Delaware’s home construction industry is booming. If you are like many homeowners who purchased your home from a developer, you expect your house to be built exactly as it was promised to you. But what if you move into a home that turns out to have defects? Maybe they're little issues, like the occasional cracked windowpane. Or maybe you've encountered bigger issues, like warped floorboards and weak water pressure.
Big or small, these sorts of defects lower the value of your brand new home. How does Delaware law help you recover against the builder or developer for such defects?
If you sue your builder for construction defects, breach of contract will almost certainly be your primary legal theory. When you moved into a newly constructed Delaware 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, and whether there would be a garage or swimming pool. 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 to you 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 skylight, but the home as built contains no skylight, this demonstrates the builder’s breach.
Delaware has a three-year statute of limitations for breach of contract claims under state law, Del. C. § 8106. 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 period – for example, if the roof caves in after four years because the builder used low-quality wood and the homeowner couldn’t have reasonably known.
Another possible basis upon which to sue a Delaware builder is negligence. Ordinary negligence in the context of construction defects is said to be the builder’s failure to exercise the correct standard of care.
In Delaware, 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.
Delaware 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. Note that Delaware has a two-year statute of limitations for property damage caused by basic negligence under Del C. § 8107.
As a plaintiff, you need to be very careful of Delaware’s Statute of Repose for improvements to real property, Del. C. § 8127.
Under this state law, homeowners have six years in which to file suit after substantial completion of the construction project. If the homeowner waits until the builder has been “off the job” for six years, he or she is probably barred from filing suit for the alleged construction defect, regardless of when the defect was discovered.
This is different from the law in many other states, where the limitation period is tolled (delayed) based on when the homeowner discovers the existence of the defect. This statute is meant to give certainty to builders, so that they need not worry about potential claims after six years have gone by.
However, it means homeowners must be vigilant to ensure 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 six-year window of the statute of repose begins to run regardless of whether the homeowner could have known about the defect in construction.
Before filing your lawsuit, check your contract to see whether other steps must be taken first. Many construction contracts, in Delaware 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 Delaware will be able to carefully review the document for these sorts of limitations and tell you whether they can be enforced against you.