New Home Construction Defects in Wisconsin: Your Rights Against the Builder

Wisconsin law gives the owner of a new home very specific rights to claim compensation from or sue a builder over home defects.

As exciting as purchasing a newly constructed home can be, it’s not uncommon to find, after the sale closes and you move in, that a few things about the house were not completed as drawn up and agreed upon, or that the construction was faulty or things simply don’t work as they should. If any of these variations or issues rise to the level of being defects, you may decide to pursue legal action against the home builder.

Notifying the Builder After Finding a Defect in Your Newly Built Wisconsin Home

Before even considering any court action, you must, under Wisconsin law, notify the builder in writing of the defect. This notice must include a description or explanation of the problem, which should be detailed enough to explain the nature of the flaw.

You must also set forth any evidence supporting your contention that the issue is the result of a construction defect or error. If you have an issue with water intrusion in the home, for example, you should provide photos of the water damage along with any reports or estimate you may have obtained from a repair company, plumber, and/or your insurer. There is no specific requirement as to what type of evidence must be provided, but the more proof you can provide, the more likely it is that the builder will attempt to settle this matter.

After presenting your position and evidence, you must give the builder an opportunity to fix or otherwise correct the alleged defect upon receipt of your notice letter.

One advantage to this procedure is that it offers a possible way to get the builder to repair something minor without your having to spend the time and money involved in filing a lawsuit. With any luck, the builder will make the requested repairs at this point.

While you can send the notice letter on your own, any defect in your letter could prevent your lawsuit from moving forward. This in turn will force you to send out a corrected version of the letter. If you are fairly sure the notice letter will not lead to a settlement without further action, you may want to get an attorney involved to draft and send the letter on your behalf.

The Builder’s Obligations to Respond to Your Written Notification

After receiving the written notice alleging a defect, a builder in Wisconsin must respond to you in writing. The builder has 15 business days in which to respond, but if the notice causes the builder to make a claimagainst a party who supplied the builder with materials for the construction project, then the builder has 25 business days in which to respond.

The builder’s response letter must include one of the following:

  • an offer to fix or otherwise correct the defect at no cost to you
  • an offer to settle by paying you an amount of money as suggested by the builder
  • an offer that is a combination of repair and paying you money
  • a rejection of the claim, which includes the reason for rejection and any evidence supporting the builder’s reason to reject, or
  • a request for an inspection of the property.

A builder who requests an inspection must send you a written response that includes one of the other options detailed above within ten business days after completion of the inspection.

Dealing With a Settlement Offer From the Builder

If you receive a settlement offer from the builder and do not agree to what is being offered, you can reject the offer in writing within 15 business days. You must include the reasons for rejecting the offer.

The builder then has the option to submit a revised offer within five business days. This gives you another 15 business days to either accept or provide another written rejection. The builder can continue to make revised offers until either a settlement is reached or the builder decides to stop making any more offers.

Potential Legal Claims

If you don’t agree with the builder’s rejection of your claim, or you and the builder can’t reach a settlement, you may have several different legal avenues to pursue.

First, you may be able to assert that the builder is in breach of contract by having failed to abide by the specific requirements of the construction agreement. You may also be able to claim that the builder violated a warranty associated with the construction. This can take the form of either noncompliance with the terms of a written warranty issued by the builder, or by a violation of a more general (implied) warranty that the completed property would be able to be occupied. Finally, you could claim that the builder was negligent in the construction of the home.

Wisconsin law provides you with further protection in the event that the defect was the result of the builder’s failure to finish the construction project. Any funds paid to the builder are considered to be held in trust pending payouts for the actual costs of the project. Any other use of these funds is considered theft by contract, and both civil and criminal penalties could result.

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