By Barry Stone
Dear Barry,
Our home is still covered by a builders' warranty for structural defects, and we've just discovered that two foundation walls are leaning inward. The builder has offered to give us a cash settlement for repairs, but friends have advised us not to take the cash because this would relieve the builder of future related claims. They say that liability for foundation problems would shift from the builder to the contractor we hire to do the repairs. Can we legally refuse the cash and insist that the builder perform the repairs? - Bill
Dear Bill,
Your builders' warranty provides vital, long-term protection from financial consequence and, therefore, should be carefully guarded. Hiring your own contractor to perform warranty-related repairs could permanently alter the warranty relationship with your builder, especially if the work performed is pursuant to a financial settlement with the builder. Much depends upon the wording of the original warranty, the provisions of the settlement documents the builders expect you to sign, and state laws governing builders' warranties and contractors' liability. To prevent regrettable errors in this decision, legal advice should be carefully considered before proceeding, and you should seek an attorney with experience in construction defect law.
If your attorney advises you to accept the cash settlement, the amount should be determined by obtaining bids from at least three licensed contractors, and bids should be based upon a structural engineer's written evaluation of the foundation problem.
Copyright 2004-2006 Barry Stone. Distributed by Inman News.
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