How to Sue for Home Defects

Posted on March 6, 2013 in Arizona Law Regarding Business and Real Estate

At the Law Firm of William A. Miller located in Scottsdale Arizona we are often asked to represent buyers who purchased defective homes.

Here is a simple legal analysis we perform:

What is the timing?

The statute of limitations for breach of a written contract is six years from the date that the breach occurred. See A.R.S. §12-548.  This six-year statute also applies to claims by both the original buyer and subsequent buyers against homebuilders for breach of the contractual implied warranty of proper construction, but this claim is limited to no more than eight years after completion of the home, no matter when the construction defect was discovered.  A.R.S. §12-552.  The statute of limitations for fraud is generally three years from when the fraud was discovered. A.R.S. §12-543.  The statute of limitations for negligence is generally two years from when the negligence was discovered.  A.R.S. §12-542.

Who pays for this loss?

A winning party is entitled to attorneys fees in breach of contract and in fraud claims.  In negligence claims, however, no fees are awarded. So, sue for contract breach! The homebuilder may be liable to the buyer for breach of the contractual implied warranty if there was improper construction.  The buyer would have four more years under the eight-year limitation to file a claim against the homebuilder because the home was built four years ago.  The buyer should be entitled to reasonable attorneys fees under A.R.S. §12-341.01.

What do the Forms say?

Under the Arizona Association of REALTORS® purchase contract the seller has a contractual duty to disclose to the buyer known defects in the home.  If the seller knew of the defect the buyer would have six years after discovery of the defects to file a claim for breach of written contract against the seller. Finally, the buyer would only have three years to file a fraud claim against the seller, but should be entitled to attorneys fees for prosecuting this fraud claim.

Can we shotgun (sue everyone) this?

Buyers are always upset with the brokers in these cases. Remember, the real estate brokers were not parties to the purchase contract.  Therefore, there is no breach of contract claim and the buyer would only have three years to prosecute a claim against the brokers for any fraudulent non-disclosure, and only two years to prosecute a claim for any negligent non-disclosure, i.e., the brokers should have known of the defects.   Good luck with that one. If the real estate brokers knew of, and fraudulently failed to disclose the defect, the buyer is entitled to attorneys fees.  If the real estate brokers were only negligent, i.e., should have known of the defective roof, the buyer is not entitled to attorneys fees.

Call us at 602-319-6899 for further questions.

William A. Miller, Esq. Attorney at Law. 8160 North 86th Place, suite 208 Scottsdale Arizona 85253.

We also handle, Breach of contract, Non-compete agreements, Non-disclosure agreements, Employee theft and embezzlement, Insurance purchases and enforcement of policy coverage, Negotiation and/or enforcement of commercial leases, Negligence and gross negligence resulting in losses, Intentional acts causing a company to suffer damages, Tortious interference with contractual relationships, Unjust enrichment, Real Estate fraud, Consumer fraud, Conversion/Theft, Intentional and/or negligent misrepresentation, Business torts and Real estate title & escrow.

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