What
is Construction Defect?
Generally speaking, a construction
defect is a deficiency in the design or materials or systems or workmanship and
construction of a building or structure resulting from a failure to design or
construct in a reasonably workmanlike manner, and/or in accordance with a
buyer's reasonable expectation.
Workmanship defects typically
result from the contractor’s failure to build a structure or component part of
a structure per the construction documents. Workmanship defects may include
items such as an improperly installed weatherproofing system, improperly
installed stucco or EIFS exterior wall system, soils that were not properly
compacted, or improperly installed flashing or a lack of flashing.
The most dangerous defects
have the capacity to fail, resulting in physical injury or damage to people or
property. However, many defects present
no increased risk of injury or damage to other property but nevertheless cause
harm to the property owner in the form of loss of use, diminution in value, and
extra expenses incurred while defects are corrected. This latter type of defect is often referred
to as a passive defect. Whether, and to
what to extent, coverage applies in liability policies for claims alleging
construction defects is a matter of serious debate both in insurance circles
and in the courts. Many states have more
specifically defined the term "construction defect" for purposes of
applying statutes that dictate processes for remedying and litigating
construction defect claims. These statutory
definitions vary by state.
California
The California State Jury Instructions
define a construction defect as “the failure of the building or any building
component to be erected in a reasonably workman like manner or to perform in
the manner intended by the manufacturer or reasonably expected by the buyer,
which proximately causes damage to the structure.”
A construction defect would
result from:
1.
Defective
building material or components.
2.
A
violation of Building Codes at the time of construction.
3.
Failure
to meet professional standards for design at the time plans were approved.
4.
Failure
to build according to accepted trade standards for good and workmanlike
construction.
Common examples of defective
construction may include: Significant cracks in the slab and/or foundation;
unevenness in floor slabs caused by abnormal soils movement; leaky roofs and/or
windows; moisture problems due to improper drainage and/or waterproofing;
faulty or corroded plumbing; faulty framing; over stressed structural members,
bowing or slanting of floors and walls; doors and windows that bind and are
difficult to open and close; and cabinets or counter tops that are separated
from walls or ceilings. (This is not an all-inclusive list.) Any condition in your property which makes it
unsuitable for its intended use may be considered a defect. (California Civil Code 896)
Texas
Under Texas Law, the answer
to this question depends on whether you are focusing on commercial or
residential construction.
- For commercial construction, no statutory definition exists for the term “construction defect”. As such, the courts may look to other sources for guidance. As a point of reference, some insurance policies have defined construction defects (in reference to exclusions for coverage) to mean any alleged or actual defective, faulty or delayed construction, whether or not as a result of:
- Faulty or incorrect design or architectural plans
- Improper soil testing
- Inadequate or insufficient protection from ground movement, settling or shrinking
- Construction, manufacture or assembly of any tangible property
- Failure to provide (or to pay for) construction-related goods or services
- Supervision of all of the above
- For residential construction, the non-expired Residential Construction Commission Act defined a construction defect as any matter in which a person has a complaint against a contractor with regards to:
- The design, construction, or repairs of a new residence, or
- Alterations, repairs or additions to an existing residence or adjacent structures
- The term may also refer to physical damage to the residence, adjacent structures or the actual property on which these structures sit which was caused by a construction defect.
Minnessotta
Minn. Stat.
§327A.02, subd. 1(c) (2010), states that contractors must provide to homeowners
a warranty ensuring a residential dwelling will be free from major construction
defects for a ten-year period. “Major construction defect” is defined as
follows:
actual damage to the load-bearing portion of
the dwelling or the home improvement, including damage due to subsidence,
expansion or lateral movement of the soil, which affects the load-bearing
function and which vitally affects or is imminently likely to vitally affect
use of the dwelling or the home improvement for residential purposes. “Major
construction defect” does not include damage due to movement of the soil caused
by flood, earthquake or other natural disaster.
Minn. Stat.
§ 327A.01, subd. 5 (2010).
Many insurance policies define construction defect as follows:
CONSTRUCTION DEFECT is defined as the failure to perform “your work”
in a reasonably workman-like manner so that “new residential construction” is
unable to serve the purpose intended or reasonably expected by the purchaser.
“Construction Defect” may arise from any and all aspects of the
erection of “new residential construction”, including but not limited to
surface or subsurface site preparation and the installation of:
(1) Live horticultural elements;
(2) Permanent landscape features made of stone, brick or concrete;
(3) Outdoor systems such as lighting, sprinklers and drainage;
(4) Exterior
additions and appurtenant structures such as decks, porches, stairs, sheds,
pergolas, arbors and gazebos.