In Washington, a homeowner may bring a construction defect action against a construction professional. But there is a 45-day “holding period” before such a claim may be filed. The purpose of this holding period is, among other things, to give construction professionals an opportunity to exercise the “right to repair” construction defects—by either fixing the defect or compensating the homeowner—and thereby avoid the time and cost of a lawsuit.[i] This right to repair, however, is easily squandered if the construction professional does not observe the deadlines for exercising the right and then finds itself embroiled in litigation that could have been avoided.
So, what are the rules, and how can they be followed?
Consider the following scenario. Pam has grown weary of the high cost of living in Seattle, so she decides to have a house built in rural Washington. She hires a local construction company, Houses Done Fast (HDF), to build the house. True to the HDF name, the house is finished in three months. Pam is overjoyed. But her joy soon turns to dismay when she discovers that the roof above the master bedroom leaks whenever it rains. Now, Pam wants to sue HDF for the leaky roof.
First, though, Pam must serve a “notice of claim” on HDF. That is, she must notify HDF in writing that she plans to bring a construction defect claim. In doing so, she must describe her claim in sufficient detail for HDF to determine the nature of the defect. Once Pam serves the notice of claim on HDF, the 45-day “holding period” begins.
At this point, what options does HDF have?
- Do Nothing. HDF may choose to do nothing. If it does nothing, Pam may bring her suit, though she will have to wait no fewer than 45 days after serving the notice of claim to do so.
- Dispute the Claim. HDF may dispute Pam’s claim. By disputing the claim, HDF communicates to Pam that it will neither fix the defect nor compromise and settle the claim. But HDF must act promptly—it can only dispute the claim by notifying Pam in writing within 21 days of receiving the notice of claim. If HDF disputes the claim, Pam may bring suit without further notice.
- Offer to Settle. HDF may make an offer in writing to settle Pam’s claim. When it comes to settlement, HDF has two paths it can take. First, it may (without inspecting the premises) pay Pam a sum of money to settle the claim. Second, it may buy Pam’s house and pay her (reasonable) relocation costs. Whichever option HDF chooses, it must act within 21 days of receiving the notice of claim. If HDF offers to settle, and Pam does not respond within 30 days, then HDF may revoke its settlement offer.
- Ask to Inspect. HDF may ask Pam’s permission to inspect the alleged defect. In so asking, HDF must state that it will, based on the inspection, (i) offer to remedy the defect, (ii) compromise by payment, or (iii) dispute the claim. HDF must ask permission within 21 days of receiving the notice of claim. If Pam does not respond within 30 days, then HDF may revoke its proposal to inspect. If Pam grants permission to inspect, then she must provide HDF reasonable access to the residence. If Pam rejects the proposed inspection, she must notify HDF in writing. After giving such notice, Pam can then bring her claim.
Within 14 days of the inspection, HDF must serve on Pam either (i) a written offer to repair the defect free of charge,[ii] (ii) a written offer to settle the claim by payment, or (iii) a written statement that it will not proceed to fix the defect. If, after 14 days, HDF has not served a post-inspection statement, then Pam may file suit.
[i] A contractor must include in its contract for a residential sale, construction or remodel, or sale of a condominium unit, a “conspicuous” notice to homeowners of the right to repair. RCW 64.50.050.
[ii] The offer must include a report of the scope of the inspection, the findings and results of the inspection, a description of the additional construction necessary to fix the defect, and a timetable for finishing construction. Notably, if HDF fails to meet the repair timetable, Pam may file suit.