Print Friendly, PDF & Email

Case Study: Molino Lofts (Condominium Conversion):

Litigating condominium conversion cases are fundamentally unique in nature. Unlike regular construction defect cases involving “new” construction, defects claims in condominium conversion cases require, in addition to typical construction defect issues, a detailed analysis of the work undertaken throughout the life of the project, the scope of work performed during the conversion process by the developer/general contractor and its subcontractors (“Builder”), disclosures made by the Builder to the new owners, local laws that allow “breaks to Builder” in code compliance, and other relevant issues specific to condominium conversion law. Often, the scope of recovery is limited only to what the Builder “touched” or worked on i.e.: even if it is defective, if the Builder did not perform any repairs or construction on that component or building system, there is no claim against the Builder (with only a few limited exceptions to that rule).

Molino Street Lofts is a 91 unit brick condominium project located in an area of downtown, Los Angeles zoned for heavy industrial use. The building, originally built in the 1920’s, was transformed to joint living and working space for artists and artisans and available for lease after the appropriate approvals were obtained from the City of Los Angeles in 1986. Following nearly two decades of use as leasable residential space, the units were converted (condominium conversion) to “artist in residence” lofts and sold to the public in approximately 2005. The building and units were sold with numerous defects.

During the course of litigation against the Builder, Roseman & Associates, APC, undertook an extensive analysis of the project’s history from its original construction in the 1920’s to all work undertaken by the Builder through conversion in 2005. A sampling of our firm’s comprehensive case “work-up” included reviewing in excess of 37,000 pages of records, plans and related documents, evidencing the construction activities and processes utilized, in addition to analysis of the historical aspects of the project from its inception, permits obtained through its construction history, and relevant local laws.

Consultants retained to investigate the claims included a structural engineer, civil engineer, waterproofing/decking expert, roofing expert, electrical engineer, plumbing expert, mechanical engineer, general contractor/cost estimator, and quite unique to this project, an expert consultant specializing in historical masonry restoration and materials testing.

Testing (visual and intrusive/destructive) included, without limitation, roof testing, spray testing of windows, decks, pachometer survey of the brick masonry walls, sampling the exterior coating used on brick and mortar, core sampling of foundation/slab components, testing of the structural retrofitting systems, and manometer floor level surveys.

After litigating the case and participating in the mediation process, the case reached a successful resolution. The gross settlement payment was in excess of $1.8 million. In light of the limited scope of the work undertaken by the Builder, the result and recovery was a resounding success.