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Know The Law: Construction Defects in Custom Built Home

Written by: Jeremy T. Walker

Published in the Union Leader:

Q.My wife and I had a custom home built for us 5 years ago.  Last year, significant structural problems came to light, and it will cost us a fortune to make the necessary repairs. The builder will not return our calls. Is it too late to seek recourse from the builder?

A.Unfortunately, this scenario is not uncommon as significant defects with new construction often do not manifest themselves immediately. If the problems arise out of faulty construction or design, it may not be too late to seek recourse from the builder or design professional.

New Hampshire law provides a 3-year statute of limitations that applies to claims arising out of construction defects. But like most states, New Hampshire’s statute of limitations is subject to what is commonly referred to as the “discovery rule.” In the construction context, this means that the 3-year limited period for bringing a lawsuit does not start running until the time a party discovers its damages and the fact that the damages were likely caused by defective construction or design. This premise is based on the obvious unfairness of precluding homeowners from bringing a lawsuit before they discover the defective construction.

However, the so-called discovery rule potentially could lead to unlimited exposure to builders. Accordingly, New Hampshire law also includes an 8-year “statute of repose,” which requires that any claims against builders be brought within eight years of substantial completion of the construction project, regardless of when the alleged construction defect is discovered. The New Hampshire Legislature enacted this statute of repose on the basis that it was in the public interest to prevent builders and others in the construction trade from facing liability for an unlimited duration after completion of a project. There are exceptions to even the 8-year limitation when a builder fraudulently conceals a defect.

In sum, the liability of builders and contractors is limited to claims brought within three years of the discovery of defective construction, and regardless of when discovered, within eight years of the date of substantial completion of the construction project. If you discover construction defects within your home, you should immediately contact the builder. Fortunately, most good builders in New Hampshire are responsive and will properly address an owner’s concerns. But if the builder does not, you should consult with your attorney promptly to understand your options.


Jeremy Walker can be reached at [email protected].

Know the Law is a bi-weekly column sponsored by The McLane Law Firm.
We invite your questions of business law. Questions and ideas for future columns should be addressed to: Know the Law, The McLane Law Firm, P.O. Box 888, Manchester, NH 03101 or emailed to [email protected]Know the Law provides general legal information, not legal advice. We recommend that you consult a lawyer for guidance specific to your particular situation.

 

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