Construction Defect Statute Of Limitations Infographic

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In order to create consistency and reduce litigation in the construction industry, most states have established “statutes of limitation” that affect lawsuits involving construction defects. These laws define a time limit, after which claims that arise from defects in design or construction can no longer be filed. They are also exceedingly complicated.

In fact, most state statutes of limitation actually involve three elements: the statute of limitations itself, a “discovery rule” that can extend the statute of limitations itself and a “statute of repose” that limits the application of the discovery rule. Confused? Don’t worry. We’ll walk you through all of these nuances right now.

Patent vs. Latent Construction Defects

First, let’s take a look at construction defects themselves. In general terms, there are two types of construction defect: patent ones and latent ones. Patent defects are readily apparent, while latent problems are hidden. This distinction might seem straightfoward, but it can have a major impact on construction defect lawsuits.

Run-Down House

To be clear, defects don’t need to be obvious to be classified as patent ones. The test that a court will use to determine whether or not a construction defect should be considered “patent” goes like this: would an average home buyer (not a specialist home inspector) discover the problem in the course of a reasonable inspection? If so, the defect is a patent one and any claim arising from the defect will be bound by the state’s normal statute of limitations.

Defects that would not turn up during a reasonable inspection, on the other hand, are latent. In many jurisdictions, lawsuits involving latent construction defects are governed by the state’s “discovery rule,” a law that can extend the statute of limitations in select cases. Note, however, that discovery rules aren’t applied automatically. Your attorney will have to convince the court that a discovery rule should be applied.

Ambiguous Construction Issues

It’s also worth mentioning that some construction problems seem to fall into a gray area.

Let’s say you’re walking a home and discover water damage on the wall, dark stains that would be obvious to just about anyone. That sounds like a patent defect, but take an additional assumption on board. The water damage is being caused by a broken pipe, but you haven’t discovered the pipe yet. All you know about is the water damage; you haven’t figured out the cause. Moreover, you would have to go behind the wall to find the real problem, an extra step that we wouldn’t expect of an average consumer performing a reasonable inspection.

The defect, in this example, isn’t the water damage. It’s the broken pipe, and since that part of the equation is still hidden, the statute of limitations should be paused until you discover the actual issue.

You Might Have To Ask Your Builder For Repairs

Before we discuss statutes of limitation in detail, note that many states have placed an additional barrier in the way of filing a construction defect lawsuit, which can have ramifications down the line.

In fact, many jurisdictions have specific laws meant to protect home builders, developers and contractors from litigation. In these places, homeowners are required to notify their developer or contractor of a defect before filing suit. This gives the allegedly responsible party an opportunity to fix the problem without having to go to court. It also tips them off that a lawsuit may be on the way, which could make them more likely to repair the issue in a satisfactory way.

If the warning doesn’t work, and the responsible party refuses or fails to fix the problem, homeowners then are allowed to file their construction defect lawsuit in pursuit of compensation.

The Discovery Rule In Construction Lawsuits

Many personal injuries are immediate. Julia gets hit by a car and ends up with a broken arm. She knows immediately what caused her broken arm: at bottom, the actions of a driver. With this knowledge in hand, Julia has both the right and the ability to file a lawsuit against the party responsible for her injuries. As we’ve seen, construction defect lawsuits are very different.

Just as in Julia’s case, someone – an architect, contractor or developer – is responsible for the home’s failings. The home’s owners, however, might not discover the design or construction mistakes until years after they move in. To handle this complication, most states have introduced discovery rules to govern complex cases of construction defects.

When A Construction Defect Is Latent

“Discovery rules” act sort of like a cushion for the statute of limitations. What happens, for instance, when a home’s defective construction only becomes apparent after you’ve lived there for years? Unsurprisingly, this is actually how most construction defect cases work in the real world. Homeowners don’t usually know about construction problems on their move-in day. Often, a decade will pass before associated issues make clear that something went wrong during construction.

Take water damage as one example. Water damage isn’t instantaneous. It takes a while for moisture to do real damage inside a home. In fact, some homeowners never become aware of the issue, because it’s usually hidden behind the walls, in the form of black mold growth and weakened structural beams. This delay, however, doesn’t suggest that water damage is something to shrug off. Widespread moisture infiltration is a big deal, one that can ruin a home’s value and severely injure residents. It’s also, in many cases, the result of mistakes (or intentional acts) that were made years before, during the home’s initial construction.

When Does The Statute Start To Run?

Statutes of limitation usually begin to run on the date when a construction project reaches “substantial completion,” not when the negligence or wrongdoing actually took place. In a construction case, this could mean the day when a municipality issues its Certificate of Occupancy for a particular structure. The discovery rule steps in to allow homeowners extra time, pausing the statute of limitations until the owners discover that their problems with the house may be due to a construction defect.

Once the homeowners have discovered the link between a potential construction mistake and the problems they have, the statute of limitations begins to run as normal, lasting for however long it lasts. This generosity isn’t infinite. Most states have established a corollary rule – the “statute of repose” – which serves as a hard limit; after the statute of repose has run out, there’s absolutely no hope of filing suit, regardless of what the discovery rule says.

Pennsylvania Statute Of Limitations

Many, if not most, construction defect lawsuits filed in Pennsylvania will found their damages claims on an implied warranty. Every new home sold within the State comes with two basic guarantees:

  • warranty of habitability – the house is fit to live in; the foundation is strong, the roof serves as a sound protection against the elements, etc.
  • warranty of reasonable workmanship – the

These warranties need not be outlined in a contract; if they were, we would call them “express” warranties. Notwithstanding this fact, Pennsylvania’s courts recognize the existence of implied warranties because it’s good for consumers. Without the implicit understanding that their new home will be fit for habitation, it’s unlikely that anyone would buy a house in the first place.

Implied Warranties & Contract Law

Implied warranties fall under the rubric of contract law, as do claims arising from the breach of an implied warranty. As a result, any construction defect lawsuit premised on the violation of an implied warranty will have as its first consideration the statute of limitations for contract-related disputes. That law, codified at §5525 of the Pennsylvania Statutes Title 42, provides up to four years for any legal action filed over the violation of a contract, either express or implied. This time limit begins to run when construction is “substantially completed” (when this date actually comes, though, is a matter of dispute in many cases).

Latent construction defects complicate this picture. In some cases, a discovery rule can be applied to “toll” (pause) the statute of limitations, allowing homeowners extra time. There is, of course, an ultimate restriction on pursuing these claims. In Pennsylvania, construction defect lawsuits must be filed within 12 years after the completion of the structure’s construction, pursuant to 42 Pa.C.S. §5536. This “statute of repose,” which acts as the ultimate restriction on pursuing claims, applies to damages sought for:

  • any deficiency in the design, planning, supervision or observation of construction or construction of an improvement (like a renovation or addition)
  • injury to property arising out of a deficiency in the design, planning, supervision or observation of construction
  • personal injury or wrongful death arising out of any such deficiency

Pennsylvania law outlines one general exception to the State’s normal 12-year statute of repose on construction issues, which involves personal injuries or deaths, and may be able to extend the statute of limitations for another two years.

New York’s Construction Statute

As in Pennsylvania, most construction defect lawsuits filed in New York will be governed by the State’s rules for contract disputes. Claims against architects, on the other hand, which usually found their allegations in a theory of professional malpractice, derive their authority from the principles of negligence. Thus the relevant statute of limitations will usually depend on who is being sued, either an architect or a contractor:

  • architect – three year statute of limitations
  • contractor – six year statute of limitations

In most cases, the statute of limitations will begin to run when the construction project is deemed to have reached “substantial completion” – often the date on which a municipality issues its Certificate of Occupancy. As a general matter, New York’s courts do not recognize a discovery rule for latent defects, so homeowners would do best to pursue their claims immediately. In any event, contacting an experienced construction attorney as soon as humanly possible is essential.

New Jersey Limits For Construction Lawsuits

Compared to Pennsylvania and New York, New Jersey’s law on construction defects is fairly lenient. In most cases, the State’s statute of limitations will allow homeowners a basic time period of up to six years to file suit. Additionally, a discovery rule may apply in the case of latent defects that could not have reasonably been discovered at an earlier date.

The statute of repose for construction defect claims is ten years, beginning from the “substantial completion” of the defendant’s work on the project. Once this ten-year period has run out, a lawsuit will be dismissed out-of-hand, no matter how legitimate its claims.

California’s Construction Statute Of Limitations

In 2003, California’s law on construction defect litigation became a lot more complicated. That year, the State’s legislature enacted Senate Bill 800 (SB800), putting a series of sweeping changes into motion. Note that SB800 applies only to the new construction of homes intended to be sold as individual units.

To begin with, SB800 outlines a broad array of standards to govern residential construction, from irrigation systems to stucco siding. Then, the law provides contractors and other homebuilders a “right to repair,” giving them an opportunity to investigate and fix problems before they are opened up to civil liability. Only after this “nonadversarial” procedure has failed to resolve the issue are homeowners allowed to pursue compensation in a civil suit.

10 Year Statute Of Repose

California’s statute of repose for construction defect claims is now ten years, beginning when the construction project reached “substantial completion.” As we mentioned before, the statute of repose represents an ultimate deadline; 10 years after a project’s substantial completion, homeowners will lose the right to file suit, no matter how serious the construction issue. The statute of repose, however, does not mean that every homeowner will have a total of 10 years to pursue legal action.

General Time Limits

Pre-existing California laws cannot be disregarded. Generally, the applicable statute of limitations will change depending on the legal theory at issue in the lawsuit.

The State’s general three-year statute of limitations for civil negligence claims, for example, will still apply to cases in which homeowners argue that their home was built in violation of professional standards. Breach of contract suits, on the other hand, must be filed within four years for written contracts and two years for oral contracts.

Despite California’s overarching statute of repose (10 years under SB800), these more restrictive time limits can’t be ignored. We strongly suggest that homeowners contact a local attorney experienced in construction defect litigation immediately to preserve their legal rights.

Specific Deadlines

Alongside individual statutes of limitations and the uniform 10-year statute of repose for construction defect lawsuits, SB800 established even more stringent time limits for specific claims. Thus, a wide range of code violations and construction failures come with their own statutes of limitations, nuances we’ve listed below:

  • 1 year – failure of irrigation and / or drainage systems
  • 1 year – violations of interunit noise transmission standards (attached structures)
  • 2 years – failure to properly install dryer ducts
  • 2 years – landscaping systems that fail to survive for at least one year
  • 2 years – decay of untreated wooden posts
  • 4 years – violations of plumbing, sewer and electrical standards
  • 4 years – “significant” displacement in exterior hardscape
    • movement of outdoor constructed elements (driveways, retaining walls, stairs, etc.)
  • 4 years – corrosion of untreated steel frames and building components
  • 5 years – paint or stain failures

Note: All but one of the time limits listed above begin to run at the close of escrow, rather than the project’s date of substantial completion. The 1-year statute for violations of interunit noise transmission standards begins on the date that a resident began to occupy the adjacent unit. 

No Discovery Rule In California

California’s SB800 eliminated the distinction between patent and latent defects. In short, the State’s courts will no longer apply the discovery rule to any claims involving construction problems. At least for the purposes of claims filed under SB800, it doesn’t matter when you discovered the problem; it’s all about the date of substantial completion (for cases bound by the statute of repose) or the close of escrow (for the specific deadlines we listed above).

Nevada’s Law On Construction Quality Lawsuits

Assembly Bill 125 (AB 125), a Nevada law passed in 2015, wiped out the State’s distinction between patent and latent construction defects, bringing all construction lawsuits under a single overarching statute of repose. Also gone are narrow statutes of limitations for claims in which a contractor was aware of the defect beforehand and those in which a homeowner suffered physical injury due to the construction problem.

Six Year Statute Of Repose

Today, the statute of repose for construction defect claims in Nevada is six years from the date of the project’s “substantial completion.” The statute of repose is an ultimate deadline; no lawsuits, no matter how justified, are allowed more than six years after the date of substantial completion.

One Year Tolling Period During Mediation

Nevada’s construction litigation environment, however, is a little more complex. Under Chapter 40 of Nevada’s Revised Statutes, homeowners are required to enter mediation before filing a civil lawsuit over construction defects.

In the past, starting mediation proceedings would “toll,” or pause, the State’s statute of limitations, providing homeowners and developers with an ample amount of time to work out their dispute before the courts get involved. In part, this is still the scheme governing pre-litigation proceedings in Nevada, but AB 125 significantly shortened the tolling period.

Today, the statute of limitations will only be paused for one year while mediation is underway. As a result, both homeowners and homebuilders have a strong incentive to pursue mediation seriously or, alternatively, quickly decide that mediation will be unsuccessful.

Florida’s Construction Laws

Florida law provides most homeowners four years to file a construction defect lawsuit, although this time limit can be extended in certain cases. The State’s statute of repose, though, serves as a hard deadline. Wait more than 10 years and you will lose your right to file suit forever. Generally, the statute of limitations and statute of repose begin to run from the date of possession of the property by the owner, the issuance of a certificate of occupancy, the date that a construction project is abandoned or the date of the completion of a relevant contract, whichever one of these dates comes later.

Like California, Nevada has enacted a “right to repair” law to cut down on the number of construction defect lawsuits. Before filing a legal action, homeowners are required to send their developer, contractor or other liable party a “notice of claim,” describing the problem and giving the responsible party an opportunity to perform reasonable repairs. Normally, the notice of claim must be sent at least 60 days before a lawsuit can be filed in court. Only after these requirements are fulfilled can homeowners take legal action.

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