Insight When A Construction Job Goes South: A Summary of Idaho’s Notice and Opportunity to Repair Act

Few things bring more excitement than the thought of building a new home or remodeling a current home.  On the other hand, few things bring more thoughts of dread than a construction job gone south, the breakdown of the relationship between homeowner and contractor, and the endless money-pit (from the homeowner’s perspective) and difficulty getting paid for work performed (from the contractor’s perspective) that can result.

Both contractors and homeowners[1] (or prospective homeowners) embarking on residential construction projects in Idaho would benefit from being aware of Idaho’s Notice and Opportunity to Repair Act (NORA) (Idaho Code § 6-2503).  In basic terms, NORA requires: (1) that the homeowner provide the contractor with notice of the alleged construction defects; and (2) give the contractor an opportunity to repair the alleged construction defects prior to the homeowner initiating a lawsuit against the contractor.  The homeowner must comply with NORA in order to bring a lawsuit against a contractor.

The required notice to be sent by the homeowner to the contractor is called a “notice of claim.”  The notice of claim must describe the claimed defect with enough detail that the contractor can determine the general nature of the alleged construction defect.  Once the contractor receives the notice of claim, the contractor has 21 days to serve the homeowner with a written response.  In the written response, the contractor can do one of three things.  First, the contractor may offer to inspect the resident within a specified timeframe.  If the contractor goes this route, the written response must indicate to the homeowner that based on the inspection, the contractor will either offer to fix the alleged defect, settle the claim, or the dispute the claim.  Second, the contractor can simply offer to settle the claim with a monetary payment without inspection.   Third, the contractor can dispute the claim.

If the contractor disputes the claim or fails to respond to the notice of claim within 21 days, the homeowner can file a lawsuit against the contractor.  However, if the contractor offers to inspect the residence or offers to settle the claim without inspection, NORA has additional requirements.  The homeowner has 30 days from receipt of the contractor’s written response to consider the contractor’s offer to inspect or settle and issue a written notice of acceptance or rejection.  Once 30 days have elapsed, the contractor may withdraw the offer to inspect or settle by sending a written notice to the homeowner.  If the homeowner rejects the contractor’s offer to inspect or settle in writing, or if homeowner fails to respond within 30 days and the contractor withdraws the offer in writing, the homeowner may initiate a lawsuit against the contractor.

If the homeowner elects to accept the contractor’s offer to inspect the residence, the homeowner must provide the contractor reasonable access to the residence during normal working hours to perform the inspection.  Within 14 days of performing the inspection, the contractor must serve the homeowner with either: (1) a written offer to fix the defect at no cost to the homeowner (which must include a report of the scope of the inspection, the findings/results of the inspection, a description of the additional work necessary to fix the defect, and a timetable for completion); (2) a written monetary settlement offer; or (3) a written statement that the contractor will not fix the defect.

If the contractor fails to provide the homeowner with a post-inspection written response within 14 days of the inspection or refuses to fix the alleged defect, the homeowner may proceed with filing a lawsuit without further notice.  However, if the contractor does provide a post-inspection written offer to settle or fix the defect, the homeowner must serve the contractor with either a written notice of rejection or acceptance of the offer within 30 days of the offer’s receipt. Otherwise, the contractor can revoke the offer by written notice. If the homeowner rejects the contractor’s post-inspection offer to settle or fix the defect (or if that offer is revoked by the contractor) the homeowner may proceed with filing a lawsuit.  If the homeowner accepts the contractor’s offer to fix the defects on an agreed upon timetable (which NORA allows the parties to modify by written agreement) within 30 days of receipt of the offer, then the result is a happy ending that does not result in the filing of a lawsuit.

Whether the parties see NORA as a useful mechanism to facilitate pre-litigation settlement or merely as a procedural headache, both homeowners and contractors would do well to be familiar with its requirements, since the requirements are pre-requisites to filing a lawsuit.

[1] For ease of reference, this article uses the general terms “homeowner” and “contractor.” However, NORA applies to all “claimants” and “construction professionals” as those terms are defined in the statute.  Also, NORA applies only to residential construction projects.  Mendenhall v. Aldous, 146 Idaho 434, 437, 196 P.3d 352, 355 (2008).