I stumbled across this homeowner's association report from the Marsh Harbour Resort in Calabash, North Carolina. They had significant stucco issues and the most incriminating comment was stated as simply, "The total cost of repair is unknown."

PLEASE NOTE: I have copied the information here to have in case they drop the information from public access. The original can currently be found in the Archive section at

Stucco Issues

Last edited 11/27/2002


Some time ago the property management company (Golf Coast Realty, Inc) for the Marsh Harbour Resort (Marsh Harbour Golf & Yacht Club Interval Ownership, Inc.) notified the Marsh Harbour Board of Directors of  a potentially serious latent defect in the timeshare condominium buildings.  The problem is in the synthetic stucco product which was originally applied to the buildings at the time of their construction.  The synthetic stucco product captured moisture which was retained in the building walls causing rot to the stucco substrate and in some cases,  structural features such as joists and studs.

In an effort to protect the Homeowners Association from solely funding extensive repairs, the The Board of Directors authorized the Homeowner's Association to join into a class action lawsuit against the collective manufacturers of the synthetic type stucco.  In February, 2000 the Board of Directors agreed to a settlement before the lawsuit was to go to trial.  In that settlement, the primary stucco manufacturer, Bonsal, paid out $103,634  to the Marsh Harbour Homeowners Association for the purpose of funding repairs to the buildings caused by the synthetic stucco product.  This settlement represents the maximum amount which the Board of Directors could expect to receive from this action. 

The total cost of repair is unknown.  Detail estimates for the repairs to the buildings cannot be completed until each building is stripped of the exterior synthetic stucco siding.  Then, upon inspection to the stucco substrate and building members, a more accurate estimate for repairs can be made.

The Board of Directors authorized the use of the settlement funds to investigate and estimate the cost of the total repair by using a test area of one of the buildings.  The most suspected damaged area was chosen, the area consisting of all of the exterior of Unit #12, and the rear of Units #11, #15 & #16 which comprises an area of approximately one third of one building.  

The Board of Directors reviewed the costs of the repair to the test site at the Annual Meeting on May 6, 2000 and decided to continue the repair to the Phase II building in the fall of 2000.  Repairs during the summer prime season were not considered since reconstruction would interfere with our owner's and RCI exchange vacation plans.


Update: 11/15/2001

The remainder of the Phase II building was completely redone in October, 2000.  The building looks new again.  The rear pool side of the Clubhouse also was repaired.  The Phase I building will need to be repaired in the same fashion.  We expect the repair of the exterior of the Phase I building by year-end, 2002.

Update: 11/27/2002

The rear of the Phase I Building was repaired in October, 2002.  The exterior stucco was removed in some places where damage was evident.  The building was structurally repaired and new dining room windows were added where there had been sliding glass doors previously.  The building is now in good shape, but further repairs to the front of the building will be required.

Stucco Problem Detail

The Marsh Harbour Condominium buildings were constructed from 1989 - 1991 and are approximately ten years old.  At the time of their original construction, the siding selected for the building exteriors was a synthetic stucco material also called EIFS (Exterior Insulation and Finish System) which had the appearance of traditional stucco, but could be used on wood frame buildings and had a guarantee that the synthetic stucco material would not allow moisture to penetrate into the building on which it is applied.

During the class action lawsuit discovery proceedings, it was revealed that the synthetic stucco manufacturers had knowledge at the time of installation, that the EIFS (system) which they were applying had a latent defect, yet the manufacturers continued to promote and sell this product.  The defect was described as a "trap" for water and moisture which could not escape the exterior of the buildings on which the synthetic stucco was applied.  In effect, the synthetic stucco was a closed system which did not allow the underside of the stucco (also called the substrate) to breathe.  

After years of moisture infiltration, the substrate begins to rot and the rot will intrude into the structural members of the building.  There is no apparent problem noticeable from either the exterior of the building or from sheetrock surfaces on the interior. (The sheetrock interiors were protected by a moisture barrier installed during construction.)  The damp wood substrate invites wood destroying insects which also add to the damage.  

In the case of the Marsh Harbour buildings, the damage was detailed in an investigative report commissioned by the Board of Directors and used in the class action lawsuit pretrial discovery and investigation.
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