New-Home Construction Defects in Arkansas: Buyer's Rights Against the Builder

Dissatisfied with your newly built Arkansas home? Learn about your legal remedies.

If you buy a new home from an Arkansas developer, you are buying a promise – the developer’s representations about what the home will be like. Sometimes those representations will be oral, sometimes they will be written in contract documents, and sometimes they will be visual, for example through pictorial renderings of the home.

Based on all of these representations, you agree to buy the home, often long before construction has begun (or based on seeing only a model version of the home).

What happens if you move into the completed house and realize that there are defects? The floors are creaky, the gas doesn’t work, and the swimming pool’s heating unit is broken. These sorts of defects lower the value of your new home. Let's look at how Arkansas law can help you to recover against the builder or developer.

Send a Formal Demand Letter

Unlike many states, Arkansas law does not require that you give your developer the chance to correct any construction defects before you file a lawsuit in court. Nevertheless, sending this sort of “warning letter” is generally a good idea.

A demand letter will explain the problems – with pictures and descriptions of the defects and references to the contract – and ask that the developer either remediate the work or reimburse you for the cost of hiring another contractor to fix it. The developer, wanting to avoid litigation, may do the right thing and send inspectors or contractors to correct the issues.

If the developer ignores the letter or fails to properly address the situation, you’ll know that it’s time to file suit.

Claims Against an Arkansas Builder for Breach of Contract

At its core, your beef with your builder is about broken promises. The builder promised you a certain type of house for a certain price, and delivered less than what you paid for. In legal terms, this is known as a breach of contract.

When you moved into a newly constructed Arkansas home, the builder or developer likely gave you a stack of written materials describing the home. The materials told you how big it would be, what the walls would look like, what the finishings would be, and whether there would be a garage, swimming pool, or other special amenities. You probably signed a contract, outlining your payment and its promise to construct the home according to certain specifications.

By definition, if your builder delivered a house that is different from (and worse than) what was promised in those contractual documents, it breached this agreement – it failed to construct the house as agreed upon. Here, all of the materials the builder gave you, including photos, plans and descriptions of the home, and emails describing the work, will be useful in demonstrating your rightful expectations at the time you entered into the contract.

For example, if the various documents clearly show that you thought you were getting a home with a deck, but the home as built contains no deck, this demonstrates the builder’s breach.

Arkansas has a five-year statute of limitations for breach of contract claims under state law, A.C. § 16-56-111. This means that homeowner claims based on a contract with the builder must be brought within this period, or they are barred.

An exception to this would be when a homeowner could not have reasonably discovered the existence of the breach until after the relevant period – for example, if dry rot sets in after six years because the builder forgot to install flashing on the gutters and the homeowner couldn’t have reasonably known.

Claims of Negligence Against an Arkansas Builder

Breach of contract isn’t the only legal theory you might employ against an Arkansas builder. The builder might have delivered the house as promised, but with negligent construction mistakes that resulted in damage to the property. Negligence in the context of construction defects is said to be the builder’s failure to exercise the correct standard of care.

In Arkansas, in order to establish a claim for negligence, a party must establish that 1) a duty was imposed by law; 2) the builder failed to conform to that standard; 3) there was a causal link between the failure to meet the standard of care and the resulting construction defect; and 4) actual economic damages resulted from the injury to your home.

Arkansas courts hold that builders have an implied duty to perform services required by their contract with homeowners in a skillful, careful, diligent, and workmanlike manner, even without a written agreement. Remember that Arkansas has a three-year statute of limitations for property damage caused by basic negligence under A.S. §16-56-105.

Shortened Limitation Created By Arkansas’s Statute of Repose

Normally, statutes of limitations can be extended in certain cases – particularly if the homeowner could not have reasonably discovered a construction defect within the statutory period. Arkansas law includes a Statute of Repose, however, which creates an absolute bar of four years from the date of construction for any claims against your builder. This is a shorter time-frame than most other states.

Under A.S. § 16-56-112, homeowners have four years in which to file suit after substantial completion of the construction project. An Arkansas homeowner who waits until the builder has been “off the job” for four years is probably barred from filing suit for the alleged construction defect, regardless of when the defect was discovered.

Homeowners must be vigilant to ensure that they do not get blocked by the statute. If you see any signs of trouble with the construction of your new home, investigate further rather than waiting for it to fully manifest! A small leak or other problem could be a sign of something larger lurking beneath or within. The four-year window of the statute of repose begins to run regardless of whether the homeowner could have known about the defect in construction.

Mediation, Arbitration, and Shortened Claim Periods in Construction Contracts

Before filing your lawsuit, check your contract to see whether other steps must be taken first. Many construction contracts, in Arkansas and elsewhere, contain a dispute resolution clause. That clause may provide that the homeowner is required to go to mediation with the builder or developer before filing suit. Mediation, in this situation, means a facilitated negotiation for settlement, led by a third-party neutral individual. Often, that individual will have experience with construction law, engineering, or building development.

Your contract may also have an arbitration clause. This clause would require that you go to arbitration against the builder or developer instead of litigation in a court of law. In arbitration, either one or three individuals – again, typically with experience in construction – will issue a final determination on your dispute. The advantage of arbitration is that it is usually quicker than litigation, saving you money on legal fees. A potential disadvantage, however, is that the arbitrator's decisions are probably final, that is, not subject to appeal or further court proceedings.

Finally, take note of any aspects of the contract that shorten your statute of limitations or ability to make claims. It is not uncommon for construction contracts to shorten the amount of time that the homeowner has in which to file a legal claim against the builder. An attorney with experience in construction defect litigation in Arkansas will be able to carefully review the document for these sorts of limitations and tell you whether they can be enforced against you.

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