October 2005

The rise in statutes

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More states have enacted construction-defect statutes that can benefit you

by Stephen M. Phillips
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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.

General information

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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