Any board or manager that arranges for a contractor to come onto their property to do a project or render a service always hopes that the job will be done well, or that the service will be delivered exactly as expected. While the majority of contractors and service providers perform their jobs with no problem, meeting or even exceeding their customers' expectations, sometimes that's not the case. Jobs may be left unfinished, or may be done improperly—and that can result in serious problems for the HOA down the line.
There are many legal safeguards in place to protect associations and their residents from defective workmanship, and to ensure that contractors are properly licensed and will do the work correctly. In New Jersey, thanks to a statutory warranty guaranteeing that development projects will be free from construction defects, associations have the right to sue developers for defective construction in all new condominium projects.
Another way HOAs are protected is through the Home Warranty and Builders' Registration Act. "[The act] protects new home owners, and has certain standards and guidelines of what things the builder is supposed to comply with," says attorney Greg Dyer of the Newark-based law firm of McCarter & English. "The regulations get very specific in identifying deficiencies and giving the homeowner certain warranty rights. There are certain items in a condominium unit that will only have one-year warranty, certain items get two years, and major features can have up to 10 years. It gives homeowners warranty rights."
That said, Dyer warns that if your association does make a claim on the warranty under the Builders' Act, you waive your right to sue the builder later in court for the problem— you'll have to abide by the decision of a government-appointed arbitrator.
"The warranty administrator will appoint an arbitrator to hear the complaint," says Dyer. "In one case I had, they ruled that the builder was at fault, but there was no money awarded. The builder just had to redo the work."