Summary of Hawaii’s Construction Defect Laws
Legal Duties of Your Builder
In Hawaii claims against the builder generally include breach of contract, breach of express warranty, breach of implied warranty and negligence and depending on the circumstances of the claim, potentially a violation the unfair methods and deceptive practices act, often referred to as UDAP. It is well established that a builder owes a duty of care to owners to not construct a building in a defective manner. The contractor must obtain building permits and then construct the building in strict accordance with the approved plans, as well as applicable building codes. This duty extends to original purchasers, subsequent purchasers and AOAOs.
Building Code, It’s the Law
The Building Code…it’s the law. Everyone refers to the building code and the builder must understand it’s not a guide book or manual. The code specifically provides that it is unlawful to construct or build in violation of the code.
Modern Building Codes
Building Codes have adopted over the years and in the recent past were predicated upon similar but different model building codes enacted in various geographical regions of the country. The code that Hawaii generally followed was based on modifications to the Uniform Building Code (UBC), which was utilized by most Western States and promulgated out of Whittier, California. The last UBC was published in 1997 and thereafter the code committees merged to form one set of relatively uniform codes throughout the United States. The resulting model code is now denominated as the International Building Code (IBC) and International Residential Code (IRC) in addition there are uniform codes for engineering, published by the ASCE (American Society of Civil Engineers) and code for specialty items such as the plumbing code, the mechanical code, the electrical code and the fire code amongst others. Hawaii has adopted versions of virtually all of these codes and now had predominately implemented the IBC and IRC.
The Hawaii Building Code
The building code is quite clear, and places ultimate responsibility on to developer and the general contractor to conform to code. While specific building codes may vary in limited extents from Island to Island. The core provisions of the code are essentially identical. The City/County cannot adopt a code which is less stringent that the state adopted code.
Certain provisions in all codes are sacrosanct.
- Approval of plans not in conformity with the code is not an authorization to violate the code.
- The sign-off on building inspections where there are deviations from the code is not an authorization to violate the code.
- The issuance of a certificate of occupancy (COO) is not an approval to violate the code.
The code is the law and must be followed.
What if the Builder Claims the Building Department Approved a Code Deviation?
The code has a very precise and strict procedure to follow if an aspect of the proposed construction does not conform to the code. The building official may allow deviations if the change is shown, based upon testing and evidence that the modification is an equivalent, to the code provision and provides at least the code level of protection.<br.
This evidence and approval must be in writing and noted in the project file.
Note…it’s almost never done.
When the Builder Breaches its Duties
If the builder fails to perform the work as promised in a contract, fails to conform to approved plans and codes, or breaches the duty of care owed to owners, Hawaii permits an owner to file a suit whether it be a ligation in court or arbitration against the builder for damages. This is proceeded by appropriate notice to the builder, an opportunity to repair which is rarely properly accomplished. Often, purchase contracts and Association governing documents provide specific written warranties. The operative documents must be reviewed to determine the relative rights and obligations of the parties.
The Damages You Can Recover
The reasonable Cost to Repair the defects and any property damage resulting there from:
- In appropriate cases the Relocation Costs occurred during the repair
- Costs for Temporary or Prior Repairs made due to the defects
- Depending upon the language of the warranty or other contract attorney fees and expert witness expenses may be recovered
Time Limits for Commencing a Legal Action: Statute of Limitations and Statute of Repose
There is a significant difference between Statute of Limitations and Statute of Repose. These concepts are often used interchangeably, and they are not.
A Statute of Limitations provides a specific period of time that each legal basis for a claim may be asserted. The Statute of Repose is an overall and absolute window with which a construction defect, other than an express warranty may be asserted.
Generally, the Statute of Limitations for a breach of contract. In Hawaii is 6 years. Note the builder’s guarantee or written warranty is deemed a contract. The Statute of Limitations for a negligence claim is times 2 years from when the defect was discovered, or in the exercise of reasonable diligence should have been discovered.
The trigger, or when the claims are measured from, is the date of the breach or when the owner knew or should have known in the exercise of reasonable diligence that damage has occurred.
If someone says all Construction Defect claims must be brought within 10 years, that’s generally true, but the actual measurement is calculated for each claim separately.
Sometimes running of the Statute of Limitations can somehow be suspended by intervening acts. The Statute of Repose cannot be stopped from running unless there is an express written agreement as to such and for only those parties signing the agreement.
The Determination of when the Statute of Repose commences is quite complex. Many people hold the belief that the Statute starts upon the sale of the house or building. Not so, the law specifically provides that the statute starts on the earliest of either the issuance of Certificate of Occupancy (COO), the date of Final building Department sign-off or the date of substantial completion of the building.
This latter aspect is quite fact driven. Using the first escrow close date as the start date of the Statute of Repose is a common and can be a costly mistake.
The Statute of Repose is as Follows
HRS § 657-8: “[n]o action to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of any deficiency or neglect in the planning, design, construction, supervision and administering of construction, and observation of construction relating to an improvement to real property shall be commenced more than two years after the cause of action accrued, but in any event not more than ten years after the date of completion of the improvement.”
The Statute of Limitations for a Breach of Contract, Including Breach of Expressed Warranty, Unless the Warranty is for a Shorter Period of Time
HRS § 657-1 (1): “actions for the recovery of any debt founded upon any contract, obligation, or liability, excepting such as are brought upon the judgment or decree of a court” shall be commenced within six years after the cause of action accrues.