Agents: Many Washington State Builders Miss Out On New Protections From Construction Defect Claims

By
Services for Real Estate Pros with Heffernan Law Firm

    Many Washington State builders, particularly in the single-family home market, are failing to take advantage of recent changes to Washington law regarding construction defect claims.  Specifically, these builders are failing to include in their purchase and sale agreements a notice to homebuyers that may prevent that homebuyer from commencing a construction defect lawsuit until after the homebuyer has complied with several statutory notice requirements that aim to provide the builder with an opportunity to cure the alleged defects.

(c) 2007 James Hillyerd.     RCW 64.50, the Construction Defect Claims Act, became effective in 2002 at the instance of the construction industry.  The law aims to protect builders, contractors, and other construction professionals from claims by homebuyers by first requiring that the homeowner provide the builder with written notice of the defects at least forty-five days before bringing a lawsuit.  Then, the builder has twenty-one days to respond in writing.  The builder may respond in one of three ways: 1) propose to inspect the residence and complete inspection within a specified timeframe; 2) offer a settlement payment without inspection; or 3) dispute the claim entirely.  This last option allows the homeowner to bring suit immediately.  Otherwise, the homeowner has the opportunity to accept or reject the inspection offer or settlement proposal.  The law includes additional requirements for both parties if the homeowner accepts the inspection offer or settlement proposal.  The goal of this process is to encourage settlement of construction defect claims without litigation; a homeowner’s failure to follow this process could result in a dismissal of all claims.

     However, many Washington builders cannot claim the benefit of RCW 64.50’s notice provisions because they themselves are failing to comply with the statute.  Specifically, RCW 64.50.050 requires a builder to provide a homeowner with conspicuous notice upon entering into a purchase and sale agreement of the builder’s right to receive notice of defects and offer to cure those defects before the homeowner may bring suit.  The notice must be part of the underlying contract signed by the buyer.  (In a condominium sale, the notice may instead be included in the public offering statement.)  The statute also provides the form that the notice must follow.

     Without this “notice of notice,” as it was dubbed by Washington State’s Supreme Court, the homeowner cannot be required to provide the builder with pre-litigation notice of construction defects.  See Lakemont Ridge Homeowners Association v. Lakemont Ridge Ltd. Partnership, 156 Wn.2d 696, 131 P.3d 905 (2006).  As a result, the builder may have forfeit its right to offer to repair the defects or to offer to settle before a lawsuit is filed against it.  The builder may have also forfeit potential defenses in the event that litigation arises, including a defense that the homeowner did not provide proper notice prior to filing suit.  Thus, to take advantage of RCW 64.50’s notice requirements, builders must themselves be sure that they are complying with the notice requirements of that law.

     RCW 64.50 generally applies to sales of newly constructed residences, including homes and condominiums.  Consult an attorney to determine how the requirements of RCW 64.50 may apply to your situation. 

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Anonymous
Mary Thurtle

THANK YOU!!!! I am forwarding to all my builders and will begin including this language in each contract.

 

Jul 09, 2007 05:49 AM #1
Rainer
1,784
Imants Holmquist
Holmquist & Gardiner, PLLC - Seattle, WA
Yeah, I have this in all of my K's, this is good stuff. Thanks for the post. The link to Lakemont Ridge is good to.  
Jul 18, 2007 08:53 AM #2
Rainmaker
46,093
Sarah Nopp
South Sound, WA

WOW! Thank you so much. I am forwarding this on. And rereading it.

I wish the state would figure out a way to let everyone know of these changes in the law.

Sep 20, 2007 05:46 PM #3
Rainer
8,778
Jonathan Sprouffske
Connolly Tacon & Meserve - Olympia, WA
Great topic, I wish there was a way to make more of the builders aware of this on the front end.  Thanks for bringing this up.
Jan 25, 2008 05:59 AM #4
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