In Mississippi, foundation damage (whether to a home or commercial building) is fairly common. It is often caused by a certain soil called “Yazoo clay.”
The clay’s composition is such that it expands significantly when wet and, conversely, shrinks significantly when dry.
For example, when wet, Yazoo clay can expand to the point that it is generating 25,000 pounds of pressure per square foot!
Yazoo clay is particularly present in central Mississippi, but there are other, similar, clay formations throughout Mississippi.
Anything built directly over these expansive clays can be damaged by its expansion and shrinking. But, the most costly damage is often foundation damage.
When a property owner suffers foundation damage, one of the first questions that arises is whether the builder has legal responsibility for the repairs.
In this post, we will address that question.
The common law remedy
The phrase “common law” refers to law made over the years (and often over the centuries) by courts, as opposed to statutes adopted by the legislature.
In Mississippi, a builder has a legal duty to owes a duty to construct a home in a workmanlike manner and to construct a home which is suitable for habitation.
Long ago, the Mississippi Supreme Court recognized that the duty requires a builder to inspect for, and take into account, the presence of Yazoo clay.
This duty can easily be extended to commercial buildings as well.
A builder that fails to do so has breached his duty and can be held liable for resulting damage to the foundation.
New Home Warranty Act
This Act is a series of statutes adopted by the Mississippi Legislature. As the name indicates, it applies to new homes and, therefore, does not apply to commercial construction.
Under the Act, and automatically as a matter of law, the builder of a new home gives a warranty that for “six (6) years following the completion date, the home will be free from major structural defects due to noncompliance with the building standards.”
First, the warranty extends for only six (6) years.
Second, the major structural defects must be the result of noncompliance with building standards.
In other words, it is not an absolute warranty that no defects will occur. The defects must be due to the builder’s noncompliance with the applicable building standards.
Third, the warranty automatically extends to subsequent buyers of the house (but is still limited to a total of six (6) years, regardless of the number of owners).
Matters of contract
A builder who undertakes to construct a building for someone in particular may very well have entered into a contract with that person.
If the contract addressed (directly or indirectly) the construction of a foundation, the builder might be liable under a traditional theory of breach of contract.
Statutes of limitation
As stated above, under the New Home Warranty Act, the warranty extends for six (6) years. If the builder does not give notice of the existence of the warranty to a buyer, the warranty extends until the builder does so.
With respect to a common law claim for breach of the duty to build in a workmanlike manner, as well as a claim for breach of contract, the statute of limitation is three (3) years. If the breach was one not readily ascertainable by the buyer, it may be possible to extend the time.
S. Craig Panter
Panter Law Firm, PLLC, 7736 Old Canton Road, Suite B, Madison, MS 39110