Do You Have an EIFS Claim?
March 29, 2009
If you’re wondering if you have an EIFS claim, you probably already know what EIFS is. It is an exterior insulation and finish system – sometimes called fake stucco or synthetic stucco – that has been blamed for thousands of cases of wood-rot in homes across the United States.
Builders started using EIFS in residential construction in the 1980s, and wood-rot problems began appearing not long afterward. Individual lawsuits against builders, subcontractors and suppliers proliferated. By the 1990s multiple class action lawsuits were being filed against the manufacturers of the EIFS materials, most of which were settled by the early 2000s.
Two Types of EIFS: The Good and the Bad
The type of EIFS responsible for wood-rot is called barrier EIFS. It is designed to create a waterproof barrier that prevents water from penetrating. The problem is that if water does manage to get in, EIFS also prevents it from escaping. The trapped moisture then feeds wood-destroying organisms responsible for wood decay.
To solve the problem, the construction industry designed an alternative system that allows moisture behind the surface to drain, preventing the wood-rot problem from occurring. This alternative is called drainage EIFS. The incidence of water intrusion problems in drainage EIFS is dramatically lower than with barrier EIFS.
The Causes of Water Intrusion
Poor Workmanship
In barrier EIFS, the weakness is at windows, doors, and other openings and penetrations. These areas have to be properly sealed to prevent water from entering and getting behind the insulation. The slightest failure in doing this job correctly can lead to water intrusion and entrapment, and subsequent wood-rot.
Although drainage EIFS experiences fewer problems, it is still possible for poor quality workmanship to lead to a water intrusion problem. However, the problem is usually more likely to reveal itself and be repaired before significant wood-rot can occur.
Maintenance
Caulking around windows, doors and other openings deteriorates over time. It must be periodically inspected and maintained. Failure to keep these areas watertight will lead to water intrusion problems.
Alterations
Any alteration to the home that creates a penetration of the exterior wall creates an opportunity for water intrusion. Whether it’s as simple as hanging a hose reel or as complex as adding a deck, these penetrations must be properly sealed to prevent water intrusion.
What Recourse Do You Have?
If you have any type of construction defect, whether related to EIFS or not, you can pursue a claim against the builder for damages if action is started within the statute of limitations. Laws vary from state to state, but claims involving specific systems such as electrical and plumbing may be barred two to four years after the home was constructed. For structural defects (and all defects in some states), the statute of limitations may be as long as 10 years after construction. In virtually every state, if your home was built more than 10 years ago, you very likely have no recourse against the builder. But check with a construction defects attorney to be sure.
If you are within the statute of limitations for your state, you can possibly bring action for EIFS-related defects against the builder, the exterior finish subcontractor, and the building supply outlet that furnished the materials.
In recent years, many builders have been trying to limit their liability exposure by hiring independent inspectors to verify that the EIFS is installed correctly. If a private EIFS inspector was involved in your home’s construction, he or she might also be accountable.
As for the manufacturers of EIFS materials, most of these deep-pocket companies have already been sued in class action cases that have been settled. Once a class action is settled, future claims of the same type are typically barred. There have been loopholes, however. Your attorney can help you decide if you have an avenue to pursue against the manufacturer.
Recovery of Damages
Because barrier EIFS is still effective when it is properly applied, many experts will recommend against completely removing all EIFS from a home’s exterior and resurfacing it with less problem-prone material. Their opinion is that this is expensive and unnecessary. Where a failure has resulted in underlying damage, that damage should be repaired and the EIFS restored and properly sealed.
Others maintain that because caulk is subject to deterioration, the potential for future problems to recur is too great. They will insist on replacing all the EIFS with traditional stucco, wood siding or another type of exterior cladding.
Depending on how you want to proceed, you may be facing tens of thousands to hundreds of thousands of dollars in repairs.
Insurance Company Liability
Most of the time, contractors or suppliers being sued are counting on their insurance companies to pay any damages awarded. If their insurance company is able to evade financial responsibility, however, a large award could possibly bankrupt a small contractor or supplier. If that’s the case, you could win and lose at the same time.
Insurance companies have several ways to escape liability for EIFS claims. In recent years, many insurance companies stung by EIFS lawsuits against their contractor clients have specifically exempted EIFS liability from their coverage.
Even if EIFS is not specifically exempted, liability policies are uniformly worded such that the cost of repairing the damage caused by EIFS failure is covered, but the cost of repairing or replacing the EIFS is not.
One little bit of good news arising out of a Texas case, however, is that insurance companies can still be liable for damage even if it is not discovered until after the policy expires. The Texas Supreme Court ruled that insurance coverage was triggered “when injury happens, not when someone happens upon it.”
Whether this applies to your state or your case requires the advice of a qualified attorney in your area.
If you need assistance finding an attorney, please contact us using the form on the right.
Related Articles
- What is EIFS?
- When Do You Need a Construction Defects Attorney?
- Construction Defects - Cracked Stucco
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