Builder Warranty And Arbitration In Construction Defect Claims

In this article, you will learn…

• Why having a warranty doesn’t protect you from construction defect issues,
• How to pursue a builder who is bankrupt, and
• What the benefits of arbitration are.

Do I Have To Worry About Construction Defect Issues If My Builder Gave Me A Warranty?

Yes, you do have to worry about construction defect issues even if your builder gave you a warranty. The warranty is part of the purchase and even if it’s a 2-10 warranty, it isn’t much of a warranty. You have the express warranty, which is usually limited to one year.

The standards for repairs are usually very favorable to the builder versus the building code. That one-year warranty isn’t typically going to be in effect when your big problem shows up. Even if your warranty is expired, that doesn’t mean that you no longer have a claim against the developer.

It’s rare for a warranty to be a very good candidate for litigation. There have been cases where I didn’t even assert the express warranty claim because of the limitations of the warranty. I’d much rather have an implied warranty claim. Those are various fact specific decisions, which are important, and which you need to make.

If The Builder Or Developer Who Built My Home Is Bankrupt, Can I Still Sue Them For Construction Defects?

Even if the builder or developer who built your home is bankrupt, you can absolutely still sue them for construction defects. That’s why insurance is so important. While the builder’s default may cause some very significant limitations on recoverability, it doesn’t mean you don’t have the potential to recover from your claim.

Is Arbitration Mandatory In Construction Defect Lawsuits?

There is no black letter rule that makes arbitration mandatory in construction defect lawsuits. Many builders include arbitration clauses, which can lead to some very big fights. We’ve just had some cases like these that were decided by the South Carolina Supreme Court in favor of homeowners and against arbitration.

They can go that route and be compelled into arbitration, but each case will be fact specific. It isn’t always a bad thing to go into arbitration. It isn’t typically the best path for a homeowner, but there can be cases where it’s beneficial.

What Are The Benefits And Drawbacks Of Arbitration For Construction Defect Lawsuits?

Depending on the nature and severity of the defects, arbitration tends to move lawsuits more quickly because an arbitrator will have some background in construction law. When a case has become complicated due to a design defect or defects involving engineers, the arbitrator having some technical understanding can be very beneficial.

The biggest drawback of arbitration is that you don’t have a jury of homeowners or potential homeowners to decide your case. You won’t be able to identify with a jury and show them what you’re going through, how important your home is to you, or the investment you’ve put into it.

The second biggest drawback of arbitration is that discovery is limited on what documents or witnesses you will be able to find. Arbitration can also limit what an arbiter can award, whereas a jury won’t have that limitation.

What Are Some Alternative Methods To Resolve Construction Defect Disputes If The Builder Disagrees That There’s A Construction Defect?

If the builder disagrees that there’s a construction defect, alternative methods to resolve the dispute are very limited. In this situation, it is really important to have an attorney who is experienced in this area earlier rather than later in the process.

There may be some kind of offer of repair, but it typically isn’t going to make a homeowner whole or as close to whole as can be obtained. A lot of times the offers to repair are nothing more than bandaids on bullet holes. They don’t make money by fixing your house.

What Steps Exactly Should I Take If The Builder Does Denies The Existence Of A Construction Defect?

If the builder denies the existence of a construction defect, your first step should be to speak with an experienced attorney who knows this area of the law. You could save yourself a lot of time and money by getting the right advice early on in the process. An attorney can help you understand your potential rights and determine what warrants a lawsuit and what doesn’t.

The next step would be to take photographs which will prove a construction defect claim. Photographs by experts are extremely important because it is so hard to describe problems, especially ones that progress over time. It’s almost impossible to go back and try to prove this in litigation, so having those progression photographs is a huge benefit to you.

An attorney with experience in construction defects will be able to help you know the difference between good photographs and bad photographs for presenting to a jury or an arbitrator. A jury or arbiter will never be in your home or be able to see it for themselves, so these photographs are essential.

Why Do I Need To Hire A Lawyer Who Has That Specific Experience In Construction Defect Issues?

Construction defect claims aren’t the same as a lot of other types of civil litigation. There are a lot of different pitfalls in the law that can impact the claims and the potential recovery. An experienced attorney will know the best way to figure out a path to maximize your recovery.

There are pitfalls based on time, defenses, and failure to take some steps early on that can eliminate a claim or greatly reduce it regardless of the merits. There is far too much to know in the world of construction as to the various trades and what the responsibilities typically are. An experienced attorney will know procedurally how to put yourself in a good position to obtain a beneficial result.

For more information on Costs & Impact Of Construction Defect Claims, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (803) 361-4812 today.