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The ABC’s of construction defect claims

You may have been planning the construction of your new business for years only to find that a construction defect has derailed the project you have spent a significant amount of money on and delaying the ability of your business to get off the ground. When this happens, you may want to learn more about your rights to pursue litigation against the appropriate party in California to be compensated for the damages you suffered.

The four types of construction defect claims

There are four general categories that a construction claim can be based on. One is design defects. The architect or engineer involved in your project can cause a design defect leading to problems with the structure when the design plans are followed to a tee.

Another type of construction defect that a construction claim can be based on is a material defect. The contractor in charge of building the commercial structure may have used inferior or defective materials in the construction of the structure. This can cause problems even if the defective materials were properly installed.

A third type of construction defect that could lead to a construction claim is a workmanship defect. Even if all plans are appropriately designed and the best materials are used carelessness on the part of the contractor’s or subcontractor’s employees can wind up damaging the structure.

Finally, a fourth type of construction defect that a construction claim can be based on is a subsurface defect. These defects include issues with the construction site itself, such as expansive soil conditions or contaminated soils.

How long do you have to pursue a construction defect claim?

There are several elements that the ability of a commercial project owner to pursue a construction defect claim. First, under California law a project owner must provide notice to the party allegedly responsible for the defect of the defect and give the responsibility the chance to inspect and repair the defect. This is known as the “right to cure.”

Second, the project owner only has a limited window in which they can file a construction defect claim following the discovery of the defect. This time period is known as the statute of limitations. Once this time period has passed a construction defect claim can no longer be pursued. California has a four-year statute of limitations for breach of contract claims and a three-year statute of limitations for property damage.

In addition to the statute of limitations California also has a statute of repose. A statute of repose is the time period a project owner has to file a construction defect claim even if the defect has not been discovered. In California the statute of repose is four years following the substantial completion of the project and 10 years for latent defects.

Negligence, breach of contract and the economic loss rule

Many construction defect claims are based either on the tort of negligence, breach of contract or a mix of the two. However, if the parties to the dispute have a contract, then the project owner’s recovery is limited to what is available in breach of contract cases and they cannot recover economic losses based on negligence. This is known as the economic loss rule. This rule may even apply if the damages were caused by a defective product that it itself is damaged, but it has not damaged any other components of the project.

Learn more about real estate litigation

A commercial construction project is a huge investment. Should a defect occur, it could significantly damage this investment and derail the project entirely. This post is for educational purposes only and does not contain legal advice. Project owners in California who believe they have a construction defect claim may find our firm’s website on real estate litigation to be informative.