Million dollar leaky condo settlement ‘remnant of a distant past’: City of Penticton CAO

PENTICTON – It would have cost taxpayers a lot more to continue to fight a lawsuit involving a leaky condo complex in Penticton than to reach a $1.15 million settlement agreement, according to the City's top bureaucrat.

The City announced earlier this week it had reached an agreement in a multi-party mediated process that will see the city pay $1.15 million as its share to conclude the lawsuit over construction deficiencies with Lakeview Terraces, a condominium complex on Marina Way. It had been arguing the case since 2006.

Chief administrative officer Peter Weeber says the lawsuit was the result of poor building practices that prompted hundreds of lawsuits across the province in the late 1980s through the early 2000s, prior to legislation that was to protect buyers from leaky condominiums.

The leaky condo crisis, or leaky condo syndrome, is an ongoing construction, financial and legal crisis that mainly involves multi-unit condominiums damaged by rainwater infiltration. According to Wikipedia, it has cost an estimated $4 billion in damage to buildings in B.C. alone.

"The rules and building codes weren’t tight enough in those days to prevent this type of thing, so everyone involved has a liability,” Weeber says. “It would cost a lot more money to continue arguing about it than to settle it."

“We have a responsibility, because someone, somewhere in the past signed off on this project, said it was good, when in fact it wasn’t good, because it leaked like crazy.”

Weeber says building codes have since been changed to prevent this from happening again.

“Leaky condos were a huge issue, and this settlement is the remnant of a distant past. There were 12 defendants named in the lawsuit, which was focused on the building’s envelope. It was part of a province-wide issue that generated a lot of court cases," he says.

One positive result of the crisis was the enormous amount of legislation and case law that came out of it, Weeber says, adding the city hires experts when a project falls under their jurisdiction that may be beyond the expertise of the staff of the small city.

“In construction of complicated buildings the city takes a letter of assurance from an architect or other building expert. The liability then falls on them. Many small cities use that method, as we don’t always have the expertise to catch something that could be expensive,” he says.

Weeber says the City of Penticton generally deals with only a handful of contractors, whose practices become known to city officials over time, an advantage big cities often don’t have.

“We know who we’re dealing with most of the time. They either have solid reputations or they don’t, and if so, the building inspector is likely to pay really close attention to them,” he says.

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