Since the legislature passed the “Right to Cure” Statute, Indiana’s residential construction professionals have a significant tool to utilize. The Statute allows residential construction professionals, including architects, builders, suppliers, contractors, subcontractors and engineers, among others, to recover their attorney fees if a homeowner files an unreasonable claim against the construction professional. Ind. Code 32-27-3-1 et. seq.
In order to obtain this right, the construction professional must provide the homeowner with notice of the potential application of the Statute at the time of contracting. This notice explains to homeowners that homeowners are required to provide the construction professional with notice of any alleged defects in the work, and with an opportunity to resolve those defects, prior to filing a lawsuit against the construction professional.
Once the construction professional receives a notice of defect(s), the construction professional has 60 days to 1) propose repairs to resolve the defect, 2) offer to pay money to resolve the defect, or 3) deny the existence of the defect. Upon receipt of notice of the construction professional’s intended course of action, the homeowner can either accept the proposed resolution or file suit. However, if the homeowner is unreasonable in refusing to accept the construction professional’s proposal, the construction professional is entitled to recover attorney fees and costs in defending against the lawsuit. A homeowner who files a lawsuit must file with the court, and serve on the constructive professional, a list of all known construction defects, providing a description of the construction that the homeowner claims is defective, and specifying (to the extent known to the homeowner) the construction professional who the homeowner claims is responsible for each claimed defect. If the homeowner has not provided notice of the defects as required by the Statute, the lawsuit must be dismissed.
Finally, even after a lawsuit has been filed based on a rejection of the construction professional’s offer to cure, the Statute requires the homeowner to specifically list all known defects that form the basis for the lawsuit. Together, these protections provide construction professionals with significant tools to combat unnecessary lawsuits and streamline those lawsuits that ultimately are filed.
However, in return for these protections afforded to construction professionals, homeowners are entitled to recover their own attorney fees if the construction professional 1) unreasonably disputes the homeowner’s claim, 2) fails to remedy or compromise and settle the claim, 3) fails to repair the defect within a reasonable time, or 4) fails to respond to the notice required by the Statute. Most importantly, the homeowner is not required to accept an offer to repair the defect when the defect is caused by the construction professional’s noncompliance with applicable building codes. Thus, maintenance of the relationship with the homeowner and meticulous compliance with the requirements of building codes remain critical, despite the Right to Cure Statute.
The Right to Cure Statute expressly sets forth the form of notice that the construction professional must provide to the homeowner in order to trigger the protections of the Statute. The Right to Cure Statute allows inclusion of this notice within the text of construction contracts itself.
With appropriate contract documents and an understanding of the Statute – coupled with building code compliance and good relations with the homeowner — the diligent construction professional finds some measure of protection from unreasonable homeowner claims.