So You Have Received a Repair Offer–Now What?

So You Have Received a Repair Offer–Now What?

In the past, I have discussed some considerations that property owners, such as condominium and homeowners’ associations, as well as individuals, may have when alleging a claim for construction defects against contractors and developers.

Once an offer for repairs of defects has been made, owners may feel both relieved and overwhelmed, as they realize they now have a whole new set of issues to address. That is why, before accepting a repair offer, it is usually a good idea for owners to speak with their attorneys about memorializing the parameters of the offer in a written agreement. For example, among other things, owners should consider: whether the types of repairs offered resolve all or only a portion of the defects claim, whether the corrective work is intended to be just a temporary repair versus a more permanent solution, and whether there are any defects which, if left unrepaired, may pose a threat to the health, safety or welfare of others.

While defects claims do not typically lend themselves to a “one size fits all” approach, an owner’s repair agreement generally should address some of the following issues:

1.      What is the scope of the repairs? Are the methods and materials acceptable to the owner?

2.      Who is furnishing labor and materials?

3.      Who is paying for the permits, taxes, or governmental fees?

4.      When will the work begin? How long will it take to complete?

5.      What happens if the work is delayed?

6.      Will the owner be given a chance to inspect the work?

7.      Will the owner have a consultant on hand to assist with reviewing the scope of work or inspecting the repairs?

8.      What happens if the owner or its consultant rejects any part of the repairs?

9.      What happens if the parties cannot agree upon a mutually acceptable repair method?

10. Who will be responsible for any liens that may be filed against the owner’s property?

11. What happens if there is any property damage, personal injury, theft, vandalism, casualty loss, or adverse weather conditions arising during the course of the repair work?

12. Are any warranties being offered to the owner?

13. Is the person or entity performing the work bonded or insured?

14. What are the owner’s duties to the person or entity performing the repairs?

15. What are the owner’s rights or remedies if the repairs are never completed as promised?

While the foregoing is not intended to be an exhaustive listing of contract terms, it does illustrate some of the issues property owners may need to consider when accepting a contractor or developer’s offer of repairs. This is why property owners should speak with their attorneys before allowing anyone to perform repairs to construction defects.