Red Flags for Property Managers — Spotting Potential Construction Defects Early

Why Early Detection Matters

For property managers and homeowners’ associations (HOAs), identifying potential construction defects early can make the difference between a manageable repair and a multimillion-dollar lawsuit.

Under California law – including the Right to Repair Act (SB 800) – HOAs often have rights to pursue claims for construction defects affecting common areas and individual units. But those rights can expire if problems aren’t recognized and documented in time.

Here are some of the most common red flags that property managers should watch for during routine inspections and homeowner reports.

1. Water Intrusion or Moisture Stains

Water is the number one enemy of any building. Early signs of leaks or water damage are often the first indicators of more serious underlying defects.

Watch for:

• Water stains on ceilings or walls

• Damp or musty odors in units or common areas

• Efflorescence (white mineral deposits) on concrete or stucco

• Warping or delamination of flooring or baseboards

• Leaks around windows, doors, or roof penetrations

Possible causes: Defective flashing, improper waterproofing, roof installation errors, window or deck detailing failures, or faulty exterior stucco systems.

If you notice recurring leaks in multiple locations, it’s often not an isolated problem — it’s a sign of systemic building-envelope defects.

2. Cracking in Stucco, Foundations, or Concrete

Cracks are not always structural failures — but they can be clues to serious issues.

Look for:

• Horizontal or diagonal cracks in stucco, especially near windows or floor lines

• Large cracks in concrete slabs, driveways, or retaining walls

• Uneven floor levels or doors that don’t close properly

Possible causes: Soil movement, inadequate compaction, poor structural design, or improper curing and reinforcement of concrete.

Consistent cracking patterns throughout a building or complex often point to design or construction deficiencies, not simple settling.

3. Roofing or Deck Failures

Flat roofs, podium decks, and balconies are among the most defect-prone elements in multifamily construction.

Warning signs include:

• Ponding water or clogged drains

• Cracked or blistered roofing membranes

• Soft or spongy deck surfaces

• Rusting metal guardrails or flashing

• Leaks below balconies or walkways

Because roofs and decks are major waterproofing systems, any breakdown can quickly lead to widespread damage if not addressed.

4. Drainage and Site Grading Problems

Improper drainage is a hidden but costly defect. Water that isn’t diverted correctly can undermine foundations, damage landscaping, and cause flooding or erosion.

Red flags include:

• Standing water near foundations or common walkways

• Erosion around slopes or retaining walls

• Water flowing toward, rather than away from, buildings

• Persistent dampness in garages or crawl spaces

Often, drainage problems trace back to poor site grading, inadequate waterproofing, or missing subsurface drainage systems.

5. HVAC, Plumbing, and Electrical System Failures

Mechanical and utility systems in new developments should function reliably for years. Early failures often indicate design or installation defects.

Watch for:

• Repeated plumbing leaks or slab leaks

• Inconsistent hot/cold water pressure

• Frequent tripping of breakers or flickering lights

• Poor HVAC performance or condensation issues

Sometimes these issues stem from improper venting, undersized systems, or defective materials.

6. Persistent Owner Complaints Across Multiple Units

Property managers often hear isolated complaints. But if multiple owners report similar problems –  such as leaks, cracks, or HVAC failures –  it’s time to investigate more deeply.

Consistent, widespread complaints are often the first sign of systemic construction issues. Keeping detailed records of these reports can be critical later if an HOA decides to pursue a defect claim.

7. Premature Deterioration of Building Materials

New construction should last for decades before major replacement is needed. When exterior finishes, roofing, paint, or waterproofing systems begin failing prematurely — within just a few years — it’s a sign that something went wrong during design or construction.

Common examples include:

• Stucco discoloration or delamination

• Rusting balcony railings or hardware

• Paint or coating failures

• Window seal failures or fogging between panes

Bottom Line - Property managers are on the front lines of identifying potential construction defects. Early detection  and documentation can protect homeowners, preserve property values, and preserve the HOA’s legal rights.

When in doubt, don’t assume a leak or crack is “normal.” In many cases, these are early warnings of underlying construction defects that may justify legal action under California law.