When you are building or remodeling a home, sometimes contractors make mistakes. Sometimes they even engage in intentional misconduct. In these types of situations, it is important for homeowners to understand their deadline to initiate legal action.
Statute of Limitations for Construction Defect Claims
Many, if not most, legal claims by homeowners against contractors involve construction defects, which are when your contractor makes an error in the construction of your project, like sagging roofs or floors, improper siding installation, gaps around the doors or windows, and so on.
Under Minnesota law (Minn. Stat. § 541.051), the statute of limitations for construction defect claims is two years. In other words, you must initiate a lawsuit against the contractor(s) responsible for the defect within two years. This two-year period starts on the date you discovered (or reasonably should have discovered) the defect. Importantly, this period does not begin to run “earlier than substantial completion, termination, or abandonment” of your project.
There is also a ten-year statute of repose for construction defect claims in Minnesota. This means that you must initiate a lawsuit within ten years, regardless of when you discovered the defect. This ten-year period starts on the date of “substantial completion” of your project, which is defined as “the date when construction is sufficiently completed so that the owner or the owner’s representative can occupy or use the improvement for the intended purpose.” One caveat: if you discover a construction defect in year nine or ten of the ten-year repose period, the two-year limitations period will run from the date of discovery, “but in no event may such an action be brought more than 12 years after substantial completion of the construction.” So, in some cases, you may have a brief extension to initiate a lawsuit if the defect was discovered in years nine or ten.
Exceptions to the Statute of Limitations
While you should always try to comply with the deadlines explained above, there are some recognized exceptions to the default statute of limitations for construction defect claims in Minnesota. Three exceptions are discussed below.
Fraud: If your contractor engages in fraud, this can toll (i.e., pause) the statute of limitations. For example, if your contractor acted to conceal the defect so that you would not discover it in time to sue, the contractor will not necessarily be able to rely on the statute of limitations to defeat your claim.
Repairs: If you report a defect to your contractor and the contractor returns to your property to fix it, or explicitly promises to do so, this can also toll the statute of limitations. The limitations period is tolled for the amount of time that the contractor is engaged in this repair effort. However, if the contractor’s efforts do not fully repair the issue, the limitations period resumes. You should be wary of contractors who simply discuss potential repairs with you. Just talking about the issue or the repairs with your contractor is probably not enough to toll the statute of limitations. Contractors are often aware of this and will use it to their advantage. If the two-year deadline is approaching, it is always best to commence a lawsuit to avoid losing your claim entirely.
Warranty claims: The statute of limitations for warranty claims—either for breach of Minnesota’s statutory warranties for residential construction (Minn. Stat. § 327A.02) or for breach of an express warranty made by the contractor—works a bit differently from other claims. A warranty claim for a covered defect is not triggered until you discover that your contractor will not perform the warranty work. The two-year statute of limitations runs from this date, which may not be the date you discovered the defect. However, homeowners should be aware that potential statutory warranty claims must be reported to their contractor in writing within six months after they discover the defect.
Statute of Limitations for Other Claims Against a Contractor
If your contractor harmed you in ways besides poor workmanship, like stealing money or other property from you, a different statute of limitations may apply. For most other claims that could be asserted against a contractor (i.e., besides construction defect claims), a six-year statute of limitations applies (Minn. Stat. § 541.05). But other statutes of limitations could apply, depending on the nature of the claim.
Key Takeaways for Homeowners
The general rule in Minnesota is that construction defect claims must be brought within two years of when the defect is discovered and within ten years of when the project was substantially completed. But there are some limited exceptions to this rule, as described above. A different statute of limitations may apply if you are considering suing your contractor for something other than a construction defect.
For homeowners, the most important takeaway here is that you must act quickly when you discover a potential construction defect with your property or misconduct by your contractor. Your failure to act within the deadlines set by the law can lead to you losing the ability to recover compensation from your contractor in a lawsuit.
An experienced construction litigation attorney can help you determine if you have a claim against your contractor and, if appropriate, take legal action within the applicable deadlines. Please contact Nicklaus A. Johnson (njohnson@hjlawfirm.com; 952-746-2199) to learn more.
