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Construction Defect Ruling Hits Developer and Architect with $10 Million Penalty

In a highly publicised court case involving non-compliance with fire costs, the developer of a New Jersey condominium development and its associated architect firm are now facing a construction defect verdict worth $10 million US.

The Grandview I at Port Imperial Condominium Association, which is situated along the Hudson River, was designed by RTKL New Jersey Architects and developed by K. Hovnanian, a subsidiary of Hovnanian Enterprises. The lawsuit that led to the construction defect ruling alleged that the building was constructed in a manner that did not comply with current fire codes. The condominium association, which was the plaintiff in the case, accused the developer of knowing about the non-compliance and failing to disclose the information to buyers.

The attorneys for the condominium association argued that the architect had designed the six-storey Grandview I with sub-flooring made of plywood although it was required by code to have concrete floors.

The firm later warned K. Hovnanian that to comply with the fire code, the building would have to be reclassified to Type 3 from Type 2.  This reclassification would have permitted plywood to be used if the structure’s exterior walls, which were made from steel with brick veneer, were reconstructed with the masonry walls required by code.

Specialists in Construction Insurance

The building code has five different category types for buildings, ranging from Type 1, which is the most fire-resistant (using a skyscraper) to Type 5, which is usually a wood-framed home.

The defense team argued that plywood flooring did not represent a life-threatening problem, since exits and fire alarms would allow everyone inside to safely vacate the building. While the condo association's attorneys conceded that the threat to the lives of the residents was minimal, the code violation could result in more damage to the property.

After attorney fees are awarded in this construction defect ruling, the grand total could reach $20 million US.


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