Right to Cure Law: Use It or Lose It

In 2005 the Wisconsin adopted the “Right to Cure Law” giving contractors a powerful tool to combat and resolve construction defect claims before a lawsuit is filed.  Many contractors still fail to take advantage of the benefits of this law by following its straightforward requirements.

At the time a construction or remodeling contract is entered into, the contractor simply needs to provide the homeowner with the Wisconsin Department of Commerce’s brochure (Wisconsin’s Framework for Successful Communications Between Consumers and Contractors) and provide the statutory notice (see copy of notice printed in brochure).

If the contractor follows those prerequisites, before a homeowner can file any lawsuit alleging construction defects the homeowner must give the contractor at least a 90 working days written notice of the specific defects and then follow a strict claim and response process.  Once the contractor receives a written notice of defects it has 15 working days (25 for window or door suppliers) to:

(1) make an offer to settle by correcting the defect,

(2) make a monetary payment,

(3) a combination of (1) and (2),

(4) reject the claim, or

(5) submit a proposal for inspection.

If the contractor chooses to inspect, the homeowner must provide reasonable access within 15 working days to perform any testing required to evaluate the claim.  After inspection the contractor has an opportunity to make an offer to settle with the homeowner.  If at any point a homeowner rejects an offer, the contractor may submit revised offers.  Only after the contractor exhausts its opportunity to offer to cure or otherwise settle the claim, is the homeowner permitted to bring a lawsuit.

While the homeowner still has the opportunity to reject offers of cure, the Right to Cure Law benefits a contractor in a number of ways.

• A homeowner’s failure to follow the timetable may result in delay or an outright dismissal of their lawsuit.  This is particularly important where a homeowner has repaired the work, thereby destroying all evidence of the defects.

•  The 90 working day notice period provides a long cooling off period for angry or emotionally invested homeowners.  It keeps the homeowner from hastily dragging a contractor into a costly and public lawsuit.  Also, it allows the contractor an opportunity to address the homeowner’s concerns or clear up any misunderstandings.

•  Contractors can inspect and perform testing.  This gives the contractor time to determine whether it is in fact responsible for the alleged defect. It is also an excellent opportunity for the contractor to document the work and gather evidence necessary to support its defense. Contractors may otherwise have difficulty getting access to the alleged defects or performing testing before a homeowner has the defect repaired.

•  Contractors can mitigate damages by offering to self-perform corrective work.  Homeowners who discover an alleged defect and who might otherwise hire someone to make repairs and then backcharge the contractor are prevented from doing so.  If the homeowner refuses to accept a contractor’s offer to self-perform the repair work, the contractor may have a good defense that the homeowner failed to mitigate damages and the contractor should not be liable for additional costs of repair.

Contractors would benefit from reviewing their contracting procedures to ensure that they are providing the requisite notice and the brochure to prospective clients and are preserving their rights under Wisconsin’s Right to Cure Law.

Brian R. Zimmerman is an attorney with Hurtado S.C., Counselors at Law, practicing in construction law.  For more information or specific questions feel free to contact Mr. Zimmerman at bzimmerman@hurtadosc.com or call 414-727-6250.