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Duties Owed By Contractors

One of the most commonly misunderstood matters by homeowners with new construction or remodeling projects is the warranties they are provided and their interplay with the other responsibilities contractors owe for their work. Many homeowners mistakenly believe that if something goes wrong on their project, their only recourse is whatever is set forth in the warranty. While the written warranty does provide and define certain rights and remedies, it typically is not the full extent of the duties a contractor owes to a homeowner. Having a basic understanding of the possible range of responsibilities a contractor may owe in a construction project makes for an informed homeowner. 

  1. Express warranties are those explicit promises about how the work will be after it is performed and what things a contractor will or will not do to remedy work that is not found to be in that promised condition. Express warranties can be as simple as a one sentence promise that the contractor warrants that the work will be free of defects for a year from its completion, or as intricate as a book that sets forth the standard for each division of work. Sometimes express warranties also contain provisions that a homeowner must follow it he wants to make a warranty claim (e.g. report the issue within a certain amount of time, mediate disputes first, start a lawsuit within a certain amount of time). Other times, express warranties provide an entirely separate company to administer disputes. Many times, especially when the express warranty is a book, homeowners believe that the express warranty is the full extent of a builder's obligations with regard to the work performed. However, that typically is not the case.
  2. Under Minnesota law, "vendors" and "home improvement contractors" are required to provide the statutory warranties set forth in Minnesota Statute Chapter 327A (the "Statute") for certain work. While it is important to review the particular definitions and terms of the Statute to know for sure whether these warranties apply to the work at hand, generally speaking, they will apply for new home construction and significant remodeling projects. The Statute provides for 1-, 2-, and 10-year warranties, and each of these warranties sets forth specific requirements for the performance of the work during each of these periods. Except in very limited circumstances, these warranties cannot be waived. However, among other things, they do have specific requirements for providing notice, an opportunity to repair, and following a dispute resolution process.
  3. Under Minnesota common law, contractors also owe homeowners a duty to perform their work in a good and workmanlike manner. Typically, contractors owe this duty irrespective of whether they provide any express warranties or the work they have performed fits within the definition of the statutory warranties. Therefore, if the construction work was performed defectively, homeowners likely have a claim for breach of this common law duty.
  4. The licensing statute for residential building contractors and remodelers required licensees to provide written performance guidelines in their contracts. The statute does not define the standards that must be provided, and different contractors have handled the requirement differently. For some, the performance standards look very much like and may simply be, express warranties. However, these performance standards may also create additional obligations and duties for a contractor.
  5. The terms of the contract between a homeowner and a contractor may also create additional duties and responsibilities for a contractor and a homeowner may have a separate claim for breach of contract if those duties are not met.

A homeowner may have a variety of different claims if problems develop on a construction project. The considerations surrounding the types of claims the homeowner may have, however, are numerous and can be complicated. Among other things, homeowners must be careful to provide proper notice, satisfy any conditions precedent for pursuing a claim, and ultimately pursue the claim in a timely manner and through the proper forum. Consequently, it is wise for a homeowner to discuss any potential claims as soon as possible with an attorney.

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Thompson Tarasek Lee-O'Halloran PLLC

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Edina, MN 55435

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