New home warranty insurance isn’t always the answer in the case of remedial work on new constructions.

The recent case of Winnipeg Condominium Corporation No. 613 v. Raymond S.C. Wan et al demonstrates that cost-saving methods can sometimes lead to dangerous – and expensive -- penalties. The decision involved the condo corporation bringing a claim to recover costs against a project architect. The costs being sought were for the installation of a waterproofing membrane – which was included on the original architectural plans but later scrapped by the developer -- on the main level of a common area parkade. The lack of the membrane, dropped as a cost-saving measure with the architect’s knowledge, and other incomplete waterproofing measures lead to water pooling in the lower levels of the parkade. Undisputed by either party was the fact that over the course of decades, these deficiencies could well cause the reinforcing steel to corrode thus posing a threat to the safety of the parking structure and its users.

According to the architects in the defence of the lawsuit, the deficiency was not dangerous enough for liability to accrue in the absence of a contract. This defence did not cut any ice with the Manitoba Court of which found that as long as the defect may ultimately become hazardous, the architects could be liable for the cost of repairing the deficiency, even if the danger was decades away.