How a Defect in Construction May Entitle You to Compensation

Construction defect claims are often exceptionally complicated due to the number of scenarios in which a defect in construction can occur and the various elements of construction defect law which determine whether you may be eligible to receive compensation.

This article provides details about the criteria that need to be fulfilled before it is possible to claim compensation for construction defects, some of the obstacles that may hinder the success of your claim and a list of the circumstances in which construction defects may entitle you to compensation.

No two compensation claims for a defect in construction are identical – even when the fault in construction, renovation or remodeling is the same – and it is in your best interests to speak directly with a construction defect attorney to obtain professional legal advice that relates directly to your particular circumstances.

The Criteria for Construction Defect Claims

The criteria for construction defect claims vary according to the applicable building code in your particular location. As a guideline if your property is unsafe, dangerous or built to lower standards than are required by your jurisdiction´s building code and has a “defect in construction which the owner did not know about and would not be expected to discover through the exercise of reasonable care” it should be possible to claim compensation under construction defect law – subject to the conditions in the later sections of this article.

Compensation for almost any defect in construction that reduces the value of a home, condominium or common area can be recovered in construction defect claims provided it can be attributed the negligence of the builder for:

  • Using defective building materials or components,
  • Failing to construct the property to accepted standards of workmanship,
  • Violating building codes at the time the property was being constructed, or
  • Failing to meet the professional standards for design at the time plans were approved.

Defects may have occurred because the general contractor (“builder”) failed to monitor the workmanship of sub-contractors or the materials they used, because earth movement conditions were not identified before or during construction (or were ignored), or because the builder has carried out sub-standard repairs after a defect in the original construction was discovered.

In order to determine that a defect exists which meets the criteria for construction defect claims, it is likely that you will need the services of an independent expert, who not only has the necessary industry qualifications to act as a credible source, but who also has the ability to act as an “expert witness” should your claim for compensation for construction defects require litigation in court. Due to the costs involved in hiring independent construction experts, it is advisable that you speak with a construction defect attorney before engaging the services of an expert.

Is Compensation for Construction Defects Recoverable?

Even when the criteria for construction defect claims are met it may not always be possible to recover compensation. Recovering compensation for construction defects, personal injury due to a defect in construction, damage to personal property, the cost of alternative living arrangements while your property is being repaired, and any legal costs you encounter are all subject to there being an insurance policy that construction defect claims can be made against.

Policies may be in place to cover claims for breach of contract when poor workmanship is responsible for a fault in construction, or to cover claims for breach of express and implied warranties – for materials being merchantable and suitable for a particular purpose. The issue of insurance coverage is a contractual area of law; but it can develop into tort law if a bad faith denial of a legitimate claim exists.

Just like warranties, insurance policies only cover builders´ liabilities for a set period of time. Whether you are able to recover compensation for construction defects will depend on when an insurance policy started and ended and whether it was cancelled or lapsed during the “time on risk”. There may also be issues with recovering compensation for construction defects when the insurance carrier against whom construction defect claims are made are unable to recover funds from a sub-contractor´s insurer.

Insurance carrier´s subrogation and their reservation of rights are key elements in determining whether it will be possible to recover compensation for construction defects and, if so, who construction defect claims should be made against. In this particularly complex area of construction defect law, it is strongly recommended that you seek professional legal advice from a construction defect attorney.

Regional Differences in Construction Defect Law

One of the issues most likely to determine whether you are eligible to claim compensation for construction defects is the Statute of Limitations. The Statute of Limitations is a legal principal which determines how long after a building has been constructed you are entitled to claim for a defect in construction.

In this respect there are regional differences in construction defect law and even varying time limits for different types of defects. For example, Nevada construction defect law defines three different statutes of limitations for construction defect claims depending on whether the defect is a “Parent Construction Defect” (6 years), a “Latent Construction Defect” (8 years), or a “Known Construction Defect” (10 years).

By contrast, Colorado construction defect law only allows one six-year Statute of Limitations – with construction defect claims having to be filed within two years of a defect being discovered – while a construction defect attorney in California must juggle with one, two, three, four, five and ten year statutes of limitations for different categories of construction defects. Fortunately California construction defect law allows construction defect claims to be filed within three years of a defect in construction being discovered.

How Liability and Comparative Negligence affects Construction Defect Claims

Further regional differences can be found in the way that liability is assigned to negligent parties and how a homeowner´s comparative negligence may affect the outcome of construction defect claims.

Typically a plaintiff sues the seller of the property or the general contractor who built it; who – in turn – sues the sub-contractors, material suppliers or other negligent party responsible for the defect; however there are occasions when construction defect claims are made against multiple parties – often complicating the claim, and taking longer for it to be resolved.

For example, construction defect law in California will consider a negligent party liable if they are found to be $1 or more culpable, whereas in some other States a negligent party has to be at least 50% responsible for a defect in construction before they are considered to be “jointly and severally liable”.

Construction defect law concerning comparative negligence can also be applied differently in various States.  Comparative negligence in construction defect claims most commonly occurs when a property owner has undertaken repairs to the defect in construction himself or herself. Although homeowners should take all reasonable steps to protect their property from sustaining additional damage, any temporary repair program should be undertaken with the assistance of an independent construction expert.

In most States, should the homeowner be considered comparatively negligent, how much compensation for construction defects he or she receives will be adjusted to account for their personal contribution to the loss or damage that has been sustained. However, in some States (for example North Carolina, Virginia and Washington DC – where comparative negligence is called “contributory negligence”), any extension of the original fault in construction that is caused by a property owner in the course of their own home repairs will disqualify them from being entitled to compensation for home defects.

Typical Construction Defects Reported by Building Owners

Below we have reproduced a list of typical defects that have been reported by property owners and which have resulted in construction defect claims. It is important to note that, just because your property suffers from one of these defects, you are not automatically entitled to compensation – nor are you exempted from compensation if the particular defect in construction affecting your property fails to appear in the following:

Water Intrusion

Water intrusion is one of the main contributing factors to building and structural damage, rot, termites and microbial problems that lead to illnesses. It is often caused by sidings being applied to a property without adequate moisture protection underneath or when the space between the roof sheathing and shingles lacks the necessary felt paper to prevent adequate waterproofing.

Defective Products

Using defective products in the construction of a property is another leading reason for construction defect claims. These issues can occur when builders try to cut costs by replacing materials and components with cheaper versions, or when the products that are used in the construction of a property are as specified, but are defective due to a manufacturing fault.

Faulty Installation

The faulty installation of any material or component can result in a defect in construction and there is rarely any justifiable defense against construction defect claims in these circumstances. Faulty installation is of particular concern when it relates to boilers and flues, as this particular area of negligence can be life-threatening.

Negative Slope

Having a negative slope means that the compacted soil beneath the topsoil surrounding your home is sloping towards your property with the result that water which drains through the topsoil accumulates next to the foundation. Improper fill and compaction issues can be expensive defects to remedy if the foundations of your property have suffered severe structural damage.

Mold

Mold growth can be attributable to water intrusion, poor ventilation or by the incomplete drying of concrete during the construction process. Mold presents a risk of personal injury to home owners and occupants, and studies have shown that children who come into contact with the mold spores at an early age are more likely to develop asthma as they grow older.

Poor Indoor Air Quality

Similarly poor indoor air quality (IAQ) can result from inadequate waterproofing, poor ventilation due to an error in design, or the use of materials that release an odor into the property. According to the National Energy Management Institute, as many as 8% of all commercial buildings in the US fail to comply with engineering standards for acceptable indoor air quality.

Stucco Cracks

Stucco acts as a property´s “envelope”, protecting it from rain and other external sources of water. When stucco cracks before its time, it is most often due to a faulty install or an incorrect mix of materials. The resulting cracks provide paths for water to damage the wood framing and metal components of the stucco, as well as deteriorating the overall condition of the stucco itself.

Flashing

Flashing supposedly provides a watertight seal between roofing materials, roof sections and other parts of the building. The incorrect installation of flashing, improper sealing of flashing or attachment to sections of the roof will allow water to enter the roof structure and result in mold and mildew developing as well as damaging the structural integrity of the property.

Inadequate Shear Walls

Proper bracing enables walls to absorb the forces of high winds and earthquakes, and most building codes include minimum requirements for shear walls and shear support to ensure the structural integrity of a property. The lack of shear support can have devastating consequences for a property, yet this particular defect in construction was listed fifth in Culver City´s “Top 10 Building Code Violations”

Failure to Build per Approved Plans

At the top of Culver City´s “violations” list was the failure to build per approved plans. This may seem like a minor technical issue – and it is rarely done deliberately – however, failing to build per approved plans can compromise the integrity of a property that has a complicated build system executed by multiple sub-contractors – and the safety of its occupants.

Class Actions for Construction Defects

In the opening section of this article, we stated that no two construction defect claims for compensation are identical, and this is not only due to the varying degree of damage that a defect in construction can have on two adjacent properties, but also because of the consequences that the defect has on the occupants.

It is quite common that property owners will join class actions for construction defects to save litigation costs, and these are often successfully concluded. However, judges have (wisely) ruled in the past that the common class issue does not predominate over individual issues and, if you have been invited to join a class action, you should still seek independent legal advice from a construction defect attorney to determine whether this is the best course of action for your individual circumstances.

Speak with a Construction Defect Attorney for Free

There are many further issues which may affect your eligibility to claim compensation for construction defects for errors in the construction of your home and – as mentioned above – it is always in your best interests to discuss the nature of the defect – and the consequences it has had on the value of your property and your personal health – with a construction defect attorney at the first possible opportunity.

We offer a toll-free claims assessment service which you are invited to call in order to speak directly with a construction defect attorney, who can provide you with an initial indication of whether you have a claim for compensation for construction defects which is worth your while to pursue and guide you on the procedures that are necessary to commence your claim.

If it is not a convenient time to speak with a construction defect attorney right now, please complete you details in the “Submit Your Claim Information” form below, giving us a brief outline of the fault in your property and the date (“Accident Date”) on which you were aware of it. We look forward to hearing from you and assure you of a professional and accurate service at all times.