A Texas court recently affirmed the dismissal of construction defect claims by a residential condominium unit owners’ association because it lacked standing to assert claims against the developer, general contractor, and subcontractors of a new high-rise project in Houston. The case involved a high-rise, multi-residential, and retail development with alleged construction defects in the windows and resulting damage from water intrusion into some of its approximately 400 condominium units. The owners’ association brought suit against the project developers, the general contractor, and the window subcontractor, alleging negligence, negligent misrepresentation, breach of implied warranty, breach of fiduciary duty, and violations of the Texas Deceptive Trade Practices Act arising from the alleged defects.

The defendants won dismissal by arguing that Section 82.102(a)(4) of the Texas Property Code did not confer standing on the owners’ association to bring its claims because the statute expressly excepts any actions prohibited by a condominium’s declaration. For this development, the condominium declaration prohibited the owners’ association from bringing claims based on alleged defects in the condominium units or common elements. The defendants also asserted that the owners’ association lacked common law standing because it did not own, and had no interest in, the units or common areas, and thus suffered no injury from the alleged construction defects.  Read more: