By Katie Jeremiah
November 2011
Two years ago, one of my friends hired a contractor to freshen up the exterior of her 1970s ranch house. The contractor replaced the roof and the siding, and within a few months, the house looked like new. Happy customer, happy contractor.
That is, until last month.
With the arrival of the first autumn rain, my friend awoke to every homeowner's nightmare. Her ceiling light fixture had become a faucet draining water down onto her bed. Stepping out of bed, she found wet carpet at her feet. Behind her, she saw water seeping into the bedroom from behind the baseboard.
In her amateur investigation, she discovered that the water intrusion might have been caused by a defective gutter system — the roof drain was undersized and placed too high to collect the water from the roof. The water collected in the wrong place and eventually took the path of least resistance into the interior of the house.
That was when my phone rang. "What do I do next!?" she shrieked. She began to calm down when she realized there were steps she could take right away.
Here are a few helpful tips that I gave her to help her recover the cost of repair for damages:
- Mitigate the Problem. Take action to prevent further damage. If a water pipe is broken and flooding your house, shut off the water main. If electrical wiring is shorting out, shut off the breaker for the area. If water is leaking through the exterior structure, tarp the area and cover any personal belongings. Ventilate the area to prevent mold and mildew from further damaging your property.
- Take Pictures. Take pictures to document the problem. Make sure that you photograph what you believe to be the source of the problem, and photograph any resulting damage to the structure and personal belongings. Document the location of the damage and the date and time when you discovered the problem.
- Save Everything. Save any materials that have separated from the building. Those materials may be the key to identifying the source of the problem and recovering the cost of repair.
- Gather Important Documents and Contact Information. Locate your insurance policy and construction contract and contact information for your insurer and your contractor.
- Contact Your Attorney. Attorneys can provide advice regarding your rights under Oregon law, the construction contract, and the homeowner's insurance policy. They can help you avoid missing key deadlines and strict notice requirements. And, what is perhaps most important, they can help you effectively communicate with insurers and contractors so that you do not make a statement that could jeopardize your ability to recover the costs to repair the damage, and so that you can negotiate recovery of the cost to repair the damage or get the contractor to perform the repairs.
- Homeowner's Insurance. In most cases, your homeowner's insurance policy will exclude coverage for issues like this. Most policies exclude defects in design, workmanship, and materials. Such defects may include deficiencies in siding, slab leaks or cracks, and faulty electrical wiring, among a long list of other potential issues in your home. Your homeowner's insurance policy is the document that determines whether you have coverage that will compensate you for repairing the damage. Your attorney should become familiar with your policy and can advise you regarding the likelihood of coverage. If coverage is not specifically excluded, your attorney can advise you on how to effectively communicate with the insurer throughout the claims process in order to obtain a maximum payout under the policy. Your insurer cannot deny coverage without citing a specific exclusion in your policy. Attorneys who practice in this area should understand the nuances of the law and can help you push back on reluctant insurers.
- The Contractor. Oregon law requires residential contractors to provide a warranty against defects — the same defects that may be excluded in your homeowner's insurance policy. A common misconception is that the contractor's warranty is limited to one year. In fact, most warranties are good for six years from the date on which the work was substantially complete because a warranty is a contract, and Oregon's statute of limitations for bringing an action for breach of contract is six years. Most contractors depend on referrals for their business — and they know that the key to a referral is a happy customer. Because of this dynamic, your contractor may agree to repair the damage even if you are outside of the stated warranty. Make sure you consult with your attorney regarding this strategy, and avoid making statements to the contractor that could jeopardize your rights under the contract and under Oregon law. Discovering damage to your home is every homeowner's nightmare. But if you develop and execute an appropriate strategy that includes effectively communicating your rights under the contract and Oregon law with your insurer and contractor, the issue may be swiftly addressed and resolved without the expense of litigation.
