Here we go with another architect trying to poo poo the tilting of the MT. Charles, do you understand the concept of being penny wise and pound foolish???
It is not about the money. The industry is not as concerned as the yellow journalists trying to make a buck trashing the tower. Sure the soils engineer should have been more conservative. But this building is not going to fall down. The Tower of Pisa has ten times the lean and is 500 years old.
This Architect is making the same points I did years ago. Any body move out? Empty units? Fire sale?
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Any body move out? Empty units? Fire sale?
Like I said initially, my handyman would have gotten this right. You simply do not screw up the foundation of a 58 story skyscraper in an area prone to earthquakes or on landfill. How stupid can one be?
Can the builder buy back the building at original price and then sell it again with full disclosure?
Too much penalty can make builders scared and build even less high rise condos. Not good for the population at the whole.
Uh, the builder has lawsuits up his arse as it is…
What’s the damage to the buyers if builder is willing to buy back? I think we should limit lawsuit and make a return policy of new condos when this kind of issue happens.
I’m against rent control. I would prefer a lawsuit control instead of rent control.
Get rid of excessive regulations and lawsuit will decrease dramatically.
Well, isn’t there an opportunity cost lost by the buyer? Some of these buyers bought in early in hopes of making a gain. That is dubious now, pending fix of course. And who is going to pay for that ugly contractor bill? You want to pay, Mr. Taxpayer? I don’t think so…
why limit it to condos? Might as well apply to all types of new construction.
I was the defendant in a construction defect lawsuit (2 SFR), and plaintiff demanded that I buy both houses back from them, but they added all their expenses in heavy customization, attorney cost, carrying cost from close of escrow to filing of suit etc, high 6 figures per house, it was ridiculous. Buying back for the purchase price? Yes, I would’ve done that. Especially with the upcoming appreciation (at that time).
Did you settle? Win?
We settled. They claimed actual damages in the mid 1m range and asked for punitive damages … got 1/4 of what they wanted.
80% came out of my pocket, 15% from broker and 5% from GC
Painful. I was sued many times as the engineer for developers. It is one reason why I moved into the houses I built. Developers get little sympathy from juries, even if the plaintiffs are lying snakes with unclean hands(legal term)
So your annualized cap rate or flipping profit during your course of business is pretty low.
Have to wonder whether it is higher than the annualized return of S&P index.
Even if higher, is it more than your last drawn salary of W2?
That is, is return from your business > W2 + annualized return of S&P index?
Not sure how their claimed damage relates to my cap rate or flipping profit.
This suit cost me (including my own legal fees) only 1/4 of my profit. They had requested my accounting documents to see how much I made and magically arrived at damage close to that number.
For your profit estimates, keep in mind that this project did not occupy all of my time. I had other projects in Sunnyvale parallel.
Did you have insurance? Did insurance cover anything?
Our liability and umbrella policies don’t cover it.
One thing I learnt is that there is a special type of policy (“OCIP”, https://en.wikipedia.org/wiki/Owner-controlled_insurance_program ) that protects you for 10 years in case of construction defect suits.
I currently have such a policy for 1 project that is under construction. The policy cost me $75k for construction of 6 townhouses. That’s about what I paid my attorney in the other case. The insurance hires contractors to do peer reviews of drawings, calculations, and finally the actual work in the field.
For projects like the Millenial Tower condos in SF, it is basically a must to have such an OCIP. Engineers and contractors won’t take on a condo project if there is no such insurance, as a lawsuit in the 10th year is practically guaranteed.
Too much regulation and too many lawsuits is an important reason for the housing shortage.
Instead of de-regulation, they want to have Prop 10 to make rental housing an extinct species.
With the increasing regulation, we need to go back to the history: everyone builds his own houses. Except the land shortage has made that impossible now in urban centers