There are a number of legal issues involved in home ownership. Over the next several weeks I will explore a few of them and how they impact home builders, home buyers, and home owners. I will explain the economic loss doctrine and how it affects anyone who builds a house. I will discuss remedies for home buyers who were led astray by realtors or sellers. Finally, I will survey liability issues for homeowners.
If you decide to build your home there are hundreds of decisions you need to make. The decisions you make at the outset will affect you for years to come. The lender you choose, the location of the house, and the builder. The choice of a builder will turn on a number of factors. Given recent Wisconsin laws, the contract offered by the builder should be a major consideration.
The contract between you and the builder will set out virtually all of your legal rights. This is true as between you and the builder, and between you and the subcontractors. Recent Wisconsin cases have clarified that a consumer is limited to the remedies in the general contract.
An example of why this is important happened in Linden v. Cascade Stone Co., Inc. 2005 WI 113. In that case, the consumer had stucco put on their home. They claimed it was put on improperly and caused water infiltration and mold. The consumer tried to sue the subcontractor who put on the stucco, and the supreme court dismissed the case. The court held that the consumer had remedies under the general contract, and the general contractor had remedies against the subcontractor.
The lesson from Linden is to understand your rights under the general contract. The builder will want to limit its exposure on the contract. The consumer will want as much protection as possible. Using the stucco example, the builder would prefer the contract to require only that the substandard stucco be repaired or replaced which is standard warranty language. The consumer would prefer that the cost of remediating the mold, the cost of the delay, and all other costs associated with the substandard stucco be paid by the general contractor.
If you are planning on building a home, look over the contract. Find out your rights before you sign on the dotted line. If you have questions about the terms of the contract contact kcarnell@lawtoncates.com or dgahnz@lawtoncates.com.