201611.01
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$4 Million Mediated Settlement in LA Construction Defects Claim

An LA construction defects claim, made by the owners of a renovated downtown luxury condominium complex, has been settled by mediation for $4 million.

Library Court Lofts should be a desirable condominium complex in downtown Los Angeles. Located in the heart of the Financial District, the complex has full-time security, a business center and a 24-hour study. It also has a Zen Bamboo courtyard and a fully-equipped fitness center.

Originally constructed in 1955 by Lincoln Savings, Library Court is a landmark building on W 6th Street. In 2004, as part of the Adaptive Reuse Ordinance, the building was extensively renovated with the help of historic preservationists.

The condominium units went on sale in 2006 and were quickly fully subscribed. However, due to shortcuts taken during the renovation, owners soon started to notice water intrusion in the garage. The water intrusion led to cracking in garage slabs and in the exterior stone cladding of the building.

Further water intrusion due to podium deck level leaks resulted in wood decking distortion and plumbing system deficiencies. The deficiencies in the plumbing system caused valves to corrode, which in turn caused the failure of water heaters and sump pump systems.

On behalf of the condominium owners, the Library Court Community Association sought legal advice and subsequently made an LA construction defects claim against Greystone Multi-Family Builders Inc. – the company responsible for carrying out the renovations and selling the condominium units.

In October 2014, the LA construction defects claim was filed at the Los Angeles Superior Court and the case went to mediation. After two years of negotiations, a settlement was agreed that will see the owners of Library Court Lofts share in $4 million compensation.

Announcing the settlement, the lawyer representing Library Court Community Association said: “Many commercial buildings in Downtown Los Angeles, like Library Court, were adapted for residential use and converted in the midst of the real estate boom in 2004-2006, where speedy construction resulted in building wide construction defects.”

During the housing boom of 2006 – 2008, many under-utilized buildings in downtown LA were converted into housing units due to the incentives offered by the Adaptive Reuse Ordinance. Where problems with the renovation work have been identified, lawyers are helping other Property Owner Associations make a LA construction defects claim to recover compensation where appropriate.