Legislature enacts more reform of condominium litigation

By Steven G. Wraith

The Washington Legislature has passed Engrossed House Bill 1848, a new statute intended to improve the quality of condominium construction and to reform construction-defect litigation involving condominiums. The statute went into effect August 1, 2005.

In 2004, the Legislature found many problems in the condominium-construction industry in Washington. Condominium owners endured water intrusion and other defects. Court decisions expanded the scope of coverage for such defects beyond the insurers' expectations. As a result, insurers were leaving the condominium market. Contractors faced higher premiums for less coverage, if they could find insurance at all. These problems were causing a decline in the condominium market, hampering the Legislature's intent to expand ownership opportunities for low-income families and for growth management.

The Act applies to certain defined "multi-unit residential buildings," which include any building with more than two attached dwelling units. The Act does not apply to hotels, motels, dormitories, care facilities, floating homes, attached dwelling units on a single platted lot, apartments, or detached townhomes. The Act applies to existing and new construction and to condominium conversions after August 1, 2005.

The portion of the Act that addresses construction quality sets new requirements for building permits for new construction or substantial repair of a condominium. Builders now must submit a building-envelope design that an architect or engineer has stamped and approved. The act also requires periodic inspections of the building envelope to obtain a final certificate of occupancy. These inspections require testing for water-penetration resistance and reviews of as-built construction. The inspector must certify that the as-built construction complies with the design documents.