Construction defects can quickly diminish property value. Construction relies on precision, and anything less can lead to an immense amoun...
Construction defects can quickly diminish property value. Construction relies on precision, and anything less can lead to an immense amount of time and money for homeowners facing reconstruction and repair costs, marketability issues, and loss of use.
Responsibility for decreased value should be placed at the feet of the contractors who took the job, but sometimes those damages aren’t clearly visible. The following should be considered when calculating the impact of a construction defect.
Reconstruction and Repair Costs
The most obvious impact of an improperly built home is the faults within it. Poor wiring, leaking pipes, mold, improperly sealed basements, termites, warped wood, and weak flooring...these are just a few examples of construction flaws that can take months of repairs, if not an outright reconstruction of a whole house. That’s not even taking into consideration the astronomical costs such projects would take.
Marketability Issues
Living in the modern world, speaking to one person can just as easily mean speaking to a thousand. Whenever an issue with construction or the general safety of a home becomes public knowledge, stigma may become attached to the property, affecting potential buyers' perception of the home.
Additionally, sellers must disclose known construction defects and any litigation, which can quickly turn borrowers away.
Loss of Use
Sometimes repairs can take months or even years. When homes require extensive repairs, homeowners may need to find another place to live. Similarly, a construction defect may prevent the property owner from leasing out the home to a tenant to collect rental income. In most cases, property owners can recover the cost of renting a substitute home or the loss of rental income when they file a claim or take legal action. Damages can be calculated by multiplying the duration of the nonuse by the cost of substitute housing or loss of rental income.
A real estate appraiser typically values a property by comparing homes nearby that are similar except for the faulty condition. If a property is unusable, its value shrinks considerably when a real estate valuation is performed.
It is imperative that a homeowner who notices a construction defect takes action to have the issue repaired to minimize further damage or hazards that may cause injuries. Additionally, promptly filing a construction defect claim or lawsuit, if necessary can help ensure homeowners are able to recover damages. There are statute of limitations that vary by states which govern how long a person has to take legal action.
The law generally provides the negligent contractor with the opportunity to repair construction defects. If the defects are not promptly repaired, however, the homeowner may have a variety of avenues for dispute resolution. This may include taking legal action for breach of contract, breach of warranty, or gross negligence.
