While Oregon is but a stone’s throw away from Clark County, the laws governing the liability of home builders are extremely different. Homeowners, builders, Realtors and insurance agents should be aware of these vastly different standards.
In Washington, a home builder generally cannot be held liable for negligent construction – that is, construction performed below a “reasonable standard” – unless the defect causes personal injury to a person. The judges in Washington reason that parties to a construction contract are capable to negotiate their own building standards and assign the assumptions of risk between themselves.
A Washington homeowner may therefore only sue his or her builder if the builder breached the construction contract by not building to some agreed upon standard. This means claims of negligence will generally be thrown out of court.
Additionally, because the homeowner did not personally hire the builder, a buyer of a used home cannot sue the builder for defective construction, even if that builder breached the contract or built below a reasonable standard. This means that, for the most part, home builders in Washington can only be sued by their customers, and only if their work falls below the standards specified in the contract.
Contrast this to Oregon law. The Oregon Supreme Court affirmed an appellate court decision earlier this year that a non-original or subsequent buyer can sue the original builder under a negligence theory for defective construction. This means that, regardless of the number of times a home has been bought and sold, the original builder could still be “on the hook” in Oregon for defective construction. Also, builders in Oregon cannot escape this potential liability by inserting disclaimers in their construction contracts.
Homeowners and builders in both states have felt, or will feel, the impact of these rulings. In Washington, certain lawmakers during the past two legislative sessions have attempted but failed to pass legislation to overturn the court’s refusal to allow negligent construction claims. The opponents have defeated these efforts by showing that such a law would dramatically increase the cost of insurance, which in turn would further increase the cost of home ownership. Builders in Oregon will soon experience the effect of open-ended exposure to claims of negligent construction. One can certainly assume that efforts will be made to reduce the potential liability to builders.
Homeowners and builders who choose to do business in both states should understand that the laws affecting home construction are vastly different between Oregon and Washington. For instance, a homeowner should insist that the construction contract specify building standards. Likewise, Washington contractors need to understand the higher risk they will assume by choosing to extend their trade to Oregon.
Bradley Andersen is an attorney in the regional law firm Schwabe, Williamson & Wyatt, focusing his practice in the areas of commercial litigation, construction and land use permitting and development. He can be reached at 360-905-1431 or bandersen@schwabe.com.
