, explained by Wired Magazine: (more…)

The Leadenhall Building at 122 Leadenhall Street in London, also known affectionately as the Cheesegrater due to its unique shape, is 47-stories tall and is the UK’s 4th largest building. Featuring a cutting edge high-performance building envelope incorporating passive heating and cooling elements, 85% of its construction took place off-site, making it one of the largest and most complex prefabricated projects to date. (more…)

Tamara Boeck, writing for the Stoel Rives blog, Ahead of Schedule, has written an excellent analysis on a very important appellate decision in the state of California. The case: Regional Steel Corporation v. Liberty Surplus Insurance Corporation (PDF) (May 16, 2014, No. BC464209) Cal.App.2d. [2014 WL 2643242]

The facts of this dispute are not unfamiliar, and could be substituted for many projects by changing the name, location, and nature. Here, the owner/GC of a 14-story mixed-use apartment project hired a subcontractor to erect the steel and another subcontractor to pour concrete.

The owner also retained Quality Assurance, presumably, to do just that. As a part of the construction process, the steel subcontractor (Regional) submitted shop drawings during a four-month period. The owner/GC and the owner’s engineer approved the drawings, which identified two types of seismic hooks. Four months after the last shop drawing approval, the City issued a correction notice requiring the exclusive use of only one type of hook. The owner became aware of the problem four months after the correction notice, and thereafter stopped further concrete pours until the hook issue was resolved.

The City then notified the owner/GC that the first three levels and part of the fourth level of the building had defective hooks and required repairs. The owner/GC withheld $545,000 of Regional’s progress payments as a result. Not surprisingly litigation followed, including a claim against Regional for the defective hooks, the engineer for approving the shop drawings, the concrete subcontractor for not catching Regional’s error, and Quality Assurance for, well, not providing quality assurance.

The owner/GC alleged that it was damaged because completion of the project was delayed, resulting in loss of use, loss of rental income, and other damages. Thereafter, the owner/GC filed a first amended cross-complaint adding claims based upon theories of negligence and negligent interference with economic advantage, and asserted claims against the parties’ performance bonds.

Ultimately, the insurer denied coverage for Regional (the contractor) because there was no evidence established of resultant damage. This is a critical element in construction defect claims in the state of California, and unfortunately, poorly understood in the building industry outside of the realm of construction defect litigation.

The actual workmanship of a contractor is not covered by standard CGL policies, unless it results in damage to another component. According to the Court in this case, “The risk of replacing and repairing defective materials or poor workmanship has generally been considered a commercial risk which is not passed on to the liability insurer.”

Lessons Learned; Best Practices

Boeck offers some recommendations for both owners and general contractors, stating that this case highlights some important concepts:

  1. The importance of good project contract documents
  2. The importance of good “hands on” project risk management
  3. The importance of understanding what insurance covers
  4. The importance of bonds
  5. Considering coverage in claims

Back to the “Quality Assurance” issue…

I just want to point out that in this project, “the owner also retained Quality Assurance, presumably, to do just that.” I have been involved with a number of cases recently where third-party “quality assurance” had been retained, yet failed to live up to their stated goal of actually assuring quality.

As Boeck says:

[W]hy didn’t anyone catch the hook error until the fourth floor had been built? Paper management is one thing, active and effective quality control is another. Even if the “catch” wasn’t in the shop drawing phase, there were plenty of potential “eyes” that could have caught the error on the first floor and saved substantial time and money. I’m sure everyone is grateful the “catch” wasn’t delayed until the 13th floor, but were there qualified personnel randomly verifying basic work?

Not all QA/QC companies/approaches are created equal. In the ensuing weeks and months, expect much more digital ink on this important topic.

Please take the time to read all of Boeck’s article, as I think it is an outstanding analysis on a crucial issue impacting California’s built environment.

Source: Ahead of Schedule


Construction_work_on_the_Millennium_Tower_(301_Mission_Street),_SF

Image courtesy Wikimedia

My colleagues and I from Xpera Group will manning the booth at the 2014 PCBC show. The event takes place June 25th and 26th at San Francisco’s Moscone Center, and is billed as “The Art, Science + Business of Housing.”

If you are attending this year’s conference, make sure to drop by the Xpera Group’s booth on the main exhibit floor.

We will be showcasing our new Real-Time Quality Assurance Reporting tool called InSpec®. Available for iOS and Android devices, the software is also available as a web application.

The real power of InSpec® isn’t necessarily the technology behind it—what makes the app special is the way in which it facilitates communication. Xpera’s QA team are able to get the right information into the hands of the contractor immediately, so that they can make better informed decisions.

If you are interested in seeing how InSpec® fits in with our comprehensive Quality Assurance offerings, stop by our booth and ask for a demo, or drop me a line and I’ll try to set something up.

To paraphrase Gary Vaynerchuk (who will be the keynote speaker on Thursday morning):

You, with a little bit of me, are going to change the construction industry, whether they like it or not.


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I just got done posting my first news update for the Xpera Group website. The title: The Next Wave of Condominiums and Other Updates. The article contains a number of updates which I’d like to highlight here.

The Next Wave of Condominiums

Our resident Economist, Market Research Analyst and Forensic Expert, Alan Nevin wrote an outstanding article on multifamily housing in California. He notes that there is typically a five to eight year delay between when a condo project is constructed and when litigation is likely to occur.

Of the 57 condo projects built in San Diego from 2000 to 2007, 41 ended up in litigation and of those, Xpera was retained for expert services on 32. After 2007, new condos and conversions stopped almost completely. According to Nevin:

My take is that new condominium development and conversions in California most probably will gradually ramp up during the next several years, but most activity will be in the Bay Area and western Los Angeles. I do not anticipate that condominium activity will reach the levels of the past decade. In fact, I project that the levels in the 2010-2020 period will be less than 50% of what we saw in the last round.

From Litigating the Boom to Litigating the Bust

Xpera Group founder and president Ted Bumgardner wrote an article that picks up where Nevin’s article leaves off:

Back in 2011, we discovered an interesting correlation between residential permits issued in California and defects lawsuits filed six years later. Between 1995 and 2006, we saw the number of residential building permits issued in California double in volume. According to Westlaw, the number of construction defect cases filed in California doubled from 2000 to 2011, similar to the growth that occurred in residential construction, just shifted five years.

He notes that in 2005, towards the end of the residential building boom in California, 155,000 permits were issued. That number dropped 86% by 2011 to just 22,000 housing permits. However, there was only a 26% drop in construction defect lawsuits filed from 2012 to 2013.

Why is that? According to Bumgardner, “we have now moved from litigating the boom to litigating the bust. Over the next few years, several factors will affect the number of homes ultimately ending up in defects litigation.”

Source: Xpera Group News