John R. Teare, Jr. | Spilman Thomas and Battle | May 18, 2015
In residential construction, problems can arise with customers that cause expensive litigation. In West Virginia, a right to cure in residential construction by statute can alleviate such costs.
The statutory term is residential improvement, which is defined as:
- the construction of a residential dwelling or appurtenant facility or utility;
- an addition to, or alteration, modification or rehabilitation of an existing dwelling or appurtenant facility or utility; or
- repairs made to an existing dwelling or appurtenant facility or utility.
In addition to actual construction or renovation, residential improvements actually added to residential real property include the design, specifications, surveying, planning, goods, services and the supervision of a contractor’s subcontractor, officer, employee, agent or other person furnishing goods or services to a claimant. West Virginia Code §21-11A-4(10).
In general, a homeowner is required to give written notice to the general contractor of a claim of construction defects providing:
- the nature of the alleged construction defect and a description of the results of the defect;
- a description of damages caused by the alleged construction defect, including the amount and method used to calculate those damages; and
- the legal theory of recovery, i.e., a construction defect, including the causal relationship between the alleged construction defect and the damages claimed.
The contractor also has an immediate right to request additional information regarding the claim, including the right to review and copy the customer’s photographs, videotapes and expert/consultant reports. The general contractor also has the authority to send similar notices to his subcontractors on the job to give them the opportunity to directly cure their own issues.
Within 30 days, the contractor shall respond in writing with an offer of compromise which may be financial or request a site inspection of the defect and damage. Failure to respond within the time period or a rejection of the demand permits the customer the right to file suit without delay. A civil action is only authorized as to defects or damages identified in the statutory notice; defects or damages subsequently discovered are subject to the same separate notice requirements applicable to the original notice.
If the customer permits an inspection, the contractor is entitled to reasonable access to the home during regular working hours and must give the homeowner a written response or proposal within 14 days which may be a financial settlement offer, a repair offer or notice that the contractor will not remedy the situation. The homeowner has 30 days to accept or reject any offer made or may negotiate further. Rejection by the homeowner requires the homeowner to provide the basis for rejection in writing.
The statute imposes a duty of good faith upon all parties in negotiation. Any settlement must be in writing and a partial settlement agreement permits the customer the right to litigate any claim not resolved.
The benefits of this process should be obvious in that expensive litigation can be avoided either by settlement or explanation of the customer’s misunderstanding of the cause of the claimed defect and/or damages. Moreover, although the statute does not specifically provide any fee shifting provisions, an unreasonable customer who rejects an offer may later be subject to sanctions by a court, including reasonable attorney’s fees if the court determines the suit was filed for an improper purpose or without sufficient factual basis for the proceeding. However, such awards are relatively rare in the West Virginia Circuit Courts.
Finally, the statute does not apply unless the contractor provides written notice to the customer when the construction contract is formed and does not apply in certain instances. Identified at West Virginia Code §21-11A-2, such claims include those under $5,000, claims that the residence is not habitable, or contracts with arbitration, mediation or other alternate dispute resolution requirements.
The statute and required disclosure can be found at West Virginia Code §21-11A-1 et seq.