Construction Defect Claims “Right to Repair”
BY: Mary Thompson, Capstone Brokerage President, August 30, 2016
Many states have enacted legislation that requires claimed defects on homes built to be reported to the builder in an effort to try and reduce the amount of Defect Lawsuits. What is being called the “right to repair” allows a builder to address the homeowner’s claimed defects and then repair the defect rather than being brought to court. The “right to repair” provides an avenue to the homeowner to seek repair on their home without having to open a lawsuit.
In Nevada the governor signed a provision which modifies the states “right to repair” statutes. Under the new legislation, before a homeowner can commence an action or complaint, they must provide written notification to the contractor and any known party that may be responsible for the defect. In other words they must contact those companies that may be involved in the defect and allow them reasonable time to repair the defect prior to initiating a lawsuit. In the complaint there must be a signed statement from all named owners verifying the defect, damage or if an injury exists.
The first step a homeowner must take is to submit a claim under the home warranty program. If the claim is denied by the warranty, the homeowner may submit a claim to the contractor and/or subcontractors, allowing them a chance to rectify the situation either by repair, settlement or disclaimer of liability. The contractor/subcontractor may elect to repair the defect at that point. However, if they do elect to repair the defect it may not be conditional up release of liability. If the contractor/subcontractor elects to not repair, then the homeowner and or contractor may bring a cause of action for the defect.
“Right to repair” statutes may seem to be straightforward; however, the interpretation and application of the statutes often lead to litigation. The biggest misconception is whether “right to repair” procedures are mandatory or optional. This poses an issue for insurance carriers when writing policies. It needs to be clearly stated what is and is not covered. Furthermore, it is important to understand the obligations and the need for addressing the implications on policy underwriting.
Homeowners will more than likely be required to do a walk-through and/ or home inspection prior to the close of escrow. Making a punch-list of items that need to be addressed and corrected will help to lower the likelihood of repair issues. There may be items that will not be “seen” at that time. It is imperative to document any needed repairs and address them promptly.
Contractors, subcontractors and homeowners should have a thorough understanding of their rights when it comes to new home construction and construction defects. Having a knowledgeable insurance broker that specializes in construction type policies is key for contractors and subcontractors. As a homeowner, it is always helpful to know your rights. For more information about your coverage and protection, be sure to understand the timelines for reporting defects as well as your personal homeowner’s policy.
Categories
- Benefits Resources
- Bonding
- BOP
- Business Insurance
- Commercial Auto
- Commercial Property
- Company News
- Construction
- Crime Insurance
- Cyber Insurance
- Directors & Officers
- Employee Benefits
- Employment Practice Liability Insurance
- Entertainment
- General Liability
- Health Insurance
- Healthcare
- Healthcare Reform
- Homeowners Insurance
- Hospitality
- Manufacturing
- Medical Malpractice
- Mining & Energy
- Nightclubs
- Personal Auto
- Personal Insurance
- Professional
- Restaurants
- Retail & Wholesale
- Risk Management Resources
- Safety Topics
- SBA Bonds
- Security
- Seminars
- Technology
- Tourism
- Transportation
- Uncategorized
- Workers Compensation
Archives
- May 2021
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- November 2018
- September 2018
- August 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- February 2013
- November 2011
- October 2011
- September 2011
- July 2011
- June 2011
- March 2011
- November 2010
- October 2010
- September 2010
- April 2010
- February 2010
- November 2009
- October 2009
- November 2008
- August 2008