Pennsylvania Lawsuits Involving Defective Leaking Stucco Homes

Filed under: Litigation Tags: by Steven F. Fairlie @ August 10, 2011

You purchase your dream stucco-clad home from a “reputable builder”. Everything goes according to plan and you and your family move in to finally enjoy the fruits of your labor. However, as time passes your dream home quickly turns into a nightmare. Perhaps it started with one leaky window or skylight.  Then you saw scaffolding erected around your neighbors’ homes.  Now, an engineer is telling you that you have massive water infiltration and recommends all the stucco be removed so the underlying damage can be remediated.   You and your family endure months of construction—constant dust, noise, workers coming and going, scaffolding and “porta-potties”.  Worst of all, you are left with a six-figure bill and are faced with a complex claim involving numerous parties, documentation and expert witnesses. You ask yourself, where did I go wrong and what do I do now?

The answer is you probably did nothing wrong. Across Montgomery County, Bucks County, and the greater Philadelphia area we are seeing an unfortunate increase in water infiltration claims stemming from the proliferation of new construction of these stucco-clad homes over the last decade.  At Fairlie & Lippy we understand this discovery may be devastating to a new homeowner who recently invested in their dream-home. We have the resources and experience to ease the burden during this process while increasing your chances of just compensation. If you have purchased a stucco home and are experiencing leaking or other construction defects like peeling or discolored stucco, contact Fairlie & Lippy. We will help you hire experts to investigate the reasons for the water infiltration, help you through the remediation process, and fight to obtain the compensation that is available to you under the law.

What causes the leaking and who is responsible? Developers, builders, subcontractors, and manufacturers alike can all be held responsible for these problems that occur primarily in the “exterior cladding system” or “building envelope” of the home. The “building envelope” is the name for the physical divider between the interior and exterior environments of a building. This would include the roof, the sheathing, wrapping, windows and doors. Water infiltration beneath the stucco system can cause major rotting that can damage the interior surfaces and framing because once the water penetrates behind the system there is no way for it to dry out.  Instead, it saturates and damages the plywood or oriented strand board (OSB) sheathing and framing, causing extensive rot and mold. 

There are various infiltration points common in these cases: 

  • Through the stucco system itself. As mentioned, stucco is a “cementitous” material that is not watertight. As such, water will transfer through the exterior of the home to the underlayment, which consists of “wrapping” and “felt.” The “wrapping” is a paper that is designed to prevent outside water from entering the walls. The “felt” is asphalt saturated and manufactured to provide a second line of defense against penetration. The stucco system itself is generally supposed to be installed in three layers: the base coat, the brown coat, and the finish coat. Collectively these layers should be around an inch thick, but it is very common to find that this standard is not met in modern construction.  In addition, the “wire lath,” the name for the wire mesh that the stucco is applied to, should be nailed every 8 inches. If the stucco system is not installed correctly or is too thin, the homeowner is left with an inferior wall finish that is easier for water to infiltrate. When more water infiltrates than the underlayment is designed to handle, water infiltration to the interior environment of the house occurs.
  • Through insufficient felt. The asphalt infused felt is designed as a surface allowing water penetrating the stucco to drain down and out of the exterior of the home or to dry before infiltrating through the felt to the sheathing. Many building codes call for this felt to be “15 pound” felt. However, it is not uncommon for builders to use a felt that does not meet this standard, which would reduce the performance of this function, increasing the chance of water infiltration.
  • Through Improper “flashing” of the windows, doors or the roof line. Most codes call for flashing details at these intersections. “Flashing” refers to home wrap or other impervious materials installed to prevent the passage of water into a structure from an angle or a joint. If these details are not followed correctly, water may infiltrate through the angles or joints and leak down behind the underlayment and into the sheathing. Here, investigators will look for what is known as “reverse lapping.” With “reverse lapping,” instead of repelling water, the installation method actually channels the water into the wall cavity. Prolonged water infiltration then weakens the building structure over time until cosmetic damages become visible.
  • Through the absence of caulk and caulk joints around widows, roof and wall intersections. Wherever the stucco system meets a different surface, the two surfaces expand and contract at different rates as the temperature increases or decreases. This variant expansion creates a seam through which water can infiltrate the exterior envelope. Therefore, caulk joints and caulk should be installed to seal these joints and prevent the creation of gaps through which water can infiltrate behind the stucco system.

 How do I know if I have water infiltration? This is a common question in these cases because while water may be infiltrating your home, it may be a matter of years before this is evident by a visual inspection. Often, because of improper flashing or sealing, homeowners first observe the damage as staining of the stucco under the corners of the windows or skylights. Regardless of the area, the best way to diagnose water infiltration is to hire a professional moisture inspection company that will drill holes under windows and other likely infiltration avenues and then insert moisture probes to test for the presence of moisture.  In some cases there is no moisture found, but the experienced professional can determine that there was no resistance to the probe, indicating an area that is so thoroughly rotted that there is no structure left to retain moisture.  Other testing techniques that are more or less destructive area available, such as infrared testing and destructive cuts.

What should I do if I think I have water infiltration? Contact an experienced attorney who can help assist you through the process. The testing, and if need be the eventual removal of the stucco, are important steps that need to be performed meticulously and accurately to increase the chance of a successful settlement. Homeowners often repair their homes without sufficient documentation and without allowing a full opportunity for the relevant parties to perform an inspection, which creates a spoliation issue that can be devastating to the case. Photographs alone do not always clearly reveal the manner of the lapping or the damage to the sheathing. Thorough and documented inspections of the home during each stage are critical to assessing the source and extent of the damage. At Fairlie & Lippy we know what is needed to put on a successful case and can assure that the investigation at each stage is as thorough as possible.

 What legal theories are available? In these cases, the most common legal theories pursued in Pennsylvania include the Implied Warranty of Habitability, the Implied Warranty of Workmanlike Construction, and the Pennsylvania Consumer Protection Law.

  • In Pennsylvania, there is an “Implied Warranty of Habitability” for newly constructed homes because one who purchases a new home justifiably relies on the skill of the developer that the house will be a suitable living unit. In other words, if you knew the house would leak, you wouldn’t have purchased it! The Implied Warranty of Habitability is a powerful legal remedy because it often exists irrespective of what was included in the contract and whether or not the builder-vendor used reasonable care in the construction of the house.
  • In Pennsylvania, there is also an Implied Warranty of Workmanlike Construction for newly constructed homes. In addition to warranting that a house will be habitable (i.e., absent leaking), a builder-vendor also impliedly warrants that it has been constructed in a reasonably workmanlike manner. “Workmanlike construction” has been described as construction in accordance with contemporary community standards.
  • Lastly, the Unfair Trade Practices and Consumer Protection Law (UTPCPL) was adopted to protect the public from fraud and unfair or deceptive business practices. Here, if the builder-vendor made a representation, upon which you justifiably relied and the representation turned out to be false, you may have a claim. The UTPCPL is a powerful legal avenue because it provides for “treble damages,” or triple the amount of the actual/compensatory damages, in addition to attorneys fees. It is therefore important to speak with a well-versed attorney who can discuss your case with you and determine what legal theories are appropriate.

 What remedies are available? Determining the compensation available is very fact specific and depends on the circumstances of your particular case. Therefore, it is important to contact an experienced home-construction attorney who can personally evaluate your claim. Generally, in new construction cases the homeowner is entitled to receive what he or she contracted for, which means (1) a completed, waterproof house; (2) at the cost that you agreed to pay for it; and (3) in the time that you requested it. Therefore, you are entitled to compensation that will essentially attempt to put you in the same position you would have been in had the home been constructed properly. Other potential damages for owners include:

  • Lost profits/use
  • Out of pocket expenses such as cost of repair or the diminution of property value
  • Punitive damages and attorneys fees

 How long do I have to bring a claim? Every state has certain time limits, called “statutes of limitations,” which determine the time frame within which homeowners can file a claim. In Pennsylvania, the statute of limitations for a breach of contract or a breach of warranty case for home construction is four years. However, in appropriate circumstances, the statute of limitations may be tolled, extending the period of time in which suit may be brought.  Obviously, a person cannot bring a lawsuit for something he or she is unaware has occurred. It is for this reason that “the discovery rule” exists. The “discovery rule” tolls the statute of limitations until the time at which a person becomes aware that a cause of action exists. Under this rule a person must exercise the level of diligence that a reasonable person would employ under similar circumstances. For example, if you purchased your home in 2000, but discovered leaking in 2005—the statute of limitations would normally bar recovery for warranty claims. However, if you employed the level of diligence that a reasonable person would use given the same circumstances, then the discovery rule would allow recovery because the four year statute of limitations would not begin to run until 2005, when you discovered the defect. Consequently, it is important to contact an attorney with experience in new construction litigation as soon as possible to ensure that you receive everything to which you are entitled to under the law.  No lawsuit may be brought after the Statute of Repose has run, regardless of date of discovery.  The Statute of Repose in Pennsylvania is twelve years – the absolute latest that such a lawsuit may be brought.

There are many more important considerations and issues that should be discussed before dealing with defective stucco housing.  Sticking your head in the sand is not an option.  Talk with an experienced litigator as soon as possible to make sure that you do not jeapardize any claim that you may have.

34 comments:

  1. Very good information , as most home owners do put there heads in the sand. Instead of being proactive and getting all needed and up to date repairs done, they wait till they sell there home only to have it fail and lose the buyer and sale. It is at this time they are forced to get all needed repairs done at a higher and more stress full cost. This could easily set back the time frame 6 months or more, more damage, and a higher cost for repairs. Knowledge is power plan ahead.

  2. George Levasseur says:

    What about the situation where, before the new law, one purchased w/o knowledge of a problem; then they sell 5 years later and inspection under the new law reveals a serious problem and the signed new buyer backs out of the purchase agreement?

  3. You may well have a good claim against the builder. I would suggest that you call us to set up a consultation. Thanks, Steve

  4. Natasha says:

    Is there any possibility of recourse for homeowners with severe water infiltration issue when the builder is out of business?

  5. Even if the builder of a defective stucco home is out of business, you still may be able to recover money if the builder had insurance that covers negligent construction. This can be very hard to ascertain as builders often change carriers from year to year and it can be difficult to figure out which policy applies and what the terms of each policy are.

  6. MJB says:

    We purchased our house new in 1999. We are in the process of assessing our stucco damage, but don’t have the final information. Our next door neighbor (same time-frame, same builder) is looking at an $80k remediation.

    Are we too late? What about homeowners insurance?

  7. I believe that most homeowner’s insurance will deny these claims, but you can’t be sure unless you make the claim. I did hear of one person who got coverage after appealing the denial through state administrative agency channels. With regard to hiring us to pursue a claim against the builder, it is too late. There is a 12 year statute of repose.

  8. Shelly C. says:

    We are seeing the ‘tears’ under some windows, so we want to get the problem checked . We have owned the home 3 years, but it was built in 1996. If we find a problem, will we be able to make a claim to the builder?

  9. Like the previous inquiry below, your claim would be time-barred by the 12 year statute of repose.

  10. TJD says:

    who is actually responsible for damages? the builder, the subcontractor window installer, the stucco subcontractor, the building inspector?

  11. All parties you referenced may be found liable but you really should set up a consultation with one of our attorneys to discuss the details in depth as there are many variables that can change the potential outcomes.

  12. Michael says:

    I am purchasing a stucco home in PA. It is only 4 years old and I will be the 2nd owner. Am I still entitled to the 12 year statue of repose? Thanks!

  13. This is a great question in light of the recent case wherein the Pennsylvania Supreme Court held that a subsequent purchaser of a defective stucco home may not sue the builder for breach of the implied warranty of habitability. There may still be a suit for negligence or other theories of recovery, but they may not be as easy to prove. One method to, potentially, increase your odds of winning any case that might be necessary in the future would be to take an assignment of all rights the initial purchaser has against the builder at the time of settlement. While this may not be a guarantee of success in the future, it is clearly an excellent idea and something that all subsequent purchasers of stucco homes should be doing.

  14. CS says:

    We purchased a stucco home in 2010 that was built in 1998. Shouldn’t our realtor or home inspector have recommended a stucco test prior to purchase? I understand the 12 year limit for the builder but do we have any recourse against our realtor and/or home inspector for negligence for failing to recommend a stucco test pre-purchase? Were stucco tests standard in 2010 for southeastern PA the way they are now for resales? We are now facing $50k in stucco repairs/remediation. Thanks!

  15. You should have a direct consultation with a lawyer to make sure that all of the facts are on the table, but from what you’ve told me there is not likely to be good case here. The builder is protected by the statute of repose, the inspector probably has a one year statute of limitations, and the realtor’s liability would most likely be dependent on negligence, which has a two year statute of limitations. Perhaps you would get somewhere with the discovery rule against the realtor, but that is not a case that I would be comfortable taking your money on.

  16. The cornice board in the front porch area of my home was replaced by a new board but was not caulked, just screwed down. After the first rainstorm, water was pouring down from under the cornice and the seams of the area. The builder refuses to caulk and claims that the water pouring down is from the roof area and he is not responsible. Comment from you?

  17. The cornice board in the front porch area of my home was replaced by a new board but was not caulked, just screwed down. After the first rainstorm, water was pouring down from under the cornice and the seams of the area. The builder refuses to caulk and claims that the water pouring down is from the roof area and he is not responsible. Could fairlielaw comment on this?

  18. You should have an expert inspect the installation and render an opinion about whether it was done properly, where the water is coming from, and the cost to repair. We can put you in touch with someone if you give us a call.

  19. Stephen Olenik says:

    I have unique situation, I had an extensive stucco repair due to a roof leak on one elevation of my home approximately 4 years ago. I had my stucco painted shortly thereafter so the color would match. Now to the problem, we just had our stucco tested prior to listing our home for sale. The only side that has an issue is the side that was repaired. The other three sides tested between 8 and 13 on the moisture scale resulting in a pass grade. The repaired side tested in the 40’s or NR (No Resistance) resulting in a major fail grade. This whole side will need to be replaced again. What is my rights in dealing with the contractor who performed the repair? Thanks in advance for your time!

  20. You should call a good lawyer right away as some of your causes of action, like breach of contract, could expire any day. The statute of limitations for Breach of Contract is 4 years in Pennsylvania. Check the date the contract was signed and the date that the work was completed and call a lawyer to discuss all of the facts of your case, looking for relevant exceptions, etc.

  21. Denise Quigley says:

    I have a question. My house was built in 1985 and is a Tudor with siding and stucco. I just got a great new roof and started researching what I could do to jazz up/clean up my stained stucco. I stumbled on this world of improperly installed stucco. So I remembered something coming up during the purchase about cracked stucco but it was unclear whether it was really expensive or just teeny. Because my mortgage is an FHA mortgage, the original lender wouldn’t let the cost of repairs be included because the sellers were already giving back other things (credit for foul carpeting, credit towards new roof, etc.) and it would be no cash out of my pocket. Everyone assured me it was no big deal and I moved forward. Now I’m reading this and found my home inspection (so much written in jibberish). It said and I feel stupid for taking people’s words: improperly installed stucco. Cracks in foundation. Remediation/repair required. Oh, and apparently my chimney has shifted. How is that possible? Is there anything I can do?

  22. Yes, you should set up a consultation with a good lawyer who has experience handling stucco cases ASAP. There are a lot of complex issues to discuss in your case.

  23. Clare N. says:

    Hello, I am part of a HOA that is telling all of its 200+ homeowners that there is mold throughout the community and we are all to pay $25K and possibly replace doors, windows, patios.
    Do we take it at face value or question the need for full removal and replacement at such a high cost?
    These units are 15+ years old.

  24. You should ask whether the damage has been evaluated by an expert and if so ask to review the report which you may want to bring to a lawyer or your own expert for review.

  25. jennifer hagerty says:

    We purchased a stucco home in 2010 that was built in 2000. We have not had any apparent issues but several of the 20 homes in our neighborhood have had to have remediation including removal of all stucco, replacement of windows and drywall for extensive rot. Assume we have similar issues and will in the near future pursue testing. We did not have a stucco inspection when we purchased – we weren’t aware of the issue/need. Is is still possible that we have a case against the builder if we do find significant issues.

  26. I am not aware of any way to win a case against the builder who built a home more than the statute of repose allows (12 years). However, you should get a formal legal opinion from a lawyer who is familiar with all of the facts of your case as there may be a misunderstanding when we are communicating via blog comments. Best of luck. Steve

  27. Christine says:

    good idea, but HOW does a initial owner assign rights against the builder to a buyer? above you wrote: ” One method to, potentially, increase your odds of winning any case that might be necessary in the future would be to take an assignment of all rights the initial purchaser has against the builder at the time of settlement. While this may not be a guarantee of success in the future, it is clearly an excellent idea and something that all subsequent purchasers of stucco homes should be doing.”

  28. You should have a real estate lawyer draft assignment language into the agreement of sale if you are purchasing such a home. Even if you already purchased it consult with a lawyer about the possibility of obtaining a written assignment of rights from the original owner.

  29. Sarah says:

    So, are you saying that any problems found after the 12 year mark are without a prayer to hold the builders liable? Even if it is determined that the cause is improperly placed or lack of flashing around the windows? Is there another option to help fund this astronomical remediation?

  30. I don’t know that a lawyer can ever say someone is “without a prayer” to hold a builder liable. Perhaps another lawyer can think of a new argument that has not been advanced before. Having said that I would never take a case where suit is not filed until more than 12 years from the sale of the home. There is no substitute for an in-depth consultation with a competent lawyer so I suggest that you meet with someone, present all of the facts of your case, and obtain a second opinion promptly. It is not possible for a lawyer to give a valid legal opinion in response to a two sentence question. I wish you the best of luck with your situation. Steve

  31. Carlos Rodriguez says:

    I purchased a brand new construction home in south philadelphia . It’s been 5 years .my patio deck is leaking onto my bottom bedroom and the stucco is cracking all around the patio and all around the house . This builder was not allowed to build any longer in south philadelphia because they have done such a bad job building homes with all these leak problems
    My home owners does not cover the stucco issue and now contractors want to rip the deck and replace the stucco for $20.000
    Do I have a case against them .

  32. You may very well have a case but you need to speak to a lawyer about the applicable causes of action you can pursue and the corresponding statutes of limitation.

  33. Vick P says:

    I purchased a home in 2014 as a resale and just discovered that the home has extensive stucco damage. The home was built just over 10 years ago in early 2006 and the home builder is saying that it is the responsibility of the homeowner since it is beyond 10 years. Can the statute of repose help me bring a suit against the builder?

  34. Builders often deflect or provide misinformation to avoid responsibility. The statute of repose is 12 years so you can still sue so long as you can get around the statute of limitations via the discovery rule and you have a valid claim. See Cutler v. Conway for one of the problems a subsequent purchaser may face.

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