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

Many South Carolina homebuyers purchase from developers before the homes are actually constructed. These builders are in the business of selling homes to prospective buyers with promises about what the home will eventually look like: its size, its appearance, and amenities. All of these factors determine the price.

However, that succession of events comes with risks. Imagine that you contracted to purchase a two-story house with three bedrooms and a jacuzzi, but when you moved in, there were only two real bedrooms plus a bonus room with no closet, and no jacuzzi. Or perhaps the bedrooms were all smaller than promised. Or perhaps the heat throughout the home is faulty, costing you thousands of dollars in repairs.

Construction defects are not uncommon in new home construction. Whether the defect represents a major material misrepresentation by the builder (like a missing jacuzzi) or a fixable but important problem (like faulty electric work), construction defects lower the value of your home. How does South Carolina law help you recover against the builder or developer for such defects?

South Carolina Builder Has Automatic Right to Cure

Once you discover a construction defect, don't run off to court just immediately. In South Carolina, for residential construction, a builder has an automatic right to cure any defects that emerge before litigation can proceed. Basically, this means you need to tell the builder about the problem so the builder has a reasonable chance to fix it.

Under S.C. Code § 40-59-840(A), a homeowner must serve a written notice of claim on the builder at least 90 days before filing suit. Basically, this is a letter that details the defect and the problem(s) it's causing. You might include photographs, as well.

The builder then has 15 days in which to request any needed clarification, and 30 days from receiving the letter in which to inspect the problem and either deny the claim or offer either a monetary settlement or a remedy. You must allow the builder to inspect your home. You'll have 10 days in which to respond to an offer from the builder.

If the builder denies your claim or fails to respond within 30 days, then you can begin litigation.

Claims Against a South Carolina Builder for Breach of Contract

When you arranged for the construction of your South Carolina home, the builder or developer likely gave you a stack of written materials describing the place. You probably signed a contract outlining your payment and the builder's promise to construct the home according to certain specifications.

Part of your lawsuit against the builder will likely be that it breached this agreement; it failed to construct the house as agreed upon. Here, all of the materials the builder gave you, including photos, floor plans and descriptions of the home, and lists of materials, finishes, or appliances, will be useful in demonstrating your rightful expectations. If, for example, the various documents show that you thought you were getting a home with a two-sink master bathroom but the room contains only one sink, this demonstrates the builder's breach.

Don't delay: South Carolina has a three-year statute of limitations for breach of contract claims, under S.C. Code § 15-3-530. This means that 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 deck collapses after seven years because the builder used low-quality wood and the homeowner couldn't have reasonably known, a lawsuit that commences at that point should be accepted.

Claims of Negligence Against a South Carolina Builder

Another legal theory upon which to sue a South Carolina 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 order to establish a claim for negligence, a party must demonstrate that:

• a duty was imposed by law
• the builder failed to conform to that standard
• there was a causal link between the failure to meet the standard of care and the resulting construction defect, and
• you sustained actual economic damages due to the injury to your home.

South Carolina 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.

South Carolina has an eight-year statute of limitations for property damage caused by basic negligence, found in S.C. Code § 15-3-640. Thus a homeowner who waits until the builder has been "off the job" for nine years 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 eight or more years have gone by.

However, it means that homeowners must be vigilant about the condition of their home 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.

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 contain a dispute resolution clause. That clause might 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 might also have an arbitration clause. This 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 (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 ordinarily final, that is, not subject to appeal or further court proceedings.

Lastly, take note of any language within the contract that shortens your statute of limitations period or ability to make legal claims. It is not uncommon for construction contracts to shorten the amount of time that the homeowner has in which to file a claim against the builder.

An attorney with experience in construction defect litigation in South Carolina will be able to discuss with you whether these limitations can be enforced against you and help you further explore your likely remedies.