Reducing Liability When Building Net Zero
Homebuilders are accustomed to managing expectations. They do this at the initial client meeting, when drafting contract provisions, and in all progress meetings. As the project moves from design to occupancy, smart builders work hard to deliver the highest quality work possible while at the same time not promising more than they can deliver. Besides making for happier customers, this also helps minimize a builder’s liability.
Managing expectations is a bit more complicated when it comes to high-performance construction, as different homeowners will have different expectations about their home’s performance in regards to heating and cooling, moisture issues and indoor air quality. Those expectations may or may not be realistic, and the only way to make sure they are is to put them in writing and to have everyone sign off.
In fact, as an attorney who works with builders I always recommend a written, contractual warranty that defines exactly what the builder is and isn’t promising when it comes to home performance. Otherwise they’re at the mercy of implied warranties, which vary in coverage and term from state to state and can be open to interpretation.
And interpretation can cause big problems. When you market yourself as a high performance builder, you are positioning yourself as an expert, and as such you will likely be held to a higher standard. Homeowners who contract for a home with a high-performance building expert will expect a comfortable and secure structure built to more stringent specifications than a home built to minimum code standards. Some will assume you are promising everything from low energy bills to great air quality.
Take the issue of indoor air quality, a growing source of liability. We have seen builders sued for everything from serious problems like an aggravated asthma condition to minor ones like undefined odors. How do you minimize these problems? By implementing a warranty.
In many cases a court will give precedence to a contractual warranty. Even if it’s not as strict as the implied warranty, it is very helpful. This is an important piece of protection. You work hard to craft homes with a healthy indoor environment, but that environment has as much to do with how the homeowners operate the home after you deliver it, as it does with how you built it.
A contractual warranty can also