Iowa allows for various remedies regarding faulty construction jobs. In this article, we discuss frequently utilized claims, including:
- Negligence Claims
- Breach of Contract Claims
- Breach of Express Warranty Claims
- Breach of Implied Warranty Claims
- Misrepresentation and Fraud
We also discuss frequent defenses to construction defect claims in Iowa, including the:
- Statute of Limitations
- Statute of Repose
Negligence
Iowa allows negligence claims for defective construction. However, these claims are often limited by the economic loss doctrine. This doctrine essentially provides that a cause of action based on negligence does not accrue until the claimant discovers that they have actually suffered an injury or reasonably should have discovered it.
Breach of Contract
Breach of contract claims may be brought by parties to a construction contract; the homeowner against the general or subcontractor, or the general contractor against the subcontractor. Unlike negligence claims, the period begins to run as soon as the contract is breached, not once the breach has been discovered or the damage results.
Breach of Express Warranty
Construction contracts are typically contracts for services, not goods. Therefore, they are not governed by the Uniform Commercial Code (UCC). While the Iowa Supreme Court may apply article 2 of the UCC when common law does not provide sufficient direction, the common law and persuasive authority from other states are more often applied to each claim of breach of express warranty.
An express warranty is a contractual guarantee that a specific statement is true. Parties to a construction contract can create express warranties without using the word ‘warranty’. It only requires that the seller made some “distinct assertion of quality concerning the thing to be sold as distinguished from a mere statement of opinion or praise.” The plaintiff must show that the seller intended for the assertion to be believed and relied upon by the buyer, and that the buyer understood, believed and actually relied on the assertion.
Breach of Implied Warranty
Iowa case law also recognizes an implied warranty of good faith and habitability in construction contracts that extends to buyers of homes built by a builder-vendor. A builder-vendor is essentially a construction merchant, one who is in the business of building and selling homes. This warranty implies that “the building to be erected will be built in a reasonably good and workmanlike manner and that it will be reasonably fit for the intended purpose.” This warranty can also run both ways, from buyer to seller and seller to buyer.
Misrepresentation and Fraud
While these claims are very difficult to prove, Iowa allows for claims of negligent misrepresentation and fraudulent misrepresentation against general contractors. Negligent misrepresentation occurs when the contractor fails to exercise due care when handling sensitive information. Fraudulent misrepresentation occurs when the contractor knowingly made a material, false representation with the intent to deceive, and there was justifiable reliance on the representation that proximately caused damages. Plaintiffs who successfully prove fraudulent misrepresentation may recover actual damages and punitive damages.
Viable construction default claims must pass the test for the Statute of Limitations and the Statute of Repose to succeed. Thus, claims must be brought within a narrow window of time.
Statute of Limitations
The statute of limitations begins once a claim accrues and specifies the amount of time during which construction defect claims must be brought or they will be barred as a matter of law. Injuries to persons in Iowa typically carry a two-year general statute of limitations. However, claims founded on unwritten contracts, injuries to property or fraud carry a five-year statute of limitations period. Those founded on written contracts or for the recovery of real property are subject to a ten-year statute.
Statute of Repose
The Statute of Repose is a more recently amended doctrine affecting many types of construction defect claims. Effective July 1, 2017, the changes to this statute apply to claims on improvements to real property and sets the period of time during which claims related to defective improvements to real property must be brought after the work is performed. It provides for a ten-year time period for residential properties and an eight-year time period for all other properties. If the appropriate claims are not brought during this time period, they will be barred as a matter of law, similar to the statute of limitations.
One exception exists for fraudulent concealment. Claims related to fraudulent concealment must be made within fifteen years. Additionally, if the defective condition is discovered within one year of the expiration of the statute, the time period will be extended for an additional year. Any improvements not in existence before July 1, 2017 are subject to the previous version of the Statute of Repose.
To discuss whether you have a viable claim to construction defects in Iowa, contact an experienced attorney at O’Flaherty Law today. Call our office at (630) 324-6666 or schedule a consultation today.
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