Imagine that you’ve just moved into a newly-built home in picturesque Vermont. The developer likely enticed you with all sorts of pictures and promises – a perfect home against an idyllic New England backdrop. The developer surely quoted you the price, and then described all facets of the home – its size, its location, its quality, and its amenities.
Not all new construction is perfect, however. For a variety of reasons, you may be dissatisfied with the home after you move in. Perhaps the central air-conditioning is defective; perhaps the floorboards in the kitchen are not level; or perhaps the contract documents made a material misrepresentation, promising you a walk-in closet when no such closet was built.
These sorts of defects lower the value of your Vermont home, not to mention make you feel like you didn't get what you paid for. How can you use your state’s laws to recover against your developer?
Suing a developer might not be easy. Many builders are parts of statewide or nationwide corporations with teams of attorneys to defend themselves from claims. You are one home buyer, probably of dozens or even hundreds. You cannot be expected to win this fight on your own.
If you believe that there are significant defects in your newly built Vermont home, you should consult a local attorney – preferably one with experience in Vermont real estate or construction – about your situation.
Suing a developer is different from filing a small lawsuit against a home contractor, for example, which can often behandled without an attorney in Vermont’s small claims courts. This type of action is ideal for a small dispute with a painter, for example, who fails to complete a specific task. A lawsuit against a developer is a larger project, one that generally requires an attorney’s assistance.
Ultimately, your lawsuit against your developer is about its breach of a promise: to deliver you a home as it was described it to you. Buying a newly constructed house is a process that generates lots of paperwork, particularly if the house is within a new planned community. Your builder or developer surely gave you extensive materials describing your new property. You would have needed to sign a contract outlining your payment and the builder’s promise to construct the home.
If you have to file a lawsuit against the builder, part of your claim will be that it breached this agreement – did not give you what it promised it would. Here, all of the materials the builder gave you, including photos, descriptions of the home and landscaping, plans and drawings, 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 tile floors, and the floors are some cheap substitute, this demonstrates the builder’s breach.
Vermont has a six-year statute of limitations for breach of contract, however, under 12 Vt. Stat. § 511. This means that claims based on a contract with the builder must be brought within this period, or they are barred.
However, discovery of the defect can toll (delay) the limitation period in some situations. When a homeowner could not have reasonably discovered the existence of the breach until after the three-year period – for example, if the lights go out after four years because the builder used low-quality wiring and the homeowner couldn’t have reasonably known about it (especially likely, with wires being hidden behind walls) – a court might allow the action to proceed.
Breach of contract isn’t the only basis upon which you might sue your home builder. Another useful legal theory is that of ordinary negligence. In this context, the relevant negligence would be the builder’s failure to exercise the correct standard of care in building your Vermont home.
To establish a claim for negligence in Vermont, the person filing suit must establish that 1) a particular duty was imposed on the builder or developer by law; 2) the builder failed to conform to that legally imposed standard; 3) there was a causal link between the failure to meet the standard of care and the resulting construction defect; and 4) you suffered actual economic damages as a result of the injury to your Vermont home.
Note that Vermont has a three-year statute of limitations (a deadline on when you can file suit) for property damage caused by negligence under 12 Vt. Stat. § 512(5).
Good news if the problem doesn't turn up for several years: Unlike in many states, there is no statute of repose in Vermont (putting an absolute bar on when you can file a lawsuit). This means that the only time limitations on lawsuits against your builder come from the statutes of limitations. With only six years on the two most common causes of action, you should act diligently in consulting a lawyer and filing a suit.
You and your attorney should carefully read the language of your sales contract. There are a few clauses to watch out for before filing your lawsuit. First, it is common in construction contracts in Vermont and elsewhere to find a dispute resolution clause.
A dispute resolution clause may say that you were required to go to mediation with your builder or 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 relevant experience, most likely with construction law, engineering, or building development.
Your contract may also contain 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 typically quicker than litigation, saving you money on legal fees. A potential disadvantage, however, is that the arbitrator's decisions generally cannot 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 you have in which to file a legal claim against your builder.
An attorney with experience in construction defect litigation in Vermont will be able to carefully review the document for these sorts of limitations and help strategize how to best seek compensation from your builder or developer.