Imagine that you’ve moved to a big new home outside of Oklahoma City, constructed by a builder or developer. From the outside, the house looks perfect, exactly as had been promised in the various planning documents and prospectus papers.
But after a couple months of living there, you begin to notice significant problems. The floorboards are warped, the pipes clog easily, and the bedroom windows are cracked. Not only are these defects troubling; they also lower the value of your home, should you ever wish to resell. You did not get the benefit of your bargain.
How can you recover for these major structural problems in a newly constructed home in Oklahoma?
Some states require that a homeowner make a formal demand on a developer regarding any construction defects before litigating (taking the matter to court). Oklahoma has no such requirement; you can sue immediately. Nevertheless, sending a letter to your developer first is a smart idea.
If you haven't already, alert the developer to the problems and suggest an in-person inspection to review the defects. The next step -- even if you've already spoken personally -- is to send a formal demand letter asking for reimbursement or remediation work.
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. Remember, the developer likely wants to sell other homes to other people. The last thing it wants is bad publicity and noisy litigation alleging that it builds shoddy houses.
If you moved into a newly constructed home in Oklahoma, your builder or developer likely gave you extensive materials describing how the place would eventually look, and what it would feature. You would have needed to sign a contract outlining your payment and the builder’s promise to construct the home. The developer might have also given you prospectus documents, showing renderings of the home.
Part of any possible lawsuit against the builder will be that it breached this agreement – did not give you the structure that was promised. Here, all of the written materials the builder gave you, including photos, effusive descriptions of the home, lists of light fixtures, countertop materials, brand names, and other finishing features, and emails 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 pool, but the home as built includes a tiny wading pond, this demonstrates the builder’s breach. Regardless of the existence of a written contract, builders owe homeowners an implied warranty over the quality of their work. Oklahoma judges recognize that a new homeowner has a claim for an implied warranty of quality and fitness against a contractor who fails to live up to a basic standard of care.
Keep in mind, though, that the statute of limitations for breach of contract in Oklahoma under Okla. Stat. § 12-95(A)(1) is five years. This puts a deadline on when you can sue.
Suing for breach of contract isn’t the only way to recover from an Oklahoma builder. You could also sue on the theory of negligence.
In this context, that would mean proving the builder’s failure to exercise the correct standard of care. In order to successfully establish a claim for negligence in Oklahoma, you'd need to show that 1) a duty was imposed on the builder by law; 2) the builder failed to conform to the correct standard; 3) there was a causal link between the builder's failure to meet the standard of care and the resulting construction defect; 4) and you sustained actual economic damages from the injury to your Oklahoma home.
An example might be a builder who left electrical wires exposed in the kitchen, allowing contact with water, such that a resulting power surge destroyed your appliances.
Note that Oklahoma has a (very brief) two-year statute of limitations for property damage caused by negligence, under Okla. Stat. § 12-95(A)(3).
Homeowners seeking to sue their builders need to be mindful of Oklahoma’s Statute of Repose – a law intended to give legal certainty to builders after a certain period of time. Under 12 Okl. St. § 109, a homeowner has only ten years in which to sue his developer over the construction of the home.
Unlike statutes of limitations, this ten-year period cannot be extended because of a latent construction defect (one you couldn't readily see) or late discovery of the defect.
Before you run to court, you should carefully reread your contract with your builder or developer (or any prospectus documents that the developer provided). Dispute resolution clauses are common in construction contracts, in Oklahoma as elsewhere.
These clauses typically state that, before proceeding to court, you must go to mediation or, in the alternative, binding arbitration. Mediation is a negotiation between you and your builder that is facilitated by a third-party neutral person, known as a mediator. The mediator’s job is to help you reach a settlement without the need for litigation.
In mediation, you could craft a creative deal with the builder – for example, a combination of the builder's doing further repairs on your home and some sort of cash payment. If mediation fails, you are ordinarily still permitted to sue in court.
Arbitration is very different. If your contract has a mandatory arbitration clause, arbitration would be in lieu of court. In arbitration, either one or three individuals – typically lawyers with experience in construction – will render a final determination on your dispute. The advantage of arbitration is that it is generally faster than litigation, saving you money on legal fees. A potential disadvantage, however, is that an arbitrator’s decision is typically non-appealable.
Lastly, be sure to look through your contract for any shortened claims periods. It is not uncommon for construction contracts to shorten the amount of time that a homeowner has in which to file a legal claim against the builder.
An attorney with experience in construction defect litigation in Oklahoma will be able to carefully review your documents for these sorts of limitations and advise you as to the merits of your claim and best way to proceed.