CREJ - Multifamily Properties Quarterly - July 2015

Construction defect claims that often are missed

When thinking of common multifamily construction defects here in Colorado, most people think of defective windows, doors or - roofs and the resulting water damage caused. Others think of problems associated with improper grading and drainage, such as soil movement and the resulting structural, drywall or flatwork damage.

Curiously missing from this list are fire-suppression system defects.

From multifamily apartment and condo projects to single-family homes, the installation of fire suppression systems is now commonplace in Colorado. So why is it that fire sprinklers often miss the construction defect boat? It is not because all fire sprinkler systems are defect free.

Given their complexity and the number of variables involved, improper installation is far too common. According to a 2013 report by the National Fire Protection Association, 87 percent of ineffective sprinkler responses in fire incidents are caused by improper installation, design or system type.

The real reason they often miss the boat is because most property owners and managers mistakenly perceive the early symptoms of fire sprinkler defects as minor annoyances when, in fact, they may be symptoms of a system-wide defect. By the time the full extent of the problem is realized, it is often too late to file a claim under Colorado law.

This can be a costly mistake. Repairing or replacing a defective fire sprinkler systems is expensive, potentially exceeding four times the original installation price depending on the size and type of the system – not to mention time and inconvenience.

The goal of this article is to help property owners and managers avoid this pitfall, protect their investments and ensure that those responsible pay for necessary repairs.

In Colorado, the threat of freezing sprinkler pipes can drive the system design. There are two ways to approach this problem: Install a “dry” system, which uses pressurized air to hold water behind valves in the pipes and thus away from freezing temperatures, or install a “wet” system, which is filled with an antifreeze solution including glycerin and propylene glycol.

While both systems have faults; in our experience, wet systems are more commonly found to have defective attributes.

Wet fire-suppression systems – as the name implies – have liquid present in them at all times. The pipes usually are constructed with chlorinated polyvinylchloride. If the wrong types or amount of antifreeze chemicals are used, the CPVC may crack and leak. Cracking also can be caused by an accumulation of certain pipe lubricants or when excess pipe cement pools in the pipe. External contact with electrical wiring or PVC piping also can cause damage to CPVC pipes.

It is beneficial for property owners and managers to understand and recognize the symptoms of fire sprinkler defects. While it is possible for sections of pipe or even an entire pipe to rupture, the damage and symptoms usually are more subtle. Signs of an issue start with interior cracking or corrosion of the pipes. While not visible, this damage will reveal itself as rust or annoying leaks or drips of water coming from the pipes, connections or sprinkler heads.

To many, such leaks are irksome. They are persistent, come at all hours of the night, cause property damage and often there is no perceived rhyme or reason as to why or where they appear. As a result, they are commonly treated as isolated annoyances that should be punch listed or repaired on a case-by-case basis at the property owner’s cost. For this reason, fire sprinkler leaks are rarely attributed to a construction or design defect, especially early on in a building’s lifecycle. Therein lies the problem.

With very few exceptions, a construction defect claim in Colorado must be filed within two years after a property owner discovered (or reasonably should have discovered) the physical manifestation of the defect (C.R.S. § 13-80- 104 and C.R.S. § 13-80-102). In this case, the “physical manifestation” of fire-suppression system defects can be those annoying little leaks or rust, which appear during the first few years after the system is turned on. In the event of a later defect claim on behalf of the whole building, Colorado law may view those same leaks that were repaired on and off over the past couple years as evidence of sprinkler system defects that the owner knew about. Property owners may not be able to include their fire suppression system in the construction defect claim if more than two years has passed since first noticing those leaks.

This may be true even if the property owner did not learn of system-wide defects until years later, which is often the case.

While not always the case, fire sprinkler leaks can be symptoms of a construction or design defect. Unfortunately, even when sprinkler leaks are symptoms of a defect, they are rarely recognized as such in the beginning. These symptoms should not be taken lightly and should be addressed proactively and in a timely fashion. Otherwise, your fire sprinkler problems could miss the construction defect boat. Simply stated, don’t ignore those annoying fire sprinkler leaks or you may end up paying for someone else’s mistake.