New Home Construction Defects – Home Purchaser's Rights

Nothing is more upsetting to the purchaser of a new residence than to find out that it has defects that must be repaired and to find resistance from the builder to repairing the defects. Good buildiers will quickly remedy their mistakes. But what if they don’t? Unfortunately, some builders try to increase their profits by cutting costs during construction, a process that they creatively call “value engineering”, and then when the home puchaser discovers that the residence is not what it was advertised to be in the sales process, they are met with excuses and resistance, excuses and delays.

The Punchlist Period – the first 12 months

In most new home purchases, the first 12 months after occupancy is called the punchlist phase. During that phase the home purchaser usually is given a form to fill out where they can list defects in their home that they observe during the first year. Often the builder explains that the first 12 months are “the warranty period” and that after that 12 months is over, the builder will sometimes tell the home owner that they – the builder – are no longer responsible to make repairs of defects. Do not be fooled into believing that after the first 12 months, a builder has no responsibility to make repairs.

Although a homeowner must be very diligent about making a thorough and detailed inspection of the residence for defects in the first 12 months, the builder in Hawaii is responsible to correct defects discovered during at least the first 6 years. The 6 year time period is called the statute of limitations and is a law passed by the legislature that provides up to 6 years for a homeowner to bring a claim for construction defects when a written contract is involved. Home purchases always involve a written contract. So, although the one year punchlist period is a part of home purchase rights, the law in Hawaii allows up to six years to bring a claim for a defect in construction that the homeowner discovers.

Many defects in construction are hidden from view and may not be discovered for years after occupancy. These are referred to as latent defects. The law allows additional time for a homeowner to bring a claim for a latent defect because it is not fair to hold them to an arbitray time limit when the problem was caused by the builder. they can’t hide it from you and then say that you should have discovered it earlier. However, if the defect is open and obvious, the homeowner has a responsibility to be diligent in observing it and reporting it promptly.

Often home purcahsers are misled by the builder into believing that there is nothing that they can do about a defect in their new home that is discoveredmore than 12 months after occupancy. Don’t be fooled. Know your rights.