Imagine that you’ve just purchased a new suburban home outside of Providence, Rhode Island from a builder or developer. The developer no doubt made various representations about the house that it would build for you. You paid a negotiated price, and in exchange, expected, for example, a three-story townhouse with a hot tub, a deck, and a state-of-the-art kitchen. Plenty of promises were be made to you before you wrote that first check.
Now imagine that you show up at the site of the home to find a two-story house with no hot tub, a deck that isn’t level, and a kitchen that includes only one of the new appliances that you were promised, the rest being cheap knockoffs.
Clearly, you have not gotten the home that you bargained for. Your Rhode Island builder not only made material misrepresentations – about the state of the kitchen and the height of the home, for example – but also performed shoddy construction on the deck.
Fortunately, Rhode Island law will allow you to sue the builder in order to recover the lost value of your home.
Unlike many states, Rhode Island 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 for several reasons.
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 remedy 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 -- assuming the potential recovery is greater than the likely cost of legal fees -- it’s time to file suit.
When you arranged to buy your new Providence 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 floors would look like and be made of and whether there'd be wall-to-wall carpeting, whether there would be a garage, and what light fixtures, major appliances, and other finishing features would be installed. You probably signed a contract, outlining your payment and the builder’s promise to construct the home according to certain specifications.
Now you’ve discovered that those specifications have not been met. 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, emails describing the work, and lists of materials, brands, and appliances 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 basement, but the home as built contains a crawl space you can't even stand up in, this demonstrates the builder’s breach.
Don't let the years go by without taking action: Rhode Island has a ten-year statute of limitations for breach of contract claims under state law, R.I. Gen. Laws § 9-1-13(a). This means that homeowner claims based on a contract with the builder must be brought within this period, or they are barred.
Imagine that the builder installed the electrical system in a shoddy manner. Months later, after you move in, an electrical fire destroys part of the home and many of your possessions. This could give rise to a claim for negligence against your builder.
Negligence offers an alternative legal theory upon which to sue a Rhode Island 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.
To establish a claim for negligence in Rhode Island, a party must establish that 1) state law imposed a duty on the defendant builder; 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) you sustained actual economic damages due to the injury to your home.
Rhode Island 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. As for breach of contract, Rhode Island’s statute of limitations for property damage caused by basic negligence under R.I. Gen. Laws § 9-1-13(a) is ten years.
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. Rhode Island has a Statute of Repose, however, which creates an absolute bar of ten years from the date of construction for any claims against your builder. This cannot be extended, not even by a sympathetic judge who believes your side of the story.
Under R.I. Gen. Laws § 9-1-29, homeowners have six years in which to file suit after substantial completion of the construction project. A homeowner who waits until the builder has been “off the job” for 11 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 crack in the wall could be a sign of something larger lurking beneath or within. The ten-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 Rhode Island 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 related experience; perhaps in 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 suing in court. In arbitration, either one or three individuals – again, typically with some experience in construction matters – 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 in most cases 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 Rhode Island will be able to carefully review the document for these sorts of limitations and tell you whether they can be enforced against you.