Is it worth suing our builder?

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Is it worth suing our builder?

Aaron S.
Member since 2022 · 25 posts · 5 votes

We bought a new build in 2022, built by a local guy's LLC. We are outside of the standard build warranty, but are continuing to discover MAJOR corners cut, and getting repairs and pre-emptive fixes is costing us lot.

We are estimating $20,000 in total expenses that we are going out of pocket for due to poor workmanship. None of this was caught on the home inspection.

One example: we discovered a garage light not working. Inspecting revealed a water leak from the second floor, above the garage, that shorted the light. The cause of the leak is that when they built the shower, they tiled it incorrectly. Grout lines are paper thin, the tiles were not affixed properly and water has been going into the wall behind the shower for who knows how long. The sub floor was completely saturated. It cost us $3,000 to demo the shower and retile it. Restoration company, with a $500 deductible for home insurance, is drying and working on fixing tile that is water damaged, grout that has eroded, drywall that needs replaced, etc etc.

We have about a dozen examples of issues similar to this. Is it worth getting a real estate lawyer, sending a demand letter, going to small claims court, suing, or doing anything like that?

A contractor friend told me that it would not be worth it, and that we would likely never get that money back from the builder. A lost cause.

Thoughts?





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Robert EllisBusiness Member
Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
2y
Quote from @Aaron S.:

We bought a new build in 2022, built by a local guy's LLC. We are outside of the standard build warranty, but are continuing to discover MAJOR corners cut, and getting repairs and pre-emptive fixes is costing us lot.

We are estimating $20,000 in total expenses that we are going out of pocket for due to poor workmanship. None of this was caught on the home inspection.

One example: we discovered a garage light not working. Inspecting revealed a water leak from the second floor, above the garage, that shorted the light. The cause of the leak is that when they built the shower, they tiled it incorrectly. Grout lines are paper thin, the tiles were not affixed properly and water has been going into the wall behind the shower for who knows how long. The sub floor was completely saturated. It cost us $3,000 to demo the shower and retile it. Restoration company, with a $500 deductible for home insurance, is drying and working on fixing tile that is water damaged, grout that has eroded, drywall that needs replaced, etc etc.

We have about a dozen examples of issues similar to this. Is it worth getting a real estate lawyer, sending a demand letter, going to small claims court, suing, or doing anything like that?

A contractor friend told me that it would not be worth it, and that we would likely never get that money back from the builder. A lost cause.

Thoughts?






 where builders hurt is go to the city and talk to them and the attorney general and talk to the city too about the issues. what city and state is this? send me some and I'll help 

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  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    2y
    Quote from @Aaron S.:

    We bought a new build in 2022, built by a local guy's LLC. We are outside of the standard build warranty, but are continuing to discover MAJOR corners cut, and getting repairs and pre-emptive fixes is costing us lot.

    We are estimating $20,000 in total expenses that we are going out of pocket for due to poor workmanship. None of this was caught on the home inspection.

    One example: we discovered a garage light not working. Inspecting revealed a water leak from the second floor, above the garage, that shorted the light. The cause of the leak is that when they built the shower, they tiled it incorrectly. Grout lines are paper thin, the tiles were not affixed properly and water has been going into the wall behind the shower for who knows how long. The sub floor was completely saturated. It cost us $3,000 to demo the shower and retile it. Restoration company, with a $500 deductible for home insurance, is drying and working on fixing tile that is water damaged, grout that has eroded, drywall that needs replaced, etc etc.

    We have about a dozen examples of issues similar to this. Is it worth getting a real estate lawyer, sending a demand letter, going to small claims court, suing, or doing anything like that?

    A contractor friend told me that it would not be worth it, and that we would likely never get that money back from the builder. A lost cause.

    Thoughts?






     I'd see if you got a warranty. in all of our new builds we actually have the deal underwritten by an external builders risk policy by an insurance company as a smaller builder it hedges our risk and helps the customers be very happy. it's typically 0.5% of the purchase price. Did you get any kind of regular home warranty? did you give them a chance to address it? most the time homeowners do things themselves and it would have been better to contact them. If all their work was inspected and they got certificate of occupancy, I'd check your purchase contracts. they have subcontractors that should have workmanship warranties. we let the customer's contact them directly and let them know up front what to expect and what a 1 year workmanship warranty is. we don't do the drywall we hire reputable companies who do drywall and they are the ones who guarantee their bid. what market is this in? this is for columbus ohio

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y

    @Aaron S.

    Your friend is correct unless there was a warranty - and most warranties are for a year with exception of structural warranties that may be outlined by state law / building code.

    Sorry you have to endure this.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    2y

    cost to sue $10-15k

    Chances of winning 25%

    You decide if it is worth it to you.

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  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    2y
    Quote from @Aaron S.:

    We bought a new build in 2022, built by a local guy's LLC. We are outside of the standard build warranty, but are continuing to discover MAJOR corners cut, and getting repairs and pre-emptive fixes is costing us lot.

    We are estimating $20,000 in total expenses that we are going out of pocket for due to poor workmanship. None of this was caught on the home inspection.

    One example: we discovered a garage light not working. Inspecting revealed a water leak from the second floor, above the garage, that shorted the light. The cause of the leak is that when they built the shower, they tiled it incorrectly. Grout lines are paper thin, the tiles were not affixed properly and water has been going into the wall behind the shower for who knows how long. The sub floor was completely saturated. It cost us $3,000 to demo the shower and retile it. Restoration company, with a $500 deductible for home insurance, is drying and working on fixing tile that is water damaged, grout that has eroded, drywall that needs replaced, etc etc.

    We have about a dozen examples of issues similar to this. Is it worth getting a real estate lawyer, sending a demand letter, going to small claims court, suing, or doing anything like that?

    A contractor friend told me that it would not be worth it, and that we would likely never get that money back from the builder. A lost cause.

    Thoughts?






     where builders hurt is go to the city and talk to them and the attorney general and talk to the city too about the issues. what city and state is this? send me some and I'll help 

    [email protected]786-494-6766
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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    2y

    I was going to suggest the same thing as Robert. Go to the city.

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  • Aaron S.
    OP
    Member since 2022 · 25 posts · 5 votes
    2y

    We are in Tucson, AZ

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  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    2y
    Quote from @Aaron S.:

    We are in Tucson, AZ


     https://roc.az.gov/file-complaint

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  • John Mocker
    Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
    2y

    Aaron,

    If you have the info on who insured the Builder you could file a claim.  They will probably not cover redoing the poor workmanship but there may be some coverage for the ensuing damage (garage light repair).  

    If you do not have their Insurance info have your Insurance agent send the Builder a certified letter indicating that you be making a claim against their insurance for the damage.  Indicate that, if they do not inform the insurance carrier of this, they are jeopardizing their coverage as the Insurance company will find out when you file suit or your Insurance company goes against their company in subrogation.  If there are only a couple of Agents in your area you could call around to see who insures them and send their agent a copy of the certified letteer.

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  • Aaron S.
    OP
    Member since 2022 · 25 posts · 5 votes
    2y
    Quote from @John Mocker:

    Aaron,

    If you have the info on who insured the Builder you could file a claim.  They will probably not cover redoing the poor workmanship but there may be some coverage for the ensuing damage (garage light repair).  

    If you do not have their Insurance info have your Insurance agent send the Builder a certified letter indicating that you be making a claim against their insurance for the damage.  Indicate that, if they do not inform the insurance carrier of this, they are jeopardizing their coverage as the Insurance company will find out when you file suit or your Insurance company goes against their company in subrogation.  If there are only a couple of Agents in your area you could call around to see who insures them and send their agent a copy of the certified letteer.


     To be clear, I should ask for who his builder's insurance provider is?

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  • John Mocker
    Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
    2y

    The Builder should have "General Liability" (bodily injury & property damage liability).  If you used an architect they may have copies of the coverage.  Also, if the Builder had to pull permits from the town, they may have had to show proof of insurance and that may be on file.  Some towns only look for the the proof of Workers Compensation but if they filed proof, it may lead you to who their insurance agent is.

    The Builders Risk policy covered the property during construction for fire, theft, vandalism, etc. so it would not apply to these claims. 

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  • Aaron S.
    OP
    Member since 2022 · 25 posts · 5 votes
    2y
    Quote from @John Mocker:

    The Builder should have "General Liability" (bodily injury & property damage liability).  If you used an architect they may have copies of the coverage.  Also, if the Builder had to pull permits from the town, they may have had to show proof of insurance and that may be on file.  Some towns only look for the the proof of Workers Compensation but if they filed proof, it may lead you to who their insurance agent is.

    The Builders Risk policy covered the property during construction for fire, theft, vandalism, etc. so it would not apply to these claims. 


     Ok cool. I asked who his insurance provider was and he gave me a name. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y

    U have to look at your contract many have mandatory mediation so start there.

    then you have to look at the strength of the builder.  And it sounds like the tile guys would also be the ones you go after.. so normally you make a claim on the builder who then gets his tile sub in there to fix it..

    but if its a builder not active right now probably a tough thing to do.  And if the builders insurance is not current from what  I know there will be no insurance the insurance has to be active when the claim is made  @John Mocker  John i have been going round and round with my insurance guy on this one.  I have a policy that cost me 50k for 10 years then normal builders liability that cost me another 50k per year.. my agent is telling me that if I dont have current policy say 3 years down the line the 50k per year wont kick in because i dont have a current policy.. the 50k i spent on the 10 year is just basically for litigation defense.. your thoughts on the matter. ??  or how do I retire :)

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y

    also have you simply tried to contact the builder and make a request for repairs ??

    or are you just assuming they wont help you and you will need to litigate etc. 

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  • Aaron S.
    OP
    Member since 2022 · 25 posts · 5 votes
    2y
    Quote from @Jay Hinrichs:

    also have you simply tried to contact the builder and make a request for repairs ??

    or are you just assuming they wont help you and you will need to litigate etc. 

     I have not directly asked him to help pay for the repairs, no. He has been difficult to deal with in the past so I was presuming it would be pointless.

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  • John Mocker
    Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
    2y

    jay

    Without seeing the policies it sounds like the policy you have is on a "Claims Made Basis"  in that type of policy, the policy in force when the claim is made.  This differs from the more common "Occurrence basis" where the policy in force at the time the claim occurred, is the policy that responds.  With the Claims Made policies (often used in professional liability, products liability, etc.), when you end the coverage, you need to purchase extended reporting coverage (aka Tail coverage).  That allows you to submit claims that happened before the business shut down but were not reported to you until after.  

    PM me and we can speak offline about it.  

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Aaron S.:
    Quote from @Jay Hinrichs:

    also have you simply tried to contact the builder and make a request for repairs ??

    or are you just assuming they wont help you and you will need to litigate etc. 

     I have not directly asked him to help pay for the repairs, no. He has been difficult to deal with in the past so I was presuming it would be pointless.


    well ask first..  before you assume  anyone calls me with a leak like that I am on it post haste
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @John Mocker:

    jay

    Without seeing the policies it sounds like the policy you have is on a "Claims Made Basis"  in that type of policy, the policy in force when the claim is made.  This differs from the more common "Occurrence basis" where the policy in force at the time the claim occurred, is the policy that responds.  With the Claims Made policies (often used in professional liability, products liability, etc.), when you end the coverage, you need to purchase extended reporting coverage (aka Tail coverage).  That allows you to submit claims that happened before the business shut down but were not reported to you until after.  

    PM me and we can speak offline about it.  


    thank you spending almost 200k a year in insurance and then not getting covered is frustrating me
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  • Melanie P.Pro Member
    Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
    2y

     That was your mistake. Failing to give him the opportunity to assess and repair the damages nullifies any legal claim you may have had. Contact him about your other concerns BEFORE you repair them on your own and let us know if you need help addressing any of those. 

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  • Victor S.
    WorldWide · Member since 2016 · 1k+ posts · 1k+ votes
    2y
    Quote from @Melanie P.:

     That was your mistake. Failing to give him the opportunity to assess and repair the damages nullifies any legal claim you may have had. Contact him about your other concerns BEFORE you repair them on your own and let us know if you need help addressing any of those. 

     wut... OP said they're outside of the warranty period. Are they supposed to be waiting on the guy to do something about his shoddy work while their house is literally falling apart?
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  • Melanie P.Pro Member
    Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
    2y

     Yes, it's known as "having a backbone." When you take issue with someone's work y ou contact them, let them come inspect and (hopefully) attempt to correct the deficiency. You can't make alterations to the bathroom, send the builder invoices and tell him his grout work was bad. You've got to give him notice that you have an issue and allow him to correct it before all this nonsense talk about going legal

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