What Is the Construction Defect Claim Process? Step-by-Step Guide

A construction defect claim usually moves through several steps: identifying the problem, preserving evidence, investigating the cause, determining who may be responsible, complying with any required notice procedures, and pursuing repair, settlement, arbitration, or a lawsuit. Depending on the circumstances, the outcome may involve repairs, financial compensation, a settlement, arbitration, or a court decision.

Construction disputes can grow once people start asking questions. The contractor may blame a subcontractor. The subcontractor may point to the architect’s plans. Someone may argue the problem is ordinary wear and tear, improper maintenance, or an issue unrelated to the original construction. By the time everyone has an explanation, you may have several versions of what went wrong and no agreement on who will pay.

If you have questions about a potential claim, use the Super Lawyers directory to talk with a construction defect attorney.

What Is a Construction Defect Claim?

Construction defect litigation can arise from a broad range of situations:

• Defective construction
• Design defects
• Code violations
• Defective materials
• Latent defects
• Structural failures
• Breach of contract

However, not every issue that arises with a building automatically creates a viable legal claim. Several factors determine whether a claim is viable. Review the construction contract, warranties, agreed-upon plans, inspection reports, the nature of the damage, and applicable state law.

Step 1: Identify and Document the Problem

The first step in making a claim is identifying an issue. A property owner or someone else may bring the defect to your attention, such as a homeowner’s association or another interested party. Document the issue as early as possible with photographs and/or video.

Record when you first identified the issue. Keep any documentation related to how the issue arose. Preserve contracts, warranties, plans, change orders, and communications.

Avoid unnecessary repairs that could destroy evidence before you adequately document or inspect the condition. These are different from emergency repairs, which may still be necessary to prevent further property damage or protect people.

Step 2: Investigate the Alleged Cause of the Defect

Before deciding who should pay for a construction problem, you need to know what actually caused it.

The most obvious sign of trouble may only be a symptom. Water intrusion, for example, could result from roof leaks, defective flashing, improperly installed windows, drainage issues, or other building-envelope problems.

Foundation cracks could point to settling, drainage problems, soil conditions, or construction defects. Visible damage tells you something is wrong, but it doesn’t necessarily tell you what.

That is where a closer investigation can help. Depending on the problem, an inspector, engineer, architect, contractor, or other expert may need to examine the property, review the construction documents, perform testing, and determine the source of the defect.

The investigation may also help establish how extensive the damage is, who may be responsible, and what repairs are needed.

Why Identifying the Cause Matters

The person who installed the defective component may not be the only person with potential responsibility. A claim could involve a general contractor, subcontractor, developer, architect or engineer, or a manufacturer or supplier.

Once multiple parties are involved, determining responsibility can quickly become complicated. A problem that initially looks like a simple repair may become a dispute over design, workmanship, materials, or multiple contributing causes.

Step 3: Review the Documents

The construction contract should be one of the first documents you review after identifying a potential defect. Contracts commonly include provisions on how to handle disputes, including requirements for written notice, inspections, opportunities to repair or cure an alleged defect, mediation, arbitration, or other forms of alternative dispute resolution.

Warranties should also be reviewed carefully. An express warranty may establish specific obligations concerning the quality or performance of the work, while other warranty rights may arise under applicable law. The terms of those warranties can affect available remedies and how a claim should be pursued.

Contract terms aren’t the only requirements that matter. State law may impose pre-suit procedures even when the contract does not address construction defect claims. Depending on the jurisdiction, a claimant may need to provide notice, participate in an inspection process, or satisfy other requirements before filing suit. Because these rules vary by state, review the contract and applicable law together.

Step 4: Give the Appropriate Parties Notice

Once you’ve investigated the defect, the next step may be to notify the contractor or other potentially responsible parties about the problem. Depending on the circumstances, the construction contract or state law may require a specific form of written notice before a claimant can pursue legal action.

Notice requirements vary by state and may depend on the type of construction involved, the parties involved, and the terms of the contract. Some states require a claimant to give the responsible party an opportunity to inspect the property, investigate the alleged defect, or propose a repair before filing a lawsuit. Florida, for example, has a statutory pre-suit process that requires notice and gives the recipient an opportunity to inspect and respond.

Why This Step Can Be Risky To Handle Incorrectly

A notice may need to include specific information and be sent to particular people or entities within a certain timeframe. There may also be waiting periods or response deadlines that must be followed before litigation can begin. Missing a notice requirement or sending an inadequate notice could delay or complicate a claim.

Because these rules vary significantly by state, consider getting legal advice before sending written notice, especially if the defect is serious or a filing deadline is approaching.

Step 5: Allow Inspections and Further Investigation

After receiving notice of a potential construction defect, the contractor or other potentially responsible parties may want to inspect the property themselves. That can bring more people into the picture, including subcontractors, engineers, architects, insurance representatives, and other experts with their own opinions about what went wrong.

A visible problem does not always tell the whole story. Further investigation or testing may be necessary to determine whether a defect exists, what caused the damage, how far the problem extends, and what repairs are needed. Some testing may be invasive or destructive, so the parties may need to coordinate how and when it will take place.

The results of these inspections can play a major role in determining repair costs and whether the parties agree on a possible resolution. Keep records of inspections, testing, photographs, reports, and any changes to the property’s condition. If the dispute moves forward, that documentation may become important evidence.

Step 6: The Parties Exchange Responses

An inspection doesn’t automatically mean the contractor admits responsibility. Once the inspection results are provided, the parties could agree that repairs are necessary and offer to perform them. They may offer a monetary amount to compensate for the repairs and resolve the dispute. They may also deny any responsibility for the defect. This response could be coupled with a claim that another party is responsible.

For building owners, this is where the dispute can become more complicated. An offer to repair may sound like a simple solution. However, questions can remain about whether the proposed work will actually fix the underlying problem. The parties may also disagree about the scope of the repairs, the cost of the damage, or whether implied warranties apply.

Carefully review any response before agreeing to a resolution. A settlement or repair agreement can limit the ability to bring additional claims later. Legal representation can be particularly helpful when reviewing proposed repairs, settlement terms, releases, or disagreements about who is responsible for the defect.

Step 7: Try To Resolve the Dispute Without Going To Court

Many construction defect disputes can potentially be resolved without a trial. Multiple alternative dispute resolution options are available, depending on the jurisdiction. The contract may also include dispute-resolution terms. If so, the agreement will govern how disputes are resolved, provided it complies with applicable state law:

• Direct negotiation
• Mediation
• Arbitration
• A negotiated repair agreement
• A monetary settlement

These dispute resolution options are often used because they offer the parties an opportunity to resolve the dispute more quickly and affordably than through litigation.

Step 8: File a Construction Defect Lawsuit

If all other efforts to resolve the situation have been unsuccessful, the final option may be to file a construction defect lawsuit. Litigation may be necessary when the responsible party refuses to acknowledge the claim, negotiate a resolution, or propose an acceptable repair.

It may also be necessary if the parties try to negotiate a settlement but cannot agree on an acceptable resolution. Many states impose a statute of limitations. This is the deadline by which you must file a lawsuit. Knowing the date is crucial because once it passes, you are likely barred from seeking recovery through the court system.

The legal process can vary by jurisdiction. Generally, you file a lawsuit in the county where the property is located. The other named parties are then served with notice of the lawsuit. The case moves through the legal process, which may include mandatory court mediation, hearings, and eventually a trial.

At trial, the parties present their arguments and supporting evidence. The jury or judge then decides, and the court issues a ruling.

How Can a Construction Defect Claim End?

Several outcomes are possible in a construction defect claim. The specific outcome depends on the facts and the parties involved. The responsible party may perform the necessary repairs.

The parties may reach a negotiated financial settlement. The claimant may receive monetary compensation to address the defect. Arbitration could resolve the dispute. If the situation goes to trial, a judge or jury may decide the outcome.

In some situations, the property owner may be unable to recover damages. A claimant may face problems involving causation, proof, contractual limitations, legal deadlines, or other defenses.

Hire a Construction Defect Lawyer

Construction defect claims can involve far more than proving that something went wrong. An attorney can help you understand your rights, evaluate your options, and address problems as they arise.

Use the Super Lawyers directory to find an experienced construction litigation lawyer in your area.