Protecting Yourself from Housing Defect Accusations

Within the housing industry, there are so many won...

Within the housing industry, there are so many wonderful, dedicated builders and developers who carefully construct beautiful, quality properties. Their creations provide homeowners with places to live that are both showpieces and solid investments.

But unfortunately, not everyone builds quality homes. As a result, homeowners are becoming increasingly concerned about housing defects.

And with good reason. A homeowner’s recourse may vary, and fixing defects can be expensive.

We live in a litigious society, and the truth is, even if you’re doing solid work, things can go wrong — other contractors can install something incorrectly, affecting your work; materials you thought were fine can end up being anything but; and sometimes, an overly-anxious new homeowner may not know if it’s your fault or not.

Aside from doing honest, quality work, how can a builders protect themselves? Here are some tips:

  • Make sure your company is known as a legit organization. The unfortunate truth is some builders have taken advantage of the system to underbid, build quickly and not guarantee their work. As a result, British Columbia is considering a new Homeowner Protection Act to ensure construction quality, after finding builders had reportedly used a local owner builder exemption to avoid getting the required mandatory warranty insurance or license, which also left the consumer at risk.

What can you do? Collect references so that you have some handy for new clients. Take photos of your work and consider putting together a pamphlet or Web site showing your past projects. PR can be a huge ally when establishing a solid industry reputation.

  • Know What You’re Responsible For. Courts typically categorize construction defects into four
    categories: design deficiencies, material deficiencies, construction
    deficiencies or subsurface/geotechnical deficiencies (which is especially important in California and Colorado, which both have varying soil conditions).

Know where your work falls. If you’re working with an architect, make sure they’re contractually liable for their work, as you are for yours. Confirm the land is solid enough to build on (or confirm it has been certified as such by someone else.) Make sure your materials are coming from a reputable source.

  • Older houses have older problems. Keep this in mind when accepting remodeling jobs. "Older houses are more likely to have defects: plumbing, electrical, structural, roofing, anything," Tom Early, former president of the National Association of Exclusive Buyer Agents, told the Contra-Costa Times.
  • Voluntary inspections can help safeguard you. Even if you’ve had the usual safety inspections, consider hiring an outside inspector to examine the property — and agree to the buyer’s suggestion to do so if it’s brought up.

It’s a trend that is growing: Some cities, like Hutchinson, Minn., are beginning to suggest
inspections even for rental residential structures, with a charge for each
unit inspected, in addition to any local fire and insurance inspections.

If an undisclosed defect is discovered after you sell the property, having had an inspection, you are less likely to be suspected of having concealed the problem, according to the Times. It is also important to hire a home inspector with a good reputation — that will also imply you’re not trying to hide anything.

Because after all, if your work is solid, what do you have to hide?