Defects in a New Build – How Condominium Owners Secured Their Rights
Key facts
- Area
- Construction law
- Client
- Condominium owners’ association
- Damage
- Leaking underground car park in a new build
- Remediation cost
- CHF 1.4 m
- Settlement
- CHF 1.1 m from contractor and insurer
- Remainder
- Renovation loan over ten years
Names, figures and details have been changed to protect confidentiality.
It is a wet Monday morning in November when Ruth B. walks down into the underground car park and her feet get soaked. Between spaces 7 and 8 the water stands two centimetres deep, and a brown stain runs across the concrete ceiling above. Four years have passed since she and her husband moved into the new flat on the third floor. That evening she writes to the general contractor. The reply arrives three weeks later and is two sentences long: the problem is poor maintenance of the drainage. They regret it.
Eighteen owners, one problem
The development on the edge of town has 18 flats, a shared underground car park and a roof terrace everyone was proud of. The owners are a cross-section of society: young families, a retired teaching couple, two investors who rent out their units. Ruth B. chairs the owners’ committee, a role that until now consisted mainly of budget questions and house rules.
At an extraordinary meeting in January, the property manager presents a first estimate. The waterproofing above the car park is leaking in several places, and the water has already reached the reinforcement. The repair will cost around CHF 1.4 million. The renewal fund holds CHF 120,000. The room falls silent as everyone does the maths: more than CHF 70,000 per flat.
Then the questions start, and nobody has an answer. Who can actually make a claim against the contractor, the community or each owner? Did anyone formally report the damp patches that were already visible two years ago? And how much time is left? One owner says he has heard that after five years it is all over. He is right, and four of those years have gone.
A race against the calendar
A week later Ruth B. and two committee members sit down with FiPAX. They bring a binder of purchase contracts, minutes and four years of e-mails, unsorted and incomplete. FiPAX does not start with the damage. It starts with the calendar.
In Switzerland, warranty claims for buildings become time-barred five years after acceptance of the work. The common parts of the development were accepted a little over four years ago, earlier than most of the flats. Only just over six months remain. An expert report, negotiations and, if necessary, a lawsuit will only fit into that window if action is taken at once.
The notice of defects is even more delicate. Since 1 January 2026, buyers of a building have 60 days to give notice of a defect, and the right to have it remedied can no longer be excluded by contract. That does not help these owners, because their purchase contracts were signed before then. The old law still applies to them: a defect must be notified immediately once discovered, which in practice means within a few days. Wait too long and the claim is lost, even if the defect itself is undisputed.
How long do buyers have to give notice of a defect?
What counts is the date of the purchase contract, not the date the defect appears.
FiPAXAll 18 owners were still under the old law. Courts generally allow only a few days.
That same week, FiPAX therefore sends the contractor two letters. The first is a precautionary notice of defects on behalf of every owner who has signed a power of attorney. The second contains a request that is rarely made, although it is the obvious one: a written declaration waiving the statute-of-limitations defence for two years. A contractor who refuses signals that he is playing for time, and must expect a debt enforcement request, which also interrupts the limitation period. Eleven days later the signed waiver arrives. For the first time in months, the owners have gained time instead of losing it.
Who actually owns the claims?
The following weeks are painstaking work. FiPAX lays the 18 purchase contracts side by side, the way one would otherwise compare mortgages. It becomes clear why condominium owners so often come away empty-handed when defects appear. Warranty claims do not belong to the community but to each buyer under their own contract. And the contracts are not identical: three buyers from the first phase signed an older version with a far-reaching exclusion of liability, and two flats have changed hands since.
The breakthrough comes from an unremarkable pile of e-mails. Two owners had reported the damp patches on the garage ceiling to the contractor in writing two years earlier, with photos. A member of staff had replaced a silicone joint at the time and closed the case. That proves both that the defect was notified and that the contractor knew about it. The maintenance excuse suddenly looks weak.
So that the community can speak with one voice, the owners assign their claims relating to the shared waterproofing to the community. Sixteen sign straight away. The two investors hesitate until FiPAX shows them what going it alone would cost. At the next meeting the decision to act jointly is unanimous.
From a flooded garage floor to a settlement
The key steps, counted from acceptance of the common parts
FiPAX
An expert report that would stand up in court
In parallel, the community commissions an independent structural engineer. FiPAX insists that he has no ties to the property manager and that the contractor is invited to the site inspection. A private expert report is only as strong as its independence, and it must still carry weight if negotiations fail.
The findings are clear. The waterproofing at the joints with the light wells was not executed to recognised standards, the falls are wrong, and at one point a drainage pipe simply ends in the soil without being connected. The engineer confirms repair costs of CHF 1.4 million and notes that every additional winter increases the damage to the reinforcement.
This has nothing to do with maintenance. The water never had a way to drain.
Negotiate rather than litigate
With the expert report, proof of notice and the limitation waiver in hand, FiPAX brings the contractor and its liability insurer to the table. The first offer comes quickly: CHF 150,000 as a goodwill gesture, without any admission of liability. The owners decline.
FiPAX sets out the path the owners would otherwise take: conciliation, a lawsuit, a court-appointed expert. Proceedings of this kind typically take three to five years and cost both sides a great deal. For the contractor there is another risk. He is building the next development in the same municipality, and a lawsuit over a leaking car park is hardly helpful when it comes to selling flats.
After three rounds of negotiation, the settlement is agreed. The contractor and the insurer together pay CHF 1.1 million. The work is carried out by a firm chosen by the owners and supervised by the same engineer who documented the damage.
From the first offer to the settlement
Amounts in CHF
FiPAXThe settlement covers almost four-fifths of the repair costs.
The rest is a financing question
That leaves CHF 300,000. This is where it shows why FiPAX thinks about law and financing together. A one-off special levy would have pushed the retired couple and at least one young family to their limits. Instead, the community takes out a renovation loan, repaid over ten years from moderately increased contributions to the renewal fund. For most owners this comes to around CHF 160 a month.
Who pays the CHF 1.4 million?
Without a settlement, the owners would have paid almost everything themselves.
FiPAX
The following summer, the car park is dry for the first time in years. At the next owners’ meeting, the renovation item takes ten minutes. Ruth B. has resolved to keep the deadlines in the committee’s calendar from now on, right next to the budget.
Defects in a new build? Two deadlines that matter now
Record the date you discover a defect and notify the seller or contractor immediately, in writing and with photos. Whether you have 60 days or only a few depends on the date of your contract.
Keep an eye on the five years from acceptance. That period keeps running even while you negotiate, and it can only be stopped by a waiver or a debt enforcement request.
We will review your deadlines and claims before it is too late.
Out of respect for our clients’ confidentiality, names, figures and other details have been altered or are illustrative.