Thursday, February 4, 2010

Changes in Minnesota Construction Contracts

Every contractor who builds, repairs or remodels homes or apartments in Minnesota knows about One, Two, Ten.

One: Contractors have to provide at least a one year warranty on materials and workmanship.

Two: Plumbing, electrical and HVAC work require a two-year warranty.

Ten: Any "major construction defect" is covered for ten years.

All this is courtesy of the Housing Statutory Warranties Act, Minnesota Statutes § 327A.01 to 08. Nearly all residential construction, repair and improvement work is covered, whether a home, an apartment or a condominium. Install roofing, siding or flooring, a window or a door and you've written a one year warranty. Install a water heater, a furnace or a lighting fixture and your warranty runs for two years. On new construction, room additions and conversions, your warranty runs for ten years.

Both the first owner and later owners are covered by the warranty. After being notified of a claim, a contractor has 30 days to do an inspection and make an offer to repair. A contractor who refuses to make good on the warranty will be liable for the cost of repairs and can be found in contempt of court.

Changes
Minnesota's One, Two, Ten law changed in August 2009. Governor Pawlenty signed a bill that affects every home construction and home improvement contract in the state. Minnesota's statutory warranty now has to be written into your contract – three paragraphs of very precise language – one warranty for new construction and a different warranty for repair or home improvement work. A copy of the warranty has to be left with the property owner.

Omit the warranty from a contract and you've got trouble: On new construction, leaving the warranty out is considered a false statement and makes the contractor liable for a fine up to $10,000. Leaving the warranty out of a repair or home improvement contract can draw an invitation to discuss your license with the CCLD (Construction Codes and Licensing Division).

Minnesota's statutory warranty law has a few exceptions. For example, yard improvements such as walkways, walls and fences don't require a written warranty. The warranty can't be waived. But there are options if you offer protection underwritten by a Minnesota home warranty company.

A breach of warranty is anything that doesn't comply with Minnesota's building code (the IRC). That's a curious definition. The building code says almost nothing about cosmetic defects or how long materials have to last or water leakage. Those and other performance issues are the most common construction defects. The IRC is concerned primarily with selection of materials and safety, not durability and habitability. Warranty law in most states is based on consumer expectations. Not so in the Gopher State.

If your custom home and home improvement contracts need revision, Construction-Contract.net has a good selection of Minnesota construction contracts that comply with the new law. All are available by download in PDF format at no charge.

If you're serious about drafting construction contracts that comply with Minnesota law, I can recommend another site.

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