Today’s Star-Advertiser features a condo story by Andrew Gomes on the front of the “Money” section (“Bad plumbing? Moana Pacific’s possible waterline problem has officials at odds and residents worried”).
The first few paragraphs establish the tone of the story:
Behind the reflective glass windows of the twin Moana Pacific condominium towers in Honolulu, either an imminent catastrophe is being averted or a panicked and costly decision is being made.
The view largely depends on whether you believe the board of the condo association or the developer of the 5-year-old buildings.
The condo association board wants homeowners to pay $8,000 to $28,000 per unit for plumbing repairs, which the developer says are not needed.
Perplexed by PEX
What is PEX?
A plastic tube system made from cross-linked polyethylene, or PE-X,?used for waterlines behind walls in homes and other buildings.
What is the problem?
Some, but not all, PEX?systems installed in recent years used brass connectors with high zinc content that corrodes, potentially leading to line breaks.
Where is the problem?
Two high-profile Honolulu condominium towers — Hokua and Ko‘o?lani — have replaced their PEX?systems because of problems. A third high-rise, Moana Pacific, plans to do the same, but owners disagree about whether it is necessary.
How expensive is the problem?
Moana Pacific has 706 residential units, each with 30 to 50 brass connectors, or 21,180 to 35,300 in the two towers. The estimated cost to replace the PEX system is $8.2 million, or about $8,000 to $28,000 per unit.
Both sides have attorneys, consultants and convincing arguments and are asking owners to back their position.
To say the least, homeowners are concerned.
Owners of other condos and buildings — not only high-rises — around the state also might find certain elements of the dispute relevant and perhaps troubling, including circumstances that allow homeowner association boards to make unilateral decisions.
I’m interested, both as a condo board member and because I’ve written about the PEX plumbing problem in condominiums before, back in August 2011, November 2008, November 2007, and in a Honolulu Weekly story.
Today’s S-A story, like its lead, slants towards the theme of a powerful and unaccountable board making “unilateral” decisions regarding management of the building and incurring questionable costs that all owners will have to pay.
But the situation is much different from the point of view of the board of directors.
Remember, condominium board members have a fiduciary duty to the owners of apartments. They are legally responsible for the management, maintenance, and repairs to the building. If they fail to make repairs even after learning about a problem, they can be held liable for subsequent damages. Condo boards are probably all aware of a lawsuit several years ago that resulted in a damage award against an association for failing to properly maintain a project. Some of the legal costs had to be paid by individual directors rather than by the association or its insurance policies.
Moana Pacific directors appear to have acted properly. They retained independent consultants to assess the situation and make recommendations. According to the story, the board’s consultants say the brass fittings must be replaced to avoid future leaks, property damage, and health risks.
On the other side is the original developer of the building, who says, “no problems here. Trust me.”
The developers say the installation method used at Moana Pacific is different and should not experience catastrophic failure, where water gushes out and can damage multiple units. Instead, the inevitable deterioration of the brass fittings will only cause leaks.
But remember. These are not leaks under the sink or in other easily monitored places. In the other buildings, most of the PEX piping was behind walls, where slow leaks would likely go undetected for some period of time.
And, without knowing specifics of the Moana Pacific situation, anyone in a high rise building now knows water in the walls means mold, and mold can create dangerous health risks.
So who should the board rely on? It’s own consultants or the developer, hardly an uninterested party, who stands to lose if the costly replacement project proceeds?
The story also walks past another huge thing these situations have in common–companies involved in construction of the Koolani condominium were insured by subsidiaries of AIG, the insurance giant that benefited from a $123 billion government bailout. Those companies are now trying to avoid paying claims and are denying liability.
A November 2010 letter to Moana Pacific owners cited problems with the same insurers in dealing with the plumbing issue.
These cases, involving relatively new condominiums sold at high prices, should concern condo owners. But the major issues have to do with the difficulty in holding developers and their many subcontractors accountable for costly construction defects, not questions about the authority of condominium boards, despite the S-A spin.
At least that’s my 2 cents after reading this morning’s newspaper.
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Again, at the risk of hurting someone’s delicate “sensibilities:”
Isn’t this the same project that experienced at least 1 serious accident during construction (and at least 1 fatality), and was idle so-o-o long?
Was it ever blessed thereafter?
Maybe it should it be renamed “Ho o Moana Pacific?” [Something like lie down or surrender pacifically.]
Right you are.
http://the.honoluluadvertiser.com/article/2007/Mar/16/ln/FP703160348.html
This is a mess of epic proportions. My uninformed opinion is that the AOAO Board is acting proactively in a case where a failure to act might result in enormous damage. My sense was that they wanted to fix the problem and then perhaps affix blame and litigate later. Seems sensible in light of the very spotty record for PEX. But, as I say, there are lots of details that I don’t know.
It’s amazing that, given the potential individual liabilities, any sane person would serve on an AOAO or HOA board. They get heaps of criticism and finger pointing and darn little thanks. I’m going to go out and hug a Board member. The cute one in unit 555. Hehehe.
in general, if a media person wants to break lots of news stories about the latest construction developments in Hawaii, I wonder what approach they need to take?
🙂
that said, i totally agree with the above comment:
“It’s amazing that, given the potential individual liabilities, any SANE person would serve on an AOAO or HOA board. They get heaps of criticism and finger pointing and darn little thanks. “
The AOAO is caught between a rock and a hard place in terms of liability. If they don’t do anything after they are notified that there is a serious problem with PEX fittings and the knowledge of the experience of the Hokua and Ko’olani, what can they do?
If they do nothing, they are personally liable for ignoring a known defect. If they act proactively, they are called alarmists and wasteful spendthrifts for making unnecessary repairs.
If the Chan family is so sure that there is no problem with the PEX system they approved and installed, then they should put up or shut up rather than ask the AOAO or the condo owners to shoulder the financial problems created by their decision to save money on the project.
The Chan’s should go to a bonding or insurance company and purchase a bond, insurance policy or an indemnity policy to cover any potential failures of the PEX system. The PEX manufacturer has a 25 year policy that covers the failure of its plastic pipe, not the fittings used or the contractors workmanship in installing the pipes and fittings. The manufacturer gets around the liability/25 year guaranty with the simple explanation that it was the failure of the fittings or the poor installation by the contractor.
Meanwhile, the heart of the liability was the decision by the developer and architect to use the PEX system versus the conventional copper pipes to save time and money.
Imagine if this were the 650′ tower that the Gov wants to build. 50% higher than the Moana Pacific building. 50% higher good lord!
It’s been at least 15 years since I went to look at model homes at Mililani Mauka and noticed that they used PEX for their interior plumbing. I haven’t heard of any problems with the PEX there.
That’s consistent with the hypothesis that the problem, or potential problem, is with the connectors and/or installation, not the PEX piping itself.
Glad that I don’t own a condo in Hawai’i.
What a bummer… I also got word today from a lender that they are no longer lending on Moana Pacific until this issue is resolved. If that’s the case, it will make owners have difficulty selling if their potential buyer pool is shrunken to only cash buyers
As a lender I agree with David. Any pending lawsuits have to be disclosed by the HOA.
They should put it to a vote of association owners. If the fix is not done, and the pipes fail at a later date, then the developer can be sued.
I remember reading that cheap brass fittings from China have a very high zinc content, and that the zinc then washes out of the brass, leading to buildup in the pipes and weakening the remaining copper.
If the developers used faulty high-zinc fittings, it would be expected that they would probably be held liable in a court of law.
There are other issues that I did not know about, but the following was useful.
http://knol.google.com/k/anonymous/facts-about-pex-tubing-and-pex-fitting/19yp2ug8iz123/116#
Zinc is also vulnerable to erosion by salty water, although that is probably not an issue in Hawaii.
There are other problems with PEX pipes, in that they are permeable and so their use can lead to the introduction of toxins into the water supply.
The plastic can also weaken under ultraviolet light. If this building’s pipes have been exposed to sunlight and display signs of weakness, then one might expect the developer to again be liable for the replacement.
Always go with copper.
http://www.youtube.com/watch?v=1slibJ52yoc
This is all a bunch a bull, blaming the pex product. Why isn’t anyone blaming dorvin leis? They installed it. Pex isn’t a new system, it’s been around a while and is in most of the newly renovated hotels and condos. The diff is, dorvin leis installation. The reason why the fittings are corroding is because of the chlorination of the lines. Look at the fitting in the picture, it corroded, copper sulfate. When they chlorinated the line, which they do on their own, they didn’t flush it out properly. Bad workmanship! The building was siting for months, the chlorine ate away at the fittings, duh! Don’t blame anyone else but yourselves!
We just did a feature on construction defects and insurance coverage that might add some perspective…
Http:/hidili.com/hawaiibarjournal
Well as of last year the lawsuit was settled. Prices jumped about 15% since then