New Home Warranties
It is not uncommon for disputes, both minor and major, to arise during and after new home construction or improvement projects. While sometimes a homeowner and contractor can privately resolve such issues, there are times when the dispute rises beyond private resolution. When private resolution is not an option, it is helpful to understand the statutory dispute process between homeowners and contractors. It is also helpful to speak with an experienced attorney, such as the attorneys at Wilkerson & Hegna regarding potential resolutions.
Minnesota Statute § 327A provides statutory warranties that apply to new homes as well as certain home improvements. When it comes to new construction homes, Minnesota Statute § 327A makes three different warranties. First, that for one year, the home will be free of defects caused by faulty workmanship or materials. Second, that for two years, the home will be free of defects caused by faulty installation of heating, cooling, electrical or plumbing systems. Third, that for ten years, the home will be free of “major construction defects.” In cases of home improvements involving major structural changes or additions, Minnesota Statute § 327A provides also provides warranties. First, that for a period of one year the home improvements shall be free from defects caused by faulty workmanship and defective materials due to noncompliance with building standards. Second, for a period of ten years the home improvements shall be free from “major construction defects” due to noncompliance with building standards.
Contractors can comply with the requirements of Minnesota Statute § 327A by writing the text of Minnesota Statute § 327A.01 and § 327A.08 directly into their residential construction contracts or by attaching the statutory warranties to their contracts. Importantly, these statutory warranties cannot be waived.
A general contractor has a duty to a homeowner to construct a home in a workman like manner, and failure to properly construct a home, or its improvements, will fall on the general contractor. But in the case of damage resulting from a subcontractor’s work, the general contractor may have a right of indemnity against its subcontractors, even if the general contractor approved the subcontractor’s work. Because of the potential complications regarding indemnification rights and obligations, having an experienced attorney review indemnification clauses and requirements is always advised.
When bringing claims under Minnesota Statute § 327A, a homeowner cannot file a lawsuit against a contractor until the homeowner has given the contractor written notice of the problem. After written notice is given, the contractor has thirty days to inspect the alleged defects. Should a contractor receive written notice of alleged defects, speaking with an attorney can assist the contractor to objectively evaluate the situation and potential options going forward. A contractor then has fifteen days from the inspection to provide a written offer to repair the defects. If a contractor makes a written offer to repair the defects, the homeowner may not file a lawsuit until at least sixty days have lapsed since the written repair was provided or until the homeowner and contractor complete the home warranty dispute resolution process through the Minnesota Department of Labor and Industry.
The text of Minnesota Statute § 327A can be found at: