Minnesota law imposes a short deadline to sue a contractor for construction defects, otherwise known as a statute of limitations. The applicable deadline depends on both the type of community where the home is located and the nature of the claim.
Deadline For Home Warranty Claims
Minnesota’s home warranty statute provides a one-year warranty for workmanship, a two-year warranty for systems (mechanical, electrical, HVAC), and a ten-year warranty against structural defects. The statute provides similar warranties for home remodeling work.
The warranty statute requires contractors to fix construction defects that occur during the warranty periods. If a contractor refuses to do so, a homeowner must sue the contractor for breaching the warranty. But the homeowner must sue the contractor within 2 years of when the contractor refuses to perform warranty work. Minn. Stat. § 541.051, Subd. 4. A warranty is breached when a contractor fails or refuses to honor its obligation to remedy a construction defect. Gomez v. David A. Williams Realty & Const., Inc., 740 N.W.2d 775, 782 (Minn. Ct. App. 2007) (“a cause of action for breach of statutory new-home warranties and express written warranties covering future performance accrues on discovery of the breach, which occurs when the homeowner discovers or should have discovered, the builder’s refusal or inability to ensure the home is free from major construction defects known to, or that should have been known to, the homeowner.”)
Minnesota’s statute of repose prohibits suing a contractor for most construction defects after between 10-12 years after the home is substantially completed. First, the statute provides that a claim can be asserted only for causes of action that “accrue” during the 10 years after the home is substantially completed. Minn. Stat. § 541.051, Subd. 1(a). The term “accrue” has different meanings depending on the type of claim. For the purpose of a claim under the home warranty statute, a cause of action accrues when a homeowner discovers that the builder will not honor its warranty obligations.
Regardless of when the breach of warranty is discovered, a homeowner cannot sue a contractor for a construction defect more than 12 years after their home is substantially completed. Minn. Stat. § 541.051, Subd. 2.
Deadline For Association Warranty Claims
Townhomes, condos and apartments are often part of common interest communities. Minnesota’s Common Interest Ownership Act (“MCIOA”) provides additional statutory warranties that govern common interest communities in Minnesota. A common interest community could be townhomes, apartments, or single-family homes. Whether a community is governed by MCIOA will be based on the language of the recorded declaration. MCIOA’s warranties are typically provided by the developer. See Minn. Stat. §515B.1-103(15) (defining “Declarant”).
A lawsuit for breach of the statutory warranties under MCIOA must be brought within six years after the cause of action accrues. Minn. Stat. § 515B.4-1152.
Claims regarding individual homes or apartment units accrue at the earlier of the time when the unit is sold to a purchaser or the time when the purchaser begins to possess the unit. Minn. Stat. § 515B.4-1152(c)(1). Claims regarding common elements accrue at the latest of (i) the time the common element is completed; (ii) the time the first interest in a unit is sold to a purchaser; or (iii) the termination of the declarant control period. Minn. Stat. § 515B.4-115(c)(2).
Deadline To Sue A Contractor For Non-Warranty Claims
Sometimes homeowners are not able to sue a contractor for breach of a statutory warranty. This may be the case because the defect is not covered by a statutory warranty, or because the claim is not against a “vendor” or “home improvement contractor” as defined under the statute. Non-warranty claims might include claims for negligence or breach of contract.
The deadlines for bringing claims under a breach of contract or negligence theory are the same as for claims for breach of the statutory home warranty, with one exception. Whereas breach of warranty claims accrue and must be brought within 2 years of the homeowner’s discovery of the breach of warranty, non-warranty claims accrue and must be brought within 2 years of the homeowner’s “discovery of the injury” to their home. Minn. Stat. § 541.051, Subd. 1(c).
The courts have ruled that “discovery of injury” does not require that the homeowner understand the nature or cause of the problem. A homeowner is deemed to have discovered an injury to the home if they notice a problem that should lead a reasonable homeowner to investigate further. For instance, the existence of cracking or excess condensation could constitute the discovery of an injury, even though the homeowner doesn’t know what is causing the problem.
Determining whether a claim falls within the statutory deadline to sue a contractor involves a complex factual and legal analysis. Any homeowner or contractor wondering whether a claim falls within the statutory deadlines should consult a Minnesota construction lawyer.
The information provided in this article is for informational purposes only, and does not constitute legal advice. Each situation is unique and the application of Minnesota law depends on the specific circumstances of each case.