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New-Home Construction Defects: When Can You Sue the Builder?

After opting for new-home construction so that everything is perfectly new, you may find that everything isn't so perfect. Construction defects are unfortunately a regular occurrence in the building industry, and homeowners can sue for damages. But perhaps the more pressing question isn't can they sue, but when can they sue.

Construction Defects: A Primer

Construction defects are defined as conditions in your home that reduce the home's value. Some defects are patent, or apparent, such as erroneously using black paint in the bathrooms instead of blue. And other defects may be latent, or hidden from plain sight and not normally discovered during a reasonable inspection.

A homeowner can sue various parties for almost any construction defect. Suits for construction defects can come as many different causes of action. Common theories include:

  • Contract dispute, based on the construction contract
  • Tort claims, such as negligence
  • Breach of warranty
  • Strict liability of the general contractor
  • Fraud

Statute of Limitations and Statute of Repose

Here is where the "when" part kicks in, and it gets complicated. Each of these different causes of action is based in state law. Every state's laws can and will differ. Adding to the complexity, each different state law has a different statute of limitations and statute of repose, which will determine if and when you can file a suit. The statute of limitations is the time allowed for being able to sue after the defect was found or should have been found. Statute of repose is the limit for filing a lawsuit starting from the time of the event (such as delivery of the home), even if the defect has only recently been found.

For instance, if you find that the wrong type of pipe was used for draining sewage on the home you had built seven years ago, you may choose to sue under your state's breach of warranty laws. You may find the statute of limitations in your state for that defect is nine years, but the statute of repose is eight years, so you only have one year left to file your lawsuit. As you can see, it is very important to understand the statute of limitations and statute of repose for your state, defect, and cause of action.

For a complete list of these limitations, check your state's civil code. But a basic rule of thumb on statute of limitations is about two years against HVAC and window seal defects, and cosmetic defects. The period extends to ten years for major structural defects on building components, such as foundational cracks and leaks, sagging steal and roof support beams, decks, and windows.

What Should I Do If I Find a Defect?

Although this sounds very complicated, don't get scared off! Construction companies get most of their business through word of mouth, and thus are extremely motivated to have happy customers. If you find a defect, discuss it with your contractor. They might find it's most beneficial for them to fix it, regardless of legal obligation. If not, you may need to talk with a lawyer to wade through this set of complicated rules and see if you have a valid cause of action. Awards can be quite lucrative. For example, a Texas couple won a 14-year battle with the home builder, which included fighting some dirty politics, and ended up with a $58 million award, with $40 million being for punitive damages!

More important than the money is the peace of mind. As Raymond Hull once said "Peace of mind is attained not by ignoring problems, but by solving them". Whether this is your forever home or one that you're flipping for your livelihood, you deserve peace of mind. If you feel you have a construction defect, move forward towards resolution today by calling a local housing and construction defects attorney, because you may not be able to legally settle it tomorrow.