A recent Vermont case found a Condominium Association in Stow trying to sue a builder for water infiltration and expenses for repair and remediation of the condos.  The builder, Engelberth Construction had its contract with the developer.  The builder got let out of the case because it had no contract with the Condo Association.

The Condo Association tried to get around the “economic loss rule” (which bars them from recovery where they had no personal injuries) by arguing that the contractor’s preconstruction activities, which included constructability review and value engineering amounted to a professional service like an architect.  The contractor had agreed during preconstruction to “cooperate with the Design team”.  The Vermont Court said this was not enough to establish an ongoing liability of the builder to down-the-line purchasers, with whom the builder never contracted.

In most large private construction contracts now, cooperation is required between the design, contracting and owner teams. This is sometimes called Integrated Project Delivery (IPD). Agreeing to cooperate does not strip a contractor of defenses established by decades of precedent according to the Vermont Court.

A dissenting judge pointed out that many states, including neighboring New Hampshire allowed such suits.

The case is Long Trail House Condo. Ass'n v. Engelberth Construction, Inc., 2012 VT 80,