You appear to be very intelligent. My thoughts are very simple and are made with common sense. If inspections were required and all criteria was met. How can the insurance company deny the claim due to faulty material/poor construction.
Because the insurance policy is a casualty policy. Faulty materials/construction is not a casualty. Trying to claim for construction defect/faulty workmanship on a casualty policy is like trying to submit an auto insurance claim to your health insurer.
The way that construction liability/defect insurance is handled is that the contractor provides a certificate of liability insurance coverage to the property owner that names the property owner as an additional insured. That essentially attaches the owner to builder's liability policy. Now that policy, of course, is not going to provide coverage in situations when the builder is not liable. Which means that if the claim falls outside the statute of repose, there is no coverage because there is no builder liability. If an owner does not want coverage to end after the statute of repose, that would have to be negotiated up front and would represent an additonal - and hefty - insurance premium.
My other question was, does the state of Hawaii require inspections for safety and durability to withstand the environment before a project is completed. I know the state of Florida does.
I doubt it. And I seriously doubt that Florida does either. I'm sure that Hawaii, like Florida, inspects for compliance with building code.
As I said earlier in one of my posts. That the large purchase DRI made should have been inspected by a structural engineer before they bought it. At this time you said it was known that there was a problem. Just maybe they had a vision of a new resort down the road. Now all of a sudden it our problem and DRI gets a new resort. I don't think so.
Joyce Weisberg
I would imagine that at the time they purchased the resort they had a review done by knowledgeable and skilled people. For a project of this type that may or may not be a structural engineer - a three to four story wooden structure is often within the purview of a civil engineer or architect who does not have a specialized structural pedigree. If they have the expertise in-house it might not even be done externally.
Let's assume they brought in an outside consultant to do the assessment. The general standard of care that applies is what is customary and normal practice in the locale in which the work was done and at the time the services were performed. That's the same standard of care, for example, that applies when you go to see a your personal physician. Though I am a registered civil engineer, I don't practice in the area of building inspection, so I don't know what would be expected in this circumstance. But I do know that when I have bought and sold my houses in my life, ordinary inspection did not include ripping open the walls behind the siding or drywall to verify that there wasn't hidden damage.
Or course this is not a house, but a multi-million dollar condo project and a greater degree of upfront inspection would likely be customary. Perhaps the ordinary standard of care in such projects does dictate destructive inspection techniques. I suspect, though, that when doing a pre-acquisition assessment of a fifteen year old wood-frame building, constructed to code and not showing visible evidence of distress, it would be rare to start stripping the exterior off of two or three buildings so that one could inspect the condition of the studs, straps, and connectors behind the wall unless there were specific reason to suspect there was a situation that required that degree of intrusive activity.
Now was there reason to suspect a problem at the time DRI got involved at the site? I don't know that. But since I already owned at the site before DRI got involved, that really doesn't make any difference. Because DRI didn't make the problem. If they had found the problem and walked away from the deal because of the problem, the owners of the resort would still be faced with this situation, wouldn't they?
Bear in mind that the resort was almost entirely sold out before DRI came on the scene.
