Oregon and Washington have different approaches to construction defect cases. One of the biggest differences between the two states is that in Oregon, the owner of a building can sue any contractor or design professional that worked on the building. The owner does not have to be in contractual privity with such a contractor or design professional.
For example, the third owner of a home in Oregon can sue the original contractor that built the home, if there are construction defects. The new owner can even sue just the roofer, or the siding installer, even if the new owner had no contract or relationship with any of them. Similarly, if a new owner takes possession of an apartment or a hotel and discovers construction defects, the new owner can sue the original designer or contractor or subcontractor for the damages resulting from the construction defect even if the new owner has had no relationship at all to those original contractors.
There are a few principal caveats in this legal landscape.
The first of these caveats is that there is that “statute of repose” that imposes an outer limit on any construction defect lawsuit. That statute of repose mandates that a claim is lost forever if not brought within a certain amount of time from the construction. That is either a six-year limit or a 10-year limit (depending on the type of building). For contractors and design professionals, the statute of repose offers a limit to the potential liability arising from construction. The contractor or design professionals involved in construction can generally rest easy after the statute of repose has run out. For owners, the statute of repose can be a real trap if the defects are not discovered in time.
Another important thing to keep in mind about this, is that even if a construction defect claim is within the “statute of repose,” there is a shorter statute of limitations at play within the greater universe of the statute of repose. An owner that does not have a contract or relationship with the targeted contractor has to allege a negligent construction claim. A negligent construction claim has a pretty short two-year limit (and it is always subject as well to that statute of repose limitation). The two-year limit for a negligence claim starts to run upon “discovery” of the claim. This “discovery” rule includes a “should have been discovered” standard as well. An owner faced with clues and hints about construction defects should take action since the clock might be ticking on the two-year negligence claim, and the clock is definitely ticking on the overall statute of repose limitation.
To provide an example of this, the second owner of a home discovers construction defects and damage to the home arising from original construction. The home is seven years old. The owner now has two years to bring the negligent construction claim. For another example, that second owner of a home discovers construction defects and damage to the home. But in this example, the home is nine years old. The owner now has only one year to bring the negligent construction claim, or the claim will be completely barred by the statute of repose.
A note about negligence claims for owners who do not have a contract. The owner with a construction defect negligence claim is entitled to seek repair cost damages and related damages such as lost use damages, incidental costs, diminution in value, and other categories of direct damages. But, there is no legal mechanism in a typical negligence claim for the owner to ask for the recovery of attorneys’ fees spent on the lawsuit (unless the claim is brought under ORS 20.080 for claims of $10,000 or less).
This posting does not constitute legal advice to anyone, regarding any matter. The statute of limitations and repose analysis on any given matter is complicated and requires analysis from a retained attorney.