Construction defects can occur due to deficiencies in a product itself or how something is designed, installed, operated, or maintained. Some damages can be noticed immediately, and others will develop over time. When there is a construction claim, you must first determine its type and move forward. Below is a brief overview of the different types of construction defects:
- Design Deficiencies: This type of defect refers to the architects or engineers in the design of a building or system;
- Material Deficiencies: refers to the failure due to defective or damaged building materials, such as interior products that do not last as long as intended;
- Construction Deficiencies: poor quality workmanship, which can cause various damages. For instance, Improper plumbing work can result in leaks that might promote mold growth;
- Operational and Maintenance Deficiencies: the failure of the owner to use or maintain the structure or system properly. For example, keeping the temperature on an HVAC system too low through the winter, causing pipes to freeze.
What Are Construction Defects and Related Lawsuits?
A construction defect is any physical condition that diminishes a structure’s value or harms its occupants’ health or safety through a flaw in design, materials, or workmanship. For instance, faulty drains, cracks in the foundation, or settlement problems caused by inadequate grading and drainage.
Usually, in a construction project, multiple parties must collaborate to build the home. It involves materials from many different manufacturers; therefore, defects are not unusual. The main problem with these defects is determining the issue’s source. It is crucial to detect construction defects earlier on. If your builder provided a warranty, it is of limited duration. If you need to file suit, you must be aware of the state statute of limitations deadlines.
Many builders have written warranties with the construction of the home. However, if a builder fails to provide a written warranty, a warranty may be formed by state law. For instance, most state courts recognize an “implied warranty of habitability” that entitles the owner to a remedy for major defects that make the building unusable, regardless of whether there is a written warranty. There are regulations each state has regarding these warranties. Being aware of these warranties can be helpful for any defective construction claims.
However, some defects are not covered by the builder’s warranty. For instance, a builder’s warranty does not typically cover defective appliances. There is also a manufacturer’s warranty that encompasses products not covered by a builder’s warranty.
Certain procedures must be followed to report a defect. You can make a phone call to the builder to better understand how to proceed further with any issues. You can inspect your property and determine what needs to be fixed.
You can hire a professional in the field to figure out the source of the problem and avoid making the problem worse. If the builder does not respond to your satisfaction, you can look at the original contract to determine if you need to consider mediation for the disputes.
Furthermore, construction defect lawsuits can be initiated through various theories, such as negligence, breach of contract, breach of warranty, fraud or misrepresentation, or strict liability. Naming the parties may be challenging because sometimes the contractors you hired are no longer in business. If the issue or defect is major, the builder may not provide relief immediately. Therefore, plan and investigate the issue to determine the actual source of the damage.
What Are Some Issues That Arise When Dealing With These Lawsuits?
There has been a common issue when handling these sorts of claims. Generally, the builder’s insurance does not cover accidents or faulty work in their policies. There is a chain of miscommunication among the builders and insurance companies, which can create a lot of frustration, especially if you want to fix the problem smoothly.
However, some state courts rule that the coverage applies to negligent or defective work, and it is considered unintentional from the insured’s point of view. The coverage will vary depending on the type of homeowners’ insurance. Different policies warrant the manifestation of the defect. Furthermore, not all of them include defects in materials and workmanship from coverage. You need to determine your insurance coverage before you can file a claim against them.
Moreover, construction defects fall into only two categories: patent and latent. There are some differences among them. The patent defect deals with visible problems, such as a crack in the foundation. The latent defects deal with more hidden defects that cannot be detected until construction completion. Construction defect litigation mostly deals with experts specializing in specific construction areas to examine the defect, assess the cause, and recommend how to fix it.
The liability for the defects can be attached to anyone who collaborates on a construction project and who can be deemed liable for damages if a customer sues. Construction defect cases depend on the agreements between the homeowners and their developers, general contractors, or subcontractors, as well as between contractors and their architects, suppliers, and engineers.
Moreover, there are various ways in which disputes can be resolved regarding construction defects. Each jurisdiction has a statute of limitations and repose that must be followed through. The statute of limitations is the deadline for filing a lawsuit after discovering a construction defect. The statute of repose is the deadline by which homeowners can file a lawsuit even if they have not noticed a construction defect.
Lastly, the International Risk Management Institute (IRMI) signifies that liability coverage for claims alleging construction defects remains up for debate in the insurance industry and the courts. Each state adheres to its regulations and standards of how these claims and litigations move forward.
Besides pinpointing the source of the issue, another concern in these lawsuits is holding the various parties liable, meaning several different contracts cooperate on one project. Depending on their roles, insurance coverage may change. Also, some subcontractors sometimes are hard to get a hold of. According to the IRMI, the commercial general liability policy excludes coverage for property damage to the insured’s completed work.
It is recommended to obtain insurance for all workmanship. This will ensure you can place liability and cover it under your insurance policy. Having all parties ensured is a smart move in every project. Insurance policy terms and how they relate to you as a policyholder are crucial. You should create realistic expectations and goals through these insurance plans or policies. ≈
The law shifts frequently, especially in a growing industry. Real estate is an enormous industry, and builders are integral to it. To avoid issues with coverage and liability in the future, you can mandate in your contracts or add subcontractors as additional insureds on your general liability policy.
When Do I Need to Contact a Lawyer?
Defective construction claims can be challenging to resolve. However, there are ways to make the process easier. As stated earlier, determining the source of the issue can help you understand who can help. Also, having a reliable insurance plan will be crucial in these cases. If you face issues, do not hesitate to contact a construction lawyer near you to discuss your concerns.
