#59: New Hampshire’s “Right to Repair” Law
Like many states, New Hampshire has a so-called “right to repair” statute for residential construction defect cases. Found in RSA 359-G, it is intended to provide a period of time before a homeowner commences a lawsuit for the parties to attempt an out-of-court resolution, by giving the contractor a crack at making things right. But our statute has far less teeth than many other states' statutes. Here's how it works:
First, with the purchase and sales agreement or written contract for construction the contractor is supposed to give a written notice advising the homeowner of the statutory requirement for opportunity to repair defects. The penalty for failure to provide this notice? NONE. (In some states, the contractor loses his statutory opportunity to repair.)
Next, if the homeowner believes there has been defective work, before suing he or she is supposed to detail the problems in writing to the contractor. The penalty for failure to provide this notice prior to suit? Up to a 60-day “stay” of the lawsuit at the request of the contractor. (In some states the penalty is outright dismissal of the lawsuit.)
Next, within 30 days of receiving the homeowner notice of defects, the contractor may either (a) offer to settle the claim by monetary payment, the making of repairs, or a combination of both, without inspection; (b) propose to inspect the residence first; or (c) completely reject the claim (in which case the homeowner can sue immediately). If the contractor chooses (b) and gives notice that he wishes to inspect the premises before committing to anything, must the homeowner allow the inspection? Interestingly, the statute says that “homeowners are encouraged, but not required, to provide access for an inspection.” The penalty for not allowing one? NONE. (In some states, refusing the inspection bars a later suit entirely.)
If the contractor offers to make repairs (either initially or after an allowed inspection) and the homeowner accepts the offer, either the contractor will perform within the time frame agreed upon, or he won't. If he does perform, problem solved; no need for a lawsuit. If he doesn't, the homeowner can sue either for the original defects or for breach of the settlement agreement.
Unlike some states which give the contractor an absolute right to repair, in New Hampshire a homeowner can simply reject the contractor's settlement offer and file a lawsuit. At that point the statute threatens a mild penalty: if the homeowner doesn't win a judgment for more than the value of the repair offer, he must pay the contractor's “costs” (which do not include attorneys' fees) incurred in the lawsuit. If the homeowner wins nothing, obviously any repair offer was more valuable (but in that case, the contractor would be awarded his costs anyway as the prevailing party). But if the homeowner wins a judgment – presumably based on the cost of particular repairs – how does the contractor prove that the value of his repair offer exceeded the amount of that judgment? Surely he won't have testified that the homeowner's claimed damages were too low! And if the judgment is for the exact same repairs that the contractor offered to make, using the judgment to establish their value automatically means both figures will be exactly equal, and the contractor won't get his costs. This diminishes the sting of the “penalty.”
Perhaps the best feature of the statute is its list of things that a residential contractor will not be liable for: (a) normal shrinkage from drying or settlement; (b) reliance on information from the government or on building codes then in effect; (d) defects disclosed to the homeowner prior to purchase or that the homeowner should have discovered when buying the residence from a prior owner; (e) warranty items that the contractor tried to but wasn't allowed to address; (f) normal wear and tear; (g) items on which the homeowner did not perform normal and reasonable maintenance; (h) items that were altered by the homeowner. It is useful to have such a concise statement of contractor defenses, for both sides' benefit.