If you have or think you may have a moisture intrusion/mold problem with your home, read this:
CHANGES IN THE LAW AFFECTING HOMEOWNERS
In May 2006, the governor signed into law two changes in the statutory warranty that residential contractors provide to homeowners.
What is the statutory warranty? Builders and remodeling contractors provide a ten-year warranty to homeowners that says the home will be "free from major construction defects due to noncompliance with building standards" for ten years, starting from the date the first homeowner occupied the home. (Builders also provide one- and two- year warranties which are not discussed here).
Moisture intrusion and mold claims fall under this warranty. When moisture gets behind the siding (either stucco, stone, vinyl, or wood), it damages the sheathing and framing beneath. The sheathing and framing constitute part of the home's structure. As part of the home's structure, the sheathing and framing are considered "load-bearing" portions of the home. If the load-bearing portion is affected, there is a major construction defect under the warranty statute.
What are the changes?
1. Corporate Dissolution No Longer Affects Warranty Claims
Under the old law, a builder could dissolve the corporate entity and escape its obligations under the warranty statute.
GOOD NEWS! The new law takes away that loophole, and allows a homeowner to bring a statutory warranty claim, even if the builder has dissolved the corporation before the homeowner brings a claim.
2. Contractors Now Have the Right to Repair.
If a homeowner suspects water intrusion or other major construction defects within the ten-year warranty period, contractors now have the right to repair the damage and must be given the first opportunity to do so.
The homeowner must provide the builder with written notice of the damage or suspected damage within six months of the discovery of the moisture intrusion. The builder has 30 days following receipt of that written notice to contact the homeowner, inspect the property, and make an offer to repair. The homeowner may accept or reject the builder's offer. If the builder makes an offer to repair that is insufficient, the homeowner must reject it in writing. The homeowner must allow the builder 30 days to respond. If he does nothing, the homeowner is free to bring a claim.
PLEASE NOTE that strict time limits apply to bringing claims under the warranty statute, and it is important to contact an attorney to discuss the particulars of your situation.
Change in Timing of Claims against Subcontractors
Another important change in the law affects a homeowner's ability to bring claims against subcontractors who participated in the construction of their home, such as the subcontractor who applied the stucco, installed the windows, or installed the roof, or the company that manufactured the windows.
How much time do I have to bring a claim? In general, homeowners must discover the damage to the home within the 10 year warranty period. The homeowner has two years from that discovery date to file a claim against the contractor, essentially extending the time period to 12 years. If the homeowner does not discovery the damage within 10 years or file a lawsuit 2 years after the discovery, the claims are barred. Courts apply the statute of limitations strictly.
In the typical case, the homeowner makes a claim against the builder and the builder then brings claims against the subcontractors and the window manufacturer.
The Minnesota Supreme Court's June 2006 decision in Weston v. McWilliams made the 10 year deadline even more crucial for homeowners. In the Weston case, the Court held that subcontractors cannot be sued on residential warranty claims after the 10 year period. Thus, even though homeowners have another 2 years after discovery to sue the builder, as long as the claims are brought by the end of the 12th year, if they wait until after the 10 year period to bring a claim, the builder cannot bring any claims against the subcontractors.
Does this decision make sense? This sounds like an illogical result. Why can you sue builders for 2 years after the 10-year warranty period, but you cannot sue their subcontractors? Subcontractors are typically sued under a theory of "contribution and indemnity" - that is, if the builder is found liable for the homeowner's claims, the subcontractors must contribute to any judgment or award. The Supreme Court applied the statute of limitation strictly, and determined that the legislature intended for all causes of action, including contribution and indemnity claims, to accrue within the 10-year period. Its decision hinged on the statutory definition of "accrue." The conclusion was that all claims against subcontractors must be brought within the 10-year statute of limitations, or the claims are barred.
The only recourse for homeowners is to change the law to clarify that "contribution and indemnity" claims are permitted if brought within two years of the expiration of the 10 year warranty. It is likely that such legislation will be proposed in the 2006-2007 session. Until the law changes, however, the 10 year time period is absolute, and homeowners may NOT file claims against subcontractors more than 10 years after occupying the home.
What is the bottom line? If you suspect you have a problem with moisture intrusion in your home, DO NOT WAIT UNTIL THE END OF THE 10 YEARS to look into it. Allow yourself plenty of time (3 months is suggested) to investigate, retain an attorney, and file your claim before the end of the 10 year period.
PRESS RELEASE
For Immediate Release
Contact: Barbara Saunders Lutter, 651-452-6693
LEGISLATURE CONSIDERS BILLS WITH IMPORTANT IMPACT TO HOMEOWNERS
"Two bills with important implications for homeowners who have mold problems arecurrently being considered by the Minnesota Legislature," says Barbara Lutter, partner at Lehmann and Lutter. "The bills were both passed by the Senate Judiciary Committee in the last week of March and will go to the House Commerce Committee. Call, e-mail, or visit your legislators to show your support for the bills.
H.F. 3558/S.F.3234 - Corporate Dissolution Loophole
This bill closes the loophole in the law that currently allows builders to dissolve their corporations and escape their warranty obligations. The bill gives homeowners the full 10-year warranty protection, even if the builder dissolves.
H.F. 3559/S.F.3263, Attorney Fees Bill
This bill would allow homeowners who prevail in actions against their builders to recover their attorney fees.
Enclosed is a position paper summarizing the bills. To read the text of the bills and/or track their progress, log on to the Minnesota Legislature website at
www.senate.leg.state.mn.us or
www.house.leg.state.mn.us.
About Lehmann & Lutter
Lehmann & Lutter is an Eagan, Minnesota based law firm practicing in the areas of construction law and stucco litigation, business counsel, estate planning, family law, real estate, and employment law. The firm now has four attorneys and boasts almost 50 years of experience.
PRESS RELEASE
For Immediate Release
Contact: Barbara Saunders Lutter at (651) 452-6693 or barbara@lehmannlutter.com
CHILD SUPPORT LAWS IN MINNESOTA UNDERGO MAJOR OVERHAUL
Eagan, MN (March 13, 2006) - Starting January 1, 2007, there will be a new way to calculate child support in Minnesota. The new formula is designed to reflect a more modern family situation.
New child support orders will contain three separate amounts for each of the following: (1) basic support, (2) child care support, and (3) health care support.
Basic support is defined as the amount required for housing, food, clothing, transportation and education costs. There are tables to calculate basic support obligations based on both parents' gross monthly income and the number of joint children. For example, if both parents make a combined gross monthly income of $12,500 and have two children, the basic support amount is $2,588 according to the table. This is the most significant change in the new law. The court will now determine what amount is required to support the child using the combined income of both parents before determining who will owe what amount. The overall amount ordered will depend on each parent's share of the monthly combined income along with a few other factors.
Child care and health care obligations refer to the amount ordered for child care expenses and medical and dental expenses (be that a health care insurance plan or not).
After determining the above support amounts, there are various reasons that the overall figures could be increased or decreased. For example, if one parent receives social security or veteran's benefits on behalf of the child, then that amount is subtracted from the other parent's child support obligation. If court-ordered parenting time is more than 10%, the overall child support obligation will also be adjusted. If the parent or parents can't meet their own expenses after a presumptive child support obligation, there are adjustments that reflect that as well.
Another important aspect of the new law is that a one-time, six-month review is available after the final decree. In this six-month review, parties have the ability to make sure child support is current and whether both parties are complying with the parenting time provisions of the order without the burden of court motions and additional filing fees.
If you have any questions surrounding the new child support law or whether this new law might affect you, please contact Lehmann & Lutter, P.A. for assistance.
For a complete copy of the new bill:
http://www.revisor.leg.state.mn.us/bin/bldbill.php?bill=S0630.4&session=Is84
About Lehmann & Lutter
Lehmann & Lutter is an Eagan, Minnesota based law firm practicing in the areas of business counsel, estate planning, real estate, employment law, family law, and construction/stucco litigation. The firm now has four attorneys and boasts 40+ years of experience.
PRESS RELEASE
For Immediate Release
Contact: Barbara Saunders Lutter at (651) 452-6693 or barbara@lehmannlutter.com
NEW LAWS TAKE EFFECT IN MINNESOTA
Eagan, MN (January 1, 2006) - The following are some of the laws passed by the legislature in 2005 that became effective January 1, 2006.
Methamphetamine Disclosure
Beginning January 1, 2006, sellers must disclose to potential buyers of their property if they have knowledge that methamphetamine has been produced on the property. The Minnesota State Bar Association has created a "Methamphetamine Disclosure Statement" to comply with the new law.
Underage Drivers Prohibited from Using Cell Phones
Drivers under the age of 18 with learner's permits or provisional licenses are prohibited from talking on a handheld or hands-free cell phone while driving, except in emergencies.
Security Breaches of Consumer Personal Data
Beginning January 1, 2006, businesses must inform Minnesota residents of any security breaches of their personal information, including driver's license numbers, account numbers, credit card numbers, or Social Security numbers. Businesses must provide the disclosure "without unreasonable delay." If the security breach affects more than 500 people at one time, businesses must notify all consumer reporting agencies within 48 hours of the discovery.
Crib Safety Inspections at Day Care Centers
Beginning January 1, 2006, day care providers must maintain documentation and perform safety inspections on their cribs, to prevent injury and possible death of infants caused by unsafe baby cribs.
ATV Safety Course Required
Beginning January 1, 2006, anyone born after July 1, 1987 who is at least 16 years old must complete an independent study course offered by the Minnesota Department of Natural Resources before operating an ATV on public lands.
For more information about new laws taking effect on January 1, 2006, see the Minnesota House of Representatives web page at
www.house.mn.
About Lehmann & Lutter
Lehmann & Lutter is an Eagan, Minnesota based law firm practicing in the areas of business counsel, estate planning, real estate, employment law, family law, and construction/stucco litigation. The firm now has four attorneys and boasts 40+ years of experience.
