A significant issue for homeowners and contractors alike is whether a construction defect is patent or latent. Which category the defect falls into will determine the time within which an action must be brought on the defect. Generally, this means a difference in years with latent defects enjoying a longer limitations period. For example, in California there is a four-year statute of limitations for patent defects, while the statute of limitations period for latent defects stretches to ten years.
A patent defect is one that is plainly evident or can be discovered upon an ordinary and reasonable inspection. Latent defects are essentially hidden defects. They are those that the owner does not know about and, through the exercise of reasonable care, would not be expected to discover. Generally, the statute of limitations for latent defects would run from the date of discovery or the date that the owner should have discovered the defect. However, to protect contractors from endless liability for their work on a construction project, states like California have placed an outside limit on actions for construction defects.
Oftentimes, the parties will argue over whether the defect was actually latent or on what date the homeowner knew or should have known of the defect. This becomes a question of fact with far-reaching ramifications because the limitations period would run based on the answer to the disputed questions. Though outside limitations for latent defects may be on the books in a state, the date of discovery may shorten this limitations period. So, as it is in California, even though there is a ten-year latent defect limitations period, a homeowner is nevertheless required to file his action within three years from the date of discovery or awareness of the latent defect.
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