New Home Builder Breach Of Contract
Home construction defects are problems or mistakes you find in the work done on your home, including issues with the workmanship, design, materials, engineering, and more. The typical construction defect case is based on contracts between:
- The homeowner and developer
- The homeowner and the contractor or subcontractors
- The contractor and their suppliers, architects, and engineers
- You and anyone involved in building your home
Negligence
The law requires developers/general contractors/subcontractors to use “reasonable care” in the construction process. You will need to show that the contractor did something that didn’t meet their profession’s standards. When a developer doesn’t have the proper degree or license to do their job correctly, but a company hires them anyway and puts them on a job, the company can be held negligent for damage the developer causes. The duty of care is extended to anyone who could be hurt by the construction defect. This includes future purchasers of the house or property.
Breach of Contract
Real estate owners can sue the builder/developer for not living up to the language in their contract. A breach of contract usually involves:
- Breaking an obligation in the construction contract
- Not following purchase or sale documentation
- Not following the escrow instructions
When such claims are made, courts often look to the “doctrine of substantial performance.” If the builder made an effort to complete the contract, but didn’t meet all requirements, the court will consider the contract complete and the homeowner is not usually under obligation to pay the full price.
Breach of Warranty
Breach of warranty is like the breach of contract theories. But instead of a contract not being followed, a breach of warranty means the warranty was not followed. The contract may have warranties about the condition of the property in case of defective products. If the property damage relates to a breach of an express warranty, the principles of the contract apply.
Courts say that builders and sellers of new construction are responsible for:
- What is implied in the contract or warranty
- Reasonably designing and constructing the structure
All builders and vendor have to work under the theory that a home was built to be:
- Sold to public buyers
- Used for a specific purpose (such as living in it or renting it out)
Privity of contract is not always required under this particular theory of liability.
Strict Liability Claims
The “implied warranty of habitability” puts strict liability, or responsibility, on the general contractor. In a strict liability case, the property owner does not have to prove the general contractor or developer was negligent in the construction of the new home.
However, it must be proven
- The contractor or developer was involved in the mass production of housing
- A defect in the house exists
- Damage or injury was caused by the defect
- The contractor or developer caused or created the defect
Fraud
Fraud means the developer intentionally misrepresented the quality of construction. This often involves false statements or false advertisements. An example is saying “scratch-proof flooring” when the floors scratch easily.
Negligent Misrepresentation
In negligent misrepresentation cases, homeowners need to prove:
- The developer asserted something to the homeowner
- The developer had no reason to believe the information was true
Have Your Construction Defect Claim Reviewed by an Attorney
If you believe a defect in your home is the result of someone’s carelessness, you may want to file a claim. A construction law attorney can help you get started.
Craig Cherney is a trusted client advisor and a sought after real estate lawyer and expert witness who is hired by the nation’s top Real Estate Litigation Attorneys to help resolve their litigated real property matters. Craig has appeared as a testifying expert witness before judges and juries in California, Arizona, Nevada and other jurisdictions across the country. Craig Cherney, Esq. Expert Witness Real Estate. 480-399-2342. If you are litigating an easement case, Craig Cherney might be able to help you advance and win your case.