Who Is Liable for Construction Defects?

Use these links to jump to different sections:

• Common Types of Construction Defects
• Causes of Action
• Remedies
• Questions for an Attorney

If you have ever been involved in a home improvement or building project, you know many issues can come up in the construction process.

One issue is construction defects. Whether it’s a structural failure, electrical problems, or faulty materials, construction defects can cause significant frustration, delays, and expenses.

Especially if it’s a bigger construction job, figuring out who is responsible for the defect can be challenging since many parties can be involved.

 “In many states, you can pursue claims against a builder, subcontractor, or design professional, and sometimes even an insurance company,” says Colorado construction litigation attorney Jeffrey Kerrane.

Once you’ve identified the responsible parties, figuring out the best way to deal with the problem is another challenge.

This article will cover common types of construction defects and the kinds of legal action you could take. Because of the many types of construction defects, it’s important to talk to a lawyer about your situation.

Common Types of Construction Defects

There are as many kinds of construction defects as there are different construction projects.

Some common types of construction defects include:

• Design defects. If architectural designs are faulty, or if good designs aren’t followed, serious problems can result in plumbing, roofing, electrical systems, or structural stability. Many design defects involve violations of local building codes or other ordinances.
• Building defects. Shoddily built buildings can create many problems and unsafe conditions for the homeowner, from structural failure to water damage from leaky roofs. A poorly built house may violate building codes or fail safety inspections, leading to expenses and delays.
• Material defects. Using cheap or inferior materials can result in hazardous conditions and require repairs or replacements. Even if the materials used are adequate, they may not be the materials specified in the contract. For example, if a contractor does not use the tile or wood flooring agreed to in the contract, the flooring is defective.

What About Latent Defects?

Some construction defects, like a sagging roof or crack in the wall, are obvious.

Other defects are latent, meaning they may not be immediately apparent, but will cause issues over time. Latent defects include leaky roofs or improperly installed windows that let moisture inside the house, causing water damage or mold.

Obvious defects are apparent right away, while latent defects may take months or years to notice. The distinction between obvious and latent defects is important since, in most states, the timeframe to file a lawsuit (called the statute of limitations) starts to count down from when you were aware or should have been aware of the defect.

Distinguishing between an obvious and latent defect can be pivotal in staying within this deadline.

Sometimes homeowners only discover a defect when it’s too late to take any legal action in their state: “There has been a trend in the last few years [among state legislatures] to try to limit the time that homeowners have to bring claims,” says Kerrane.

This restriction can be problematic since “some damage takes years to become obvious [and] by the time you realize there’s a defect with the construction, it could be a few years down the road. [At that point], it might be too late to bring a claim against the builder.”

It’s important to be aware of your state’s deadlines for bringing a claim. Speak with an experienced construction lawyer to understand your state’s deadlines and your options should deadlines have passed.

Causes of Action

If you have a construction defect, what can you do?

The legal claims a property owner might be able to bring will depend on their state’s laws. In general, however, there are several types of legal action for construction defects:

• Breach of contract
• Negligence
• Express and implied warranty issues
• Breach of a homeowner association’s declaration or covenants, conditions, and restrictions (CC&Rs)
• Professional negligence against a design professional

Some states also allow strict liability claims in construction defect issues. Strict liability especially comes up “when talking about production homes” manufacture, says Kerrane.

Let’s focus on a couple of claims: breach of contract and negligence.

Breach of Contract

Depending on the type of construction project, construction contracts can be relatively simple or highly complex documents. In general, contracts state what each party agrees to do in the construction project.

In a simple home improvement project such as kitchen renovation, the contract will say:

• The parties. The contract will say who is entering into the agreement–for example, the homeowner, the contractor, and any subcontractors.
• The scope of work. This part will include the project’s goal, the start date, the timeline for its completion, and who is working on what.
• Costs. This part of the contract will outline the project’s costs and who will be responsible for various payments, including materials and labor. For example, will the contractor pay the subcontractors with payment from the homeowner? Will the homeowner pay the subcontractors directly?  

Contracts may also lay out further provisions, including:

• Arbitration agreements. These clauses determine the method that parties agree to use to resolve disputes if they arise.
• Indemnity clauses. These clauses can be particularly important for determining responsibility for defects. Indemnity clauses essentially shift responsibility for defects from one party (such as a subcontractor) to another party (such as the contractor).

A breach of contract arises when a party fails to comply with the express or implied terms of the contract.

Express warranties

Express warranties are the explicit provisions of the contractual agreement. Construction is defective if it fails to meet the contractual specifications.

A building may be built safely, but it’s considered defective if it violates the contract.

Implied warranties

Implied warranties are not explicitly stated in a contract but are read into contracts by courts. They are provisions assumed to be present in any construction agreement. For example, it’s assumed in most jurisdictions that:

• Contractors will perform in a “good and workmanlike manner.” This means contractors are expected to perform with the competence and training typical of the construction industry.
• Contractors will ensure that the building is habitable. This means the building is safe and free of hazards.  

Negligence

If you do not have a contract, or if you are seeking recovery for:

• Personal injuries
• Property damage

Arising from construction defects, you can bring a tort claim for negligence. There are four elements to a negligence claim:

• Duty. The contractor had a duty to the homeowner to perform safely and reasonably.
• Breach. The contractor breached this duty by failing to use reasonable care. Reasonable care is essentially how a construction professional is expected to act in similar circumstances. So, the contractor failed to meet the industry’s professional standards in their actions.
• Causation. The contractor’s breach of duty caused the construction defect you have identified.
• Damage. You have been concretely harmed as a result of the contractor’s actions. This can include economic (property damage) or physical (personal injury) losses.

Another type of negligence claim is negligent misrepresentation. This is where the contractor or architect asserts something to the homeowner as accurate but has no reason to believe it’s true.

Negligent misrepresentation often comes up in defective design cases. The contractor presents the design as adequate when the contractor does not actually know if the plan meets safety or building codes.

Remedies

What can you get if you win a lawsuit for construction defects?

Like the different causes of action, this will depend in part on your circumstances and your state’s laws.

 “In a lot of states, the remedies for construction defects are limited to particular categories,” says Kerrane.

 These categories include:

• The cost to repair the defects
• Diminution of the value of the property
• Loss of use of the property
• Inconvenience losses if you must move out for the defect or repairs
• Recovery for litigation expenses
• Legal fees

It’s best to speak with a construction litigation attorney to understand what remedies your state provides for construction defects.

Questions for an Attorney

If you have a construction defect claim, seek legal advice from an attorney with experience in construction defect litigation as soon as possible. Many attorneys provide free consultations, allowing the attorney to hear the facts of your case and for you to determine if the attorney meets your needs.

To see whether an attorney or law firm is a good fit, ask informed questions such as:

• What are your attorneys’ fees?
• What billing options do you offer?
• Do I have a good construction defect claim?
• Do I have a breach of contract or negligence claim?
• What is the statute of limitations in my case?
• What can I get if I win my case?

You can visit the Super Lawyers directory and use the search box to find a lawyer based on your legal issue or location. 

Look for a construction litigation attorney in the Super Lawyers directory on matters related to construction defects.