This comprehensive guide covers everything you need to know about construction defect claims, from understanding what qualifies as a defect, to common examples, adjuster roles, legal disclosure obligations, and procedures under Chapter 40 and Chapter 558.

Whether you’re a property owner, contractor, developer, or construction professional, this page will help you understand your legal rights and responsibilities. As a firm, we can also provide practical checklists, timelines, and guidance on the process.

What is a construction defect claim?

A construction defect claim is a legal action brought by a property owner, developer, or HOA against builders, contractors, or design professionals for faults in the construction process that result in damage or diminished value of a structure.

These defects may arise from poor workmanship, design flaws, or the use of substandard materials. Defects can be either:

Patent defects

Obvious flaws visible upon inspection (e.g., cracks, leaks).

Latent defects

Hidden issues that emerge over time (e.g., foundational settling, mold behind walls).

Claimants often seek compensation for repairs, loss of use, diminution in value, or related damages.

Construction defect claim examples

Examples of common construction defects include:

Structural issues

Faulty foundations, framing problems, roof collapse,

Water intrusion

Poor waterproofing, defective windows, or roofing.

Soil and grading issues

Leading to erosion or foundation movement.

Electrical and plumbing defects

Faulty wiring or inadequate drainage.

HVAC system malfunctions

Poor performance due to design or installation errors.

Building code violations

Non-compliance that creates hazards or fails inspection.

Knowing the type of defect is crucial to building a strong legal claim and determining liability.

Construction defect claims adjuster: What they do

A construction defect claims adjuster investigates the claim on behalf of the insurance company or liable party. Their duties include:

• Inspecting the property and identifying the defect
• Assessing the cause, scope, and extent of the damage
• Reviewing contracts, blueprints, inspection reports, and repair estimates
• Coordinating expert evaluations (e.g., engineers, architects)
• Determining insurance coverage and settlement offers

While adjusters work to resolve disputes, keep in mind that their duty is primarily to the insurer, not the claimant.

Construction defect claims disclosure

Many statesWisconsin requires sellers of real estate to disclose known construction defects before closing. This is a legal duty and failure to disclose can result in:

• Breach of contract claims
• Rescission of sale
• Allegations of fraud and misrepresentation

Construction defect claims handling: What to expect

The construction defect claims process typically involves:

• Investigation: identifying the defect and gathering documentation.
• Notice of claim: formal written notification to the responsible party
• Response and inspection: the builder, contractor, or seller is given a chance to inspect and propose repairs
• Negotiation or mediation: often required before or during litigation
• Litigation or arbitration: if the dispute cannot be resolved, litigation or arbitration may be necessary.

Bogus negligence construction defect claim: Red flags

While many claims are valid, some may be baseless or exaggerated. Signs of a dubious or bogus construction defect claim include:

• Lack of expert reports or documentation
• Claims filed outside of statute of limitations
• Allegations not matching the construction timeline
• Retaliatory claims (e.g., after a dispute)

Builders or sellers facing unfounded claims should immediately consult an attorney to mount a legal defense and potentially recover their legal fees and costs.

Document checklist for construction defect claim

To build a strong claim, gather the following documentation:

• Original construction contract
• Blueprints and engineering drawings
• Inspection reports and photos
• Repair invoices or estimates
• Correspondence with builder or contractor
• Warranty information
• Expert reports (engineer, architect, etc.)
• Notice of claim or complaint documents
• Real estate disclosure forms
• Timeline of events and maintenance records

This documentation helps prove liability and calculate damages accurately.

What does a construction defect claims attorney do?

A construction defect claims attorney:

• Evaluates the legal basis of your claim
• Assists with document preparation and expert coordination
• Ensures compliance with state notice and pre-suit requirements
• Negotiates settlements or repairs with responsible parties
• Represents you in court, arbitration, or mediation if necessary
• Protects your rights against insurance company denials or delay tactics

When to hire a construction defect claims attorney

Consider hiring an attorney when:

• The contractor or seller denies responsibility
• The defect has caused significant damage or repair costs
• Insurance refuses to cover your claim
• You’re unsure of your legal obligations or requirements
• Litigation or arbitration is likely
• You’re facing a construction defect lawsuit as a builder or subcontractor

The sooner you involve a legal professional, the better your chances of a successful resolution.