During the past three years, about half the U.S. states have
enacted so-called "construction-defect" or "right-to-cure"
statutes. These statutes, which apply almost exclusively to
residential construction (with Colorado and Tennessee being
exceptions), are intended to try to reduce the amount of
construction litigation by providing contractors with notice and a
right to correct alleged construction defects before homeowners or
condominium associations file suit.
The statutes apply only to claims for construction defects and
property damages and have no applicability to suits for personal
injury. Western states generally were the first to enact
construction-defect statutes; the trend has moved east as several
Midwestern, Southern and Northeastern states enacted similar
statutes recently. The insurance industry and contractor groups
have been the principal sponsors of this legislation.
The objectives and general requirements of most state
construction-defect statutes are quite similar though the specific
time periods for notices by homeowners and responses by contractors
and follow-up steps vary by state. The statutes are intended to
facilitate out-of-court settlements of construction disputes by
requiring homeowners and contractors to communicate with each other
before beginning litigation or arbitration. The statutes afford a
reasonable opportunity for contractors to be notified of a problem
and fix it or settle a...
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