The Board of Managers and all unit owners in a newly constructed eight-story condominium agreed to accept an all cash $178,500 offer from the building’s developer in full settlement of all possible claims of the Board and unit owners for alleged defects in the construction of the building’s roof.
The Board had initially sought a much larger sum for what it claimed it would cost to do a full roof replacement. Adam Leitman Bailey, P.C. was then retained to represent the developer in a two-year negotiation that led to the successful settlement without litigation.
On Adam Leitman Bailey, P.C.’s recommendation, the developer retained an expert engineer to survey the condition of the roof. The engineer concluded that limited repair work would satisfactorily remedy the complained of defects and that replacing the entire roof was not warranted. The Board nevertheless stood by its demand for the cost of a full roof replacement and threatened to sue.
The developer then offered to perform the roof replacement using its own resources, in accordance with a scope of work recommended by its engineer, which the sponsor would have been able to do for much less than the amount the Board claimed the work would cost.
Although the Board initially accepted the developer’s offer to do the work, the Board pressed the developer to add items to the scope of work that would have unduly increased the cost of the work and would also have exposed the developer to possible continuing demands for additional “clean-up” work. The developer then reversed course and decided to make a simple all cash offer to the Board. On Adam Leitman Bailey, P.C.’s recommendation, the developer presented the Board, on a “take-it-or-leave-it” basis, with a good faith estimate, made by a reputable roofing contractor, of the true cost of a full roof repair based on the scope of work previously prepared by the developer’s engineer.
After some initial disagreement due to the Board’s erroneous interpretation of the contractor’s estimate, the Board and the unit owners finally accepted the developer’s offer and agreed to fully release the developer from their claims in return for the agreed settlement payment.
The Adam Leitman Bailey, P.C. partner in charge who handled this matter was John M. Desiderio , the Chair of the firm’s Real Estate Litigation Group.