May, 2006

Construction Defects

Bottom line: In today’s litigious society, nothing can prevent a dealer being named in a construction defect lawsuit. But taking a proactive stance to reduce defects can reduce the risk.

By Steve Easley

The settlement of a recent mold case underscores the liability that faces everyone—even lumber dealers—in the construction industry: A California family, claiming severe health effects caused by exposure to mold growing on improperly stored framing lumber, settled for an unprecedented $22.6 million. Lawsuits like this are becoming alarmingly frequent. The family left no one off the list, naming 17 defendants, including the lumber company from which the lumber originated, as well as the general contractor, the construction supervisor, the framing contractor, the engineer, and the roofing company. The lumber company agreed to pay $13 million, and the other parties pitched in an additional $9.6 million to settle the case.

This shotgun approach to naming responsible parties in a construction defect case is typical. No one is safe. The responsibility for defects is murky, and there’s a reason construction defects account for the costliest form of litigation. Houses aren’t built by one party, but by a small army. Homes are made of thousands of pieces put together by hundreds of people, many of whom are poorly trained. The interrelationships and dependencies of all those participating in the process is often difficult to untangle. The prosecution will leverage this fact; the defense counters by narrowing down the chain of custody and hopefully isolating it, making the case that it was due to an act of God, or proving the claim is spurious. But don’t bet on it. The only sure-fire way to avoid paying out in a settlement or a judgment is to take proactive steps to alleviate defects.

Do the Right Thing

As a lumber company, your first responsibility is to ensure that the materials you sell are kept dry and dimensionally stable. Dangerous defects are often discovered during construction by well-educated home buyers. Untrained crews often install defective materials before a builder has the opportunity to inspect them, which makes it critical that you deliver materials to the job site in good condition. It’s also important to note that it’s the builder’s responsibility to provide reasonable protection for these materials after delivery. This may require coaching and a lesson in "just in time” scheduling of job site deliveries. While this isn’t technically your responsibility, going beyond the obvious obligations can save a lot of grief for you and your builder customers.

A good prosecutor will argue that as a lumber dealer you ought to know exactly the condition of the products you sell. You should also know how the products you sell are properly installed. A good defense will provide evidence that you do just that, and that you take a proactive stance to pass along manufacturer information on proper installation methods to the buyer. Think in terms of cigarette health warnings and the "Buckle Up for Safety” message that accompanies the sale of a car. Homes are even more complicated and are associated with hazards, as well. Mold, carbon monoxide, fire and collapse are the primary causes of concern and the focus of most building codes.

If you want to take advantage of the increased profit opportunities of installed sales, you will be assuming even more liability by assuming a subcontractor role on the job. In the long run, this may actually be the very best way to avoid risk. You can assume control over a specific task and make sure it’s done right the first time. When you train the crews and arm them with the knowledge and supervision skills to do the job right, this has value to you and the builder. There are no guarantees, but if you can demonstrate that you exercised due diligence throughout the construction process, you can reduce the risk of a costly lawsuit.

The Four D’s

Up to 80% of residential construction callbacks and defect litigation are related to moisture damage. Most of the defects are due to stupid mistakes. As a building consultant, I see builders repeating the same mistakes over and over, mistakes that doom a home to absorbing and retaining water, and eventually succumbing to mold and rot.

These mistakes are easy to avoid if you understand and follow a basic menu of construction principles, which many experts call "The Four D’s:” Deflection, drainage, drying, and durable components. Whether or not your company sells products on an installed basis, these construction principles are key to keeping you, and your builders, out of court. The following tips are especially important with work involving exterior products, such as siding, roofing or window installations.

Deflection is a combination of good design and properly installed cladding and flashing. The goal is to "deflect” or direct water away from the roof and house before it can make its way into roof or wall assemblies. Tactics include avoiding roof designs with features that will trap and hold water, like horizontal valleys and making sure that every piece of flashing, building wrap, roofing and siding is lapped over—not tucked behind—the piece below it. Good deflection strategies also include grading the landscape around a home so that water naturally flows away from the foundation, providing well-draining backfill and perimeter foundation drains that flow to daylight. Swales that channel runoff are mandatory on any hillside site.

A one-inch rain on a 2,000-sq. ft. roof will deposit over 1,250 gallons of water. All this water will be concentrated at the perimeter of the house. It’s critical to avoid any design that might funnel water into the building. Always think through the design prior to installing any exterior product to make sure the design is part of the solution, and not part of the problem.

Drainage means that when water gets behind the cladding (which it always will at some point or another) you must leave a path for it to drain out. Keeping the path open includes not blocking weep holes in windows and vinyl siding, and not filling the drainage plane behind brick veneer with mortar. Make sure you have weep holes and through-wall flashing in brick and stone veneer walls. And watch for situations in which the finished grade is below any weep holes. Make sure that builders use water-resistive barriers behind siding, and that the siding is not reverse shingled.

Drying means using construction products that allow wet components to dry as fast as possible. It is very, very easy for building components in walls to get wet. All cladding systems leak. Problems occur when the building doesn’t dry quickly—a situation that, unfortunately, describes most buildings. In the average home, at some time before the statute of limitations for defects runs out (7 to 10 years in most states), it is likely that water might get into a wall assembly, wetting the sheathing, insulation or framing. Impermeable building materials, like polyethylene sheeting, low-perm housewraps and building felt, reduce a wet wall assembly’s ability to dry out.

If fact, it may take days, weeks or even months to dry out. A properly designed wall, on the other hand, will "breathe,” so moisture can evaporate quickly. For this reason, never tape the joints on plywood or foam sheathing. If the home interior has vinyl wall paper, or a poly vapor retarder beneath the drywall, this will inhibit the ability for the wall to dry to the inside. I never recommend a poly vapor retarder in any climate where air conditioners are used. Kraft faced insulation will meet code requirements for vapor retarders, but won’t trap water indefinitely. You want wet building materials to dry as fast as possible, to whatever direction climatic conditions dictates.

Forgiving Exteriors

It always amazes me that while most builders would never consider installing roofing without an underlayment, they seldom include the right layer of protection beneath siding. Walls actually have far more penetrations than roofs, which increases the need for secondary weather protection. In a wind-driven rain, a wall does not know it’s not a roof. A wall without a weather-resistive barrier, as any effective building wrap is called, will do more damage than a roof without underlayment. Without a building wrap, there is nothing to prevent the wall from getting soaked. We all understand the basic principles of installing roofing materials, and proper shingling for water diversion. We just need to apply the same principles to wall construction.

Start with a good weather barrier. Use breathable weather-resistive barriers to provide a drainage plane and protect the wall sheathing and framing from water intrusion. Beware of building wraps that have holes punched in them. Some products have as many as 3,000 holes per square foot. I recommend spun-bonded products with a perm rating of 50 or higher. Such a material essentially works like a Gore-Tex® jacket—water and air cannot get in, but moisture vapor can evaporate out, allowing any building components that might get wet a better ability to dry.

Install weather-resistive barriers properly. This means starting at the bottom for proper shingling. Gable ends must be wrapped as well. Make sure that all penetrations, like wires, pipes, air conditioning line sets, panel boxes, dryer vents and exterior fixtures, are flashed or taped. The flashing for these, and for windows and doors, must also be lapped properly, as well, so water drains to daylight, not into the wall. The over-arching rule of thumb: The building should be water-tight before the cladding is installed.

Using durable, water-resistant components in a wall system will also make it less susceptible to moisture damage. By their very design, some products ought to be avoided. For example, arch-topped windows with brick mold are almost impossible to flash. Instead, use a flanged window with a nail fin. Cover the fin with a peel-and-stick flashing product, and then overlap the flashing with a building wrap.

Proper flashing. The weak point in most walls is the flashing around windows and doors. Flashing warrants a separate article, but suffice it to say that all window manufacturers require flashing according to ASTM E2112. Basically, this requires that you flash and install the window with the appropriate sealant in the following sequence: after installing the building wrap, install the sill flashing, then the window, then the jamb and the head flashings. Make sure that the flashing at the head of the window is adhered to the nail fin and the wall sheathing with the building wrap shingled over the head flashing. This means you have to cut a flap in the wrap at the head of the window. The all-too-common practice of X cutting the wrap at a window opening is wrong and encourages water to be funneled into the head of the window.

Many installers do not flash windows because it takes a little money and extra time, and the competition isn’t doing it. But if a building owner wants to sue you for moisture problems, a good lawyer will tell the owner to disassemble and inspect the window areas to see if you followed this standard of care in the industry. For window and door installation, this standard is the window manufacturer’s installation instructions, which almost always follow ASTM E2112.

A Call for Training

Why do so many building crews ignore common sense construction principles? The most common reason is simply a lack of training and reduced job site supervision—often caused by tight budgets. Many builders and framers don’t know how to properly flash windows, or how to build a wall that will drain and dry. If they don’t have the training to do it correctly, and their work isn’t inspected by a trained supervisor, the result can be extremely expensive. Last year, for instance, a Midwest builder agreed to pay $24 million for mold remediation on 2,000 homes. The cause: construction defects like improperly installed brick, stucco, siding and leaky roofs. That’s a hefty price for not investing a little time and money in training and inspections.

Overcoming liability for you and your builders ain’t cheap. It requires investments in training, and in scrupulous documentation of the practices you employ. On the other hand, a dealer who invests in training for builder clients, as well as for the installation crews it hires, will reap more than the reward of reduced risk. Consumers expect to buy homes that are free from defects. Consumers will also pay more for high performance products if they understand the difference it will make in the build quality of their home. Think about why foreign car resale values are typically higher than many domestic cars. The reason is a perceived higher quality. Educate builders in best practices, market that expertise, and you will raise the perceived value of your company. Instead of just a vendor, your customers will view you as an educated resource to help them make more money—and stay out of court.

Steve Easley is president of Building Media, a company that performs consulting and training on building science issues. Armed with more than 30 years of hands-on industry experience, his seminars show builders how to design and build homes that are comfortable, healthy, moisture-resistant, and durable. Topics include reducing call backs, high performance building envelopes, HVAC sizing and installation, and proper ductwork installation. You can see free construction/educational videos on these topics online at www.buildingmedia.com. Click on the "projects” tab for links to the videos.