Nova Scotia condos hurt by widespread workmanship woes: leaked report

An internal government document leaked to the CBC News Investigation unit cites widespread workmanship problems in Nova Scotia condominium construction, leaving condo owners with big repair bills and little recourse against developers.

The report says there is no accountability process to forcebuilders to fix defects and goes as far as describing some developers as "unscrupulous."

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The document, prepared for the provincial government in 2013, was meant as advice for the then-minister of Service Nova Scotia, the department responsible for the Condominium Act. Forty-two condominiums built in the previous 10 years were surveyed.

The report says defects have cost some individual unit holders an average of $20,000 to repair. In some cases, bills were expected to exceed $60,000 aunit.

And in the caseoftwo buildings that came under scrutiny, the report saysthe "as-built" plans do not match what was actually constructed.

"In both cases the professionals who signed those plans protest that the developer did not follow their directions, or that the developer altered product after rough-in and sign-off was achieved," says thereport, which does not identify the buildings.

Professional misconduct

The report also questions whether some architects and engineers are living up to professional practice standards, while admitting it's hard to tell where the line existsbetween professional misconduct and developer responsibility.

It cites one rowhouse-style condominium on the Halifax peninsula where balconies were not properly attached to the building and could be pulled away by hand.

The report says in anothercase a developer's employees dumped materials into storm drains instead of properly disposing of the waste in a container.

It says the ensuing backup could have seriously affected municipal services. Responsibility fell to the condominium corporation, not the developer, since the problem was noticed after the property was registered.

The reportdoes not name anydevelopers or condo corporations. Butitgives the clearest picture yet of discontent in the condo scene that has been brewing for years in the province and begs the question of why the government hasn't done more to protect homeowners.

It found:

• 33(79 per cent) experienced some form of defect from original construction.
• 29 corporations (69 per cent)have been subject to varying degrees of premature building envelope failure.
• 7 buildings (17 per cent)suffered from a near-total building envelope failure.
• 15 buildings (36 per cent)experienced premature mechanical system failures (electrical, heating, ventilation, plumbing, etc.).
• 7 buildings (17 per cent)demonstrated latent defects in structural components and/or fire safety.
• 15 buildings (36 per cent)suffered from defects in more than one category.

Flue made of flammable materials

Ray Hunt knows first hand the cost of fixing building defects.

Hebought a condo in Halifax in 2004. After a small fire in the building, he says it was discovered that a flue was installed with a liner made of flammable materials. Rainwater also began leaking into many of the units.

Hunt says that's when he learned about a peculiar aspect of condo construction in Nova Scotia.

"The task of inspections are turned over to the developer, so he inspects his own work," he says.

Municipal inspectors examine condo buildings to ensure fire and life-safety standards laid out in the National Building Code are followed, but they do not inspect the quality of builders' workmanship.

Hunt and the rest of the owners in the building paid $1.7 million to repair the defects, which included pulling off the cladding and replacing it.

Poor workmanship, failure to follow manufacturer instructions

The Service Nova Scotiareport says in many cases poor workmanship at condosand a failure to follow manufacturer instructions were to blame for the deficiencies. A lack of coordination between project managers, supervisors, trades and labourers with varying levels of skills was also cited.

It says at least one major manufacturer of cement board siding pulled its warranty for the product in Nova Scotia, in part because of excessive claims due to poor installation.

The report also foundshoddy electrical and plumbing were common complaints. In one building,stove and dishwasher outlets were installed without proper junction boxes, causing a near fire when a dishwasher leaked and created a short circuit.

"There is evidence that unskilled and perhaps unlicensed personnel are performing critical installations even where the law requires licensed personnel," it says.

Most voluntary, builder-run warranty programs cover a one-year "builder's warranty" and a five- to seven-year structural warranty. There are also factory or manufacturer warranties for individual products such as doors, windowsand appliances.

No mandatory multi-year warranty

Unlike many other provinces, Nova Scotia hasno mandatory multi-year warranty to protect owners.

"The sheer volume of condominium construction doesn't meet that threshold where the mandatory warranty would be viable without significant cost both to government and the construction industry, who pass on those costs to the purchaser," Service Nova ScotiaMinisterMark Furey said in an interview.

He says the provincial government has talked about the possibility of partnering with neighbouring provinces to make a mandatory warranty more affordable.

On Wednesday, a government spokesperson stressed those discussions have only been held within the department and more research is required to understand if a regional approach isviable.

But it'snot the first time the province has been told something has to change.Hunt's experience spurred him to found a group called Condo Owners of Nova Scotia, or CONS.

He says the group recommended the government require developers to post a five-year bond that condo corporations could use if defects from original construction arose. The dollar amount would represent a percentage of the building's value, although the group never settled on a number.

"It went to the government and that's where it stopped. Nothing," Hunt said. "It was very wishy-washy, their answers, and so we gave up. We knew we weren't going to get anywhere."

The group disbanded earlier this year.

Legal action

The report says two developers agreed to repair defects when they were brought to their attention. Some condo corporations tried suing developers, but couldn't because builders had already shut down their businesses. The majority of condo corporations did not attempt legal action due to prohibitive costs.

A consultant's report in 2008 that looked at homeowner protection singled out the condominium sector as the one where "the most serious problems arise."

Among its recommendations it called for a mandatory inspection of the building envelope by an engineer or other suitable professional working at arm's length from the developer.

It also recommended a mandatory warranty for all condominium buildings that includes water-penetration protection for at least fiveyears.

Some condominium corporations were reluctant to participate in the 2013 survey because of fears it could devalue their property, even though they were promised confidentiality.

While the survey captured a large sample size, it says it is probably an "incomplete picture of the total problem."

At the time the report was written, there were 353 condominium corporations in the province with approximately 12,500 units. More than 300 of the corporations were in Halifax County.

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