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Thursday, January 7, 2016

Five Things Contractors Should Know About the Notice & Opportunity to Repair Act

Five Things Every Contractor Should Know About the Notice & Opportunity to Repair Act (NORA)

By: John Avondet, Esquire

This publication is intended to notify readers of developments in the law. It should not be construed as legal advice or opinion on any facts or circumstances, nor should it be construed as insurance brokering advice on any facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you may have.

The Idaho legislature enacted the Notice & Opportunity to Repair Act (NORA)* in 2003. NORA had the full blessing of the Idaho Building Contractors Association and IBCA specifically recommended the law as a way to reduce the number of lawsuits filed against contractors. Though it is unclear whether NORA has accomplished this goal of reducing lawsuits filed against contractors, every construction defect lawsuit involving a home involves NORA. The following are five things every contractor should know about NORA and how it might affect legal rights.

1.     Residences only, please.

NORA exclusively applies to construction defects in the construction of residences. NORA defines residence as a “single-family house, duplex, triplex, quadraplex, condominium or unit in a multiunit residential structure in which title to each individual unit is transferred to the owner under a cooperative system.” This does not only mean new construction but also applies to substantial remodels of existing residences. The Idaho Supreme Court** has ruled that NORA does not apply to construction defects in a detached shop built on the same property as the residence. So, NORA may affect only some of your rights and obligations in a given project where more than one building was built on the premises. The quick test for NORA’s application is if people can live there, then it’s probably a residence and NORA applies.

2.     Don’t expect details.

NORA only requires a homeowner to provide notice of a construction defect in “reasonable detail sufficient to determine the general nature of the defect” and nothing more. The statute does not define reasonable detail but the courts have construed NORA’s language as not requiring excessive particularity. The Idaho Supreme Court explained that most homeowners won’t know the technical nature of the defects. As long as the homeowner gives some description of the general nature and location of the defect, then the homeowner has provided notice under the law. NORA only applies to claims of defects in construction. It does not apply to allegations that a contractor failed to perform under a construction contract.

3.     Timing matters.

Once a homeowner has provided notice to the contractor of the nature and location of the defect, the clock is ticking for the contractor. The homeowner cannot file a lawsuit until at least twenty-one (21) days after serving the contractor with notice of the defect. If the contractor does not respond within twenty-one days, then the homeowner may file a lawsuit on the twenty-second day. So, even if things are busy and chaotic, which often happens in the construction industry, respond to the homeowner if only to buy more time to evaluate options or negotiate a resolution.

4.     Write it down.

Any response to a homeowner should be in writing. Oral responses to notices are not enough. NORA requires a written response to the initial claim. The contractor’s written response should address one of three things: (1) propose an inspection of the property and state a deadline to complete the inspection; (2) offer to compromise and settle the claim without inspection; or, (3) dispute the claim and state that the contractor does not want to inspect and will not compromise the claim. Any other response constitutes a failure to meet NORA’s requirements and will entitle the homeowner to proceed with filing a lawsuit irrespective of any additional provisions found in NORA.

5.     It’s about the money.

There’s a daily cost to doing business and litigation will affect a contractor’s ability make a living. NORA specifically outlines the damages a homeowner may recover in a lawsuit. The law allows for a homeowner to recover reasonable and necessary attorney’s fees. This is not reciprocal for the contractor. Unless there is a contractual provision or other applicable statute providing for the recovery of attorney’s fees between the contractor and the homeowner, the contractor will be unable to recover its attorney fees against the homeowner. This is a powerful arrow in the homeowner’s quiver that should not be underestimated by the contractor when weighing options about whether the compromise, inspect, or refuse to remedy any claimed defects.

 If you’ve received a letter from a dissatisfied customer claiming construction defects, do not hesitate to contact an attorney for consultation. As noted, timing matters once you’ve received a notice from a homeowner claiming a construction defect. 

*NORA is found in the Idaho Code at §§ 6-2501 through 2504.

**As of the time of writing this article, the only Idaho Supreme Court case interpreting NORA is Mendenhall v. Aldous, 146 Idaho 434 (2008).

John Avondet at 5:08 PM No Comments | Post a Comment
Construction, Business Law