Construction defect claims arise when a party purchases real property, such as a building, that contains inherit defects that undermine or invalidate the intended purpose for its use. If a construction defect arises, the buyer is permitted to pursue litigation against the general contractor, seller, and subcontractor responsible for the defect. A previous post discussed how a plaintiff might win a negligence suit. This post will discuss how a construction defect could give rise to a breach of contract claim.
Negligence allows any future homeowner to file suit against the original developer (if they are within the statute of limitations). Conversely, breach of contract claims only arise if there is “privity” between the parties. Privity means that the parties are somewhere linked by a contract, in some way. Thus, breach of contract is usually only possible between a buyer and seller of a contract. So, the fourth or fifth homeowner could not sue the original developer but the first buyer could.
If the defect arises when the first buyer occupies or owns the home, then the first buyer can sue the developer. Usually building contracts will require the developer to build the project within specifications, reasonably, or to use their best engineering skills. In these cases, the court will apply the “doctrine of substantial performance.”
The doctrine of substantial performance requires the builder to either correct the defect (if commercially feasible) or to pay the difference between the contract price and reduction in value to the homeowner.
There are many other ways that you can recover for a construction defect claim and follow-up posts will discuss those strategies. In general, if you believe your home was shoddily constructed, you should contact a lawyer for assistance; you may have a valid contract dispute. Construction defect claims are remarkably complex because you must hire experts to study the defect and present compelling arguments that the issue is due to the developer’s error, not to natural erosion or wear and tear.
