You've just moved into a brand-new home in Ohio, constructed by a builder or developer. From the outside, the house looks wonderful, exactly as had been promised. But after a couple weeks of living there, you begin to notice serious issues. Perhaps the issues are aesthetic – the tiles on the bathroom floor don’t quite line up, or the windows have a strange dark tint. Or perhaps the issues are more structural – the stairs feel unsecure, or the doors don’t fit into the frames. Surely, after the price you paid for the home, you can assume that it would be perfect, or at least reasonably close to perfect! Construction defects lower the value of a home. How can you recover against the builder or developer for such defects?
Ohio has enacted “right to cure” legislation, which gives the builder the opportunity to remedy any defects in construction before facing legal action. This means that you, as homeowner, must notify the builder of any claims or problems before you actually file litigation or arbitration.
Under O.R.C. § 1312.01 et seq., an owner must give 60 days' notice, usually by way of attorney letter, and the builder has 21 days in which to respond. In the response, the builder will usually negotiate and offer a way of fixing whatever the problem is. If the builder ultimately fails to remedy the issue, any statute of limitations is “tolled” – which means that you don’t need to worry about your claims being precluded in court because you waited too long. The purpose of this statute is to encourage settlement between the parties, and to give builders an incentive to correct their own errors before needing to hire attorneys and begin the arduous process of litigation.
Having moved into a newly constructed home, your builder or developer surely gave you extensive materials describing it. You would have needed to sign a contract, outlining your payment and the builder's promise to construct the home.
Part of your lawsuit against the builder will be that it breached this agreement – did not give you the building that it promised it would. Here, all of the materials the builder gave you, including photos, descriptions of the home, emails and other correspondence describing the work, will be useful to establishing your 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 two-car garage but the garage as built fits only one car, this demonstrates the builder’s breach. Note that under Oh. Rev. Code § 2305.06, you have eight years to file a breach of contract action based upon your written contract. (If the contract is unwritten, for whatever reason, you only have six years).
If there are architectural design defects in the design of the home – for example, a foundation that's unstable as designed – you may have claims for professional negligence against the architect. In many home development/builder contexts, you may have personally met or had communications with the architect; in other contexts, these communications may have only been through the contractors or development company.
A claim of professional negligence, if supported by the evidence, would give you access to another defendant (and source of damage payments). Strategically, it is also likely that your architect has professional liability insurance for just this sort of occurrence. Under Oh. Rev. Code Ann. § 2305.09, you would have four years to bring this type of action.
There are a few clauses to watch out for in your contract with your builder or developer before filing your lawsuit. First, it is common in construction contracts to find a dispute resolution clause. That clause may provide that you were required to go to mediation with your builder for developer before filing your lawsuit. In this context, mediation is a facilitated negotiation for settlement, led by a third-party neutral individual. Often, that individual will have some 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 render a final determination on your dispute. The advantage of arbitration is that it is generally quicker than litigation, saving you money on legal fees. A potential disadvantage, however, is that an arbitrator's decisions cannot ordinarily be appealed.
Finally, take note of any aspects of the contract that shorten your statute of limitations or ability to make claims. It is not uncommon that construction contracts will shorten the amount of time that the law gives you in which to file a legal claim against your builder. An attorney will be able to carefully review the document for these sorts of limitations.