Arizona Statute of Repose Limits Claims for Construction Defects
Question: We purchased a new home in Fountain Hills in September 2010. We recently discovered that the stucco is falling off in some places, and that there are even holes in the stucco near the garage where we can see the insulation and wiring. After we complained to our homebuilder, they said that their homebuilder’s written warranty expired two years after we bought the home.
We then filed a claim with our homeowner’s insurance company, but they denied our claim because they said that a homebuilder’s warranty is for 8 years, not two years. Is there anything that we can do? Our concern is that the stucco on our entire home could be defective.
Answer: Under common law every homebuilder gives to a home buyer an implied warranty of good workmanship for a “reasonable time.” After an Arizona appellate court ruled that defective stucco discovered 12 years after the home had been built was a “reasonable time,” the Arizona legislature passed a statute of repose limiting to 8 years this implied warranty of good workmanship.
The Arizona legislature later passed a complex statutory program regarding these implied warranty claims. This program requires that the homeowner meet certain requirements, primarily the requirement to give the homebuilder the opportunity to repair the defect. The “bottom line” is that you should have until approximately September 2018 (8 years after the home was built) to file your claim for the defective stucco. If your homebuilder refuses to repair this defective stucco now, you should immediately contact an attorney.
Note: “A statute of repose … limits the time within which an action may be brought…. Unlike an ordinary statute of limitations which begins running upon accrual of the claim, the period contained in a statute of repose begins when a specific event occurs, regardless of whether a cause of action has accrued or whether any injury has resulted.” 54 C.J.S. Limitations of Actions § 4, at 20–21 (1987).
Here, the “specific event” is the building of the home. The exact beginning for the running period is typically the day that the Certificate of Occupancy is issued for the home, and is never later than the date that the home was sold to the original buyer. Subsequent buyers are generally also afforded eight years from when the home was built.
Note2: If a construction defect is discovered in the eighth and final year allowable under the Arizona statute of repose, the claim may be filed with a court up to one year after the date of discovery.