1 Year Warranty Period vs 10 Year Statute of Repose



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    Michael Ermann

    Jasmine, let's answer your question by asking another one. .. . .

    A homeless shelter hired a contractor to build a ground-up net-zero photovoltaic-powered homeless dormitory through the standard design-bid-build contract set. Sixteen months after substantial completion (ten months after final completion) the inverter came off its mounting when the maintenance person was cleaning it and accidentally knocked it, sending the inverter falling to the ground and damaging the inverter. Which of the following offers the best course of action for the owner?

    For the contractor to fix the inverter, the burden of proof is on the owner to prove that the installation was defective

    For the contractor to refuse to fix the inverter, the burden of proof is on the contractor to prove that the installation was not defective

    It is beyond the warranty period and the contractor is under no obligation to fix the inverter

    . . . scroll down for the answer





















    A: For the contractor to fix the inverter, the burden of proof is on the owner to prove that the installation was defective



    Both the correction of work period and the warranty begin at substantial completion (the certificate of occupancy has been issued and the building is fit to be occupied for its intended use, even if the punch list items haven’t been yet resolved).

    Correction of work period: until one year after substantial completion. The burden of proof is on the contractor. . . so almost for sure, the contractor would have had to fix the problem for free. But since we are 16 months past substantial completion, we are outside of the correction of work period.

    Warranty period: varies by state, but the contract default is 10 years past the substantial completion date. For years one through 10, the contractor is within his rights to refuse to fix the work. . . and the burden of proof is on the owner. I suspect that, absent a faulty mounting design by the architect or engineer, and absent a clumsy remount by a shelter employee, the inverter should not fall off after only 16 months. . . if the contractor refused, and the owner filed a claim, the contractor would likely lose and have to come out and fix the problem for free.

    As part of project close-out, the contractor hands off a manual of equipment serial numbers and warranties to the owner for posterity—and there may be a warranty for the inverter or inverter mount that the owner could take advantage of in that binder.

    We’d hope that the contractor would fix the issue for the shelter, especially since the mounting likely wasn’t sufficiently installed the first time, but the owner may theoretically have to pay out-of-pocket to fix the problem if he can’t prove a faulty installation (again, which seems like an easy thing to prove here).

    What’s an inverter? Photovoltaic panels—the type of roof solar that produces electricity—generate direct (DC) current. To tie into the electricity grid, and to power just about every piece of equipment we use in a building, we’ll need to switch that power to alternating (AC) current. The inverter, a piece of electronic equipment that mounts on the wall, switches the DC solar panel current to AC grid-compliant current. If you’re curious, click <<here>> to see what they look like.

    Jasmine, as far as the question you referenced in your original post, you'll want to recognize the difference between the one year "Correction of Work" period (what you called the "warranty") where the contractor must fix it or prove that he shouldn't have to. . . and the "warranty" period (what you called the "statute of repose") for years two through ten where the owner must prove that the contractor erred and the contractor has far more rights to refuse and cause the owner a headache. Obviously, in your example question, we'd want to fix the shaft when the owner holds the negotiation power and the burden of proof falls on the contractor---which is to say, we'd want to fix it in the first year. Plus, we don't want to leave an elevator shaft unvented for any longer than needed. The venting requirement allows smoke to escape once it enters the hoistway and if there was a fire sometime soon, we don't want that smoke in the hoistway with nowhere to go other than inside the top floor of the building.

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    Jasmine McNeil

    thanks so much for the detailed response - this was helpful.

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