In spite of the challenges many business sectors are facing in a difficult economy, construction contracts have skyrocketed as homeowners are choosing to remodel their homes in 2020. According to a recent CNBC report, project leads were up 58% in June. And three-quarters of American homeowners have planned to do a home improvement project in the next 12 months, many of them using their home equity to pay for it.
While the uptick in business is a boon to the construction industry, contractors need to be wary of liability issues and what laws are in place to protect them from false construction defect claims. As clients build or remodel their homes, construction owners and their partners, as well as contractors and subs, can be targeted by a dissatisfied client.
Construction defect claims
Construction defects can involve minor problems like peeling paint and loose hinges, to major issues like a cracking foundation, code violations and claims of substandard workmanship or faulty design. Cases usually hinge on proving one of several claims: negligence, breach of contract, breach of warranty, and fraud.
Most states have statutes of limitations that provide a time limit on the filing of defect claims. A statute of repose limits the time period in which a lawsuit can be filed, while a statute of limitations caps the time in which a cause of action can begin after discovery of the defect.
The Texas Residential Construction Liability Act (RCLA)
Builders in Texas are protected from many liability claims by Chapter 27 of the Texas Property Code, also known as the RCLA. The RCLA Statute of Limitations is four years for contracts and two years for torts, while the Statute of Repose is ten years after substantial completion, which includes an additional two years if injuries were suffered in the tenth year.
The buyer’s right to cure for residential construction defects is at least 60 days before filing a claim. They also must allow an inspection and an offer to remedy before a cause of action can start.
Legal issues are costly and can slow down the daily operations of your business. An attorney knowledgeable in construction law can help protect your business and pursue your interests so that your business doesn’t suffer.