As in many other areas of law, the applicable statutes of limitation can serve as major obstacles to obtaining relief from construction defects in Minnesota. Depending on your circumstances, some or all of the following limitations periods may apply to claims in your case. Construction defect claims fall into four primary categories:
1. Statutory Warranty Claims for homes, condominiums, and townhome units under M.S.A. Section 327A.02 (2013) - Owners have 6 months to provide written notice of the defect to the builder once the defect is known or should be known, unless the owner establishes actual notice by other means. The statutory warranties for work last for one year for faulty workmanship and defective materials, two years for faulty installation of plumbing, electrical, heating, and cooling systems, and ten years for "major" construction defects. The owner must also commence a court action within two years of the date on which the owner knew of the defect or should have known, for a maximum of up to two years after the warranty termination date.
2. Express and implied warranty claims under the Minnesota Common Interest Ownership Act - On homes, condominium units, or townhome units, claims expire 6 years from the earlier of the transfer of title to the first purchaser or the time the purchaser takes possession of the unit (except for right to cancel and disclosure statement issues). On common elements (community buildings, lawns, drives, etc.) in a condominium or townhome community, claims expire 6 years from the later of:
(i) Completion of the common element;
(ii) The first unit sale; or
(iii) Termination of control by the declarant (anyone who creates the common interest community).
These time periods can be shortened by contract or the declarant to as little as 2 years.
3. General Negligence or Breach of Contract Claims for Construction Services - For general negligence, claims expire 2 years after an owner knew or should have known of the defect or discovery of the injury. For breach of a contract for construction services, claims expire 2 years after the builder fails to fulfill the warranty or breaches another condition or discovery of that failure. Both claims have a ten year limitation regardless of time of discovery or injury.
4. Fraud or Misrepresentation - 6 years after discovery of the facts constituting the misrepresentation.
A few more general principles to consider when calculating and evaluating Statutes of Limitation:
The clock typically starts when you “knew or should have known” of the defect. That is, when the damage starts to manifest, even if you don’t know the cause yet.
You may, or may not get a separate 2 year limitation period for each defect, or even for each location of the defect.
“Working with the builder” may, or may not toll (pause) the Statutes of Limitation.