NEW YORK, N.Y. – As a long-time attorney in Manhattan, Carol A. Sigmond, partner at Greenspoon Marder LLP, is seeing a trend; construction defects are on the rise. “There are a lot of developers who came in for a money-making opportunity,” she says, “and they actually don’t know how to build a building, and they don’t know how to build a high-end residential building.”

Problems include uncertainties with window manufacturers, defective elevator cables, cracks in the drywall, and problems adhering to fire codes. “These are rookie mistakes,” Sigmond laments. “Last year we sued when a fire stair was built out of flammable wood and not anchored to the building. It was a joke. Subcontractors are underfinanced and don’t have the resources to do it right.”

Terminating the subcontractor for cause is always an option, but there are considerations. Is the sub too far in to be terminated? Do you have to keep him on the site because you need to get materials and justify how much he’s been paid—even with the defects?

“It’s a complicated dance,” Sigmond admits. “The contractors, architects, and engineers—and the lawyers—will help assess the claim and whether you can collect on it. So many of the subcontractors are so weak financially that they don’t’ have the ability. They did it wrong in the first place for a reason.”

According to Sigmond, the reasons are familiar. “There is an element of conscious neglect by the developers or plain financial pressure,” she muses. “They can’t afford to do it right so they let the contractors cut corners and hope for the best…and it feels like there are more of these cases and these defects are more common. I have a defect case that just got scheduled for trial.”

Perhaps even more troubling is that building owners have fallen behind on mortgages. “There is too much debt,” Sigmond reports. “You have a middle class that’s under massive stress. You have the tariffs that are hitting the middle class and they are going to hit by October. People are going to be seeing price increases.”