No. Although many other Western States (Colorado, Nevada, Arizona, Montana, California) have enacted Right to Repair Acts, Utah has yet to enact such a requirement. However, House Bill 157 has been introduced which would require Homeowner Associations to first provide developers and opportunity to make repairs prior to filing a lawsuit.
Under Section 78B-2-225 (3) (a) of the Utah Code, an action by or against a provider (i.e., contractor) based in contract or warranty shall be commenced within six years after the date of completion of an improvement to real property. The date of completion is the earliest of a Certificate of Substantial Completion, a Certificate of Occupancy, or the date of first use of possession of the improvement.
Yes. The Utah legislature has codified breach of contract claims as applied to construction defect under Utah Code Section 78B-4-513:
(1) Except as provided in Subsection (2), an action for defective design or construction is limited to breach of contract, whether written or otherwise, including both express and implied warranties.
(2) An action for defective design or construction may include damage to other property or physical injury if the damage or injury is caused by the defective design or construction.
- Tort Claims: When a construction defect causes injury to property other than the construction itself.
- Intentional Tort Claims: When the contractor or designer willfully breached the duty to properly construction a structure with the applicable standard of care.
- Negligent Misrepresentation: When a residential home builder fails to disclose defects in construction they know or should know.
- Negligent or Strict Product Liability: When the contractor manufacturers and sells a product in a defective condition which made the product unreasonably dangerous.
Most contractors are aware that if they are performing work without an active Contractor’s License, under B&P § 7028(a) the performance of the work is a misdemeanor that can result in up to 6 months in jail time and a fine up to $5,000. Most contractors are also aware that under B&P §7031, if their license is suspended or inactive, they cannot bring an action to enforce the contract they have with the customer and cannot be compensated for the work performed.
Business and Professions Code Section 7028
(a) Unless exempted from this chapter, it is a misdemeanor for a person to engage in the business of, or act in the capacity of, a contractor within this state under either of the following conditions:
(1) The person is not licensed in accordance with this chapter.
Most contractors are also aware that under B&P §7031, if their license is suspended or inactive, they cannot bring an action to enforce the contract they have with the customer and cannot be compensated for the work performed. The license must be active at all times during the performance of the work.
Business and Professions Code Section 7031
(a) Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required by this chapter without alleging that he or she was a duly licensed contractor at all times during the performance of that act or contact regardless of the merits of the cause of action brought by the person…
(b) Except as provided in subdivision (e), a person who utilizes the services of an unlicensed contractor may bring an action in any court of competent jurisdiction in this state to recover all compensation paid to the unlicensed contractor for performance of any act or contract.
What many contractors are not aware of is that a simple thing of not having adequate workers compensation insurance will automatically suspend the contractor’s license under B&P § 7125.2, subjecting them to both B&P § 7028 and B&P § 7031. This typically comes into play when the small contractor claims “exempt” for workers compensation but then is paying day laborers for performing some work.
Business and Professions Code Section 7125.2
The failure of a licensee to obtain or maintain workers compensation insurance coverage, if required under this chapter, shall result in automatic suspension of the license by operation of law in accordance the provisions of this section…
Let me relate a construction case I was involved in recently in San Diego Superior Court to show how this worked.
The Client was an Owner of a small condo project that had hired a small contractor to perform some remodel work. During the course of construction, a dispute arose in which the Contractor made a claim for payment of a Change Order, while the Client claimed that the Contractor had delayed the construction. Through discovery, the Contractor provided cost records that showed he had paid small amounts to various day laborers at the early stages of construction for excavation work, i.e., John Doe – $200. A simple check of the Contractor’s license with the Contractors State License Board (CSLB) showed that the Contractor claimed exempt for Workers Compensation Insurance.
A Motion for Summary Judgement was then filed asserting that the Contractor’s license was suspended under B&P § 7125.2 once he hired a day laborer. The Judge granted the motion, dismissing all the claims by the contractor while still allowing all the claims by the Owner. In addition, the Contractor was required under B&P § 7031(b) to pay all moneys previously paid by the Owner to the Contractor.
This one little mistake by the Contractor of trying to save a few hundred dollars on Workers Compensation Insurance, ended up costing him tens of thousands of dollars, and subjected him to possible criminal prosecution. So, if you are an owner who has hired a small contractor to do improvement work on your property, make this one little check with the CSLB. If it shows “exempt” then watch to see who is working on your property. You just never know what the outcome will be.