2021 Georgia Code
Title 8 - Buildings and Housing
Chapter 2 - Standards and Requirements for Construction, and Alteration, of Buildings and Other Structures
Article 1 - Buildings Generally
Part 2A - Resolution of Construction Defects
§ 8-2-38. Notice of Claim; Written Response of Contractor to Claim; Effect of Contractor's Failure to Respond; Inspection; Offer of Settlement and Rejection of Offer; Alteration of Procedure for Notice
- In every action subject to this part, the claimant shall, no later than 90 days before initiating an action against a contractor, provide service of written notice of claim on that contractor. The notice of claim shall state that the claimant asserts a construction defect claim or claims and is providing notice of the claim or claims pursuant to the requirements of this part. The notice of claim shall describe the claim or claims in detail sufficient to explain the nature of the alleged construction defects and the results of the defects. In addition, the claimant shall provide to the contractor any evidence that depicts the nature and cause of the construction defect, including expert reports, photographs, and videotapes, if that evidence would be discoverable under evidentiary rules.
- Within 30 days after service of the notice of claim by a claimant required in subsection (a) of this Code section, each contractor that has received the notice of claim shall serve on the claimant, and on any other contractor that has received the notice of claim, a written response to the claim or claims, which either:
- Offers to settle the claim by monetary payment, the making of repairs, or a combination of both, without inspection; or
- Proposes to inspect the dwelling or common area that is the subject of the claim.
- If the contractor wholly rejects the claim and will neither remedy the alleged construction defect nor settle the claim or does not respond to the claimant's notice of claim within the time stated in subsection (b) of this Code section, the claimant may bring an action against the contractor for the claims described in the notice of claim without further notice except as otherwise provided under applicable law. A contractor that does not respond to a notice of claim within the time prescribed by subsection (b) of this Code section may not claim or assert that the absence of documents required to be provided with the notice of claim under subsection (a) of this Code section relieved the contractor from the contractor's obligation to respond to the notice of claim.
- If the claimant rejects the settlement offer made by the contractor, the claimant shall provide written notice of the claimant's rejection to the contractor and, if represented by legal counsel, his or her attorney. The notice shall include the reasons for the claimant's rejection of the contractor's proposal or offer. If the claimant believes that the settlement offer:
- Omits reference to any portion of the claim; or
- Was unreasonable in any manner,
the claimant shall in his or her written notice include those items that claimant believes were omitted and set forth in detail all known reasons why the claimant believes the settlement offer is unreasonable.
- If a proposal for inspection is made pursuant to paragraph (2) of subsection (b) of this Code section, the claimant shall, within 30 days of receiving the contractor's proposal, provide the contractor and its subcontractors, agents, experts, and consultants prompt and reasonable access to the dwelling or common area to inspect the dwelling or common area, document any alleged construction defects, and perform any destructive or nondestructive testing required to fully and completely evaluate the nature, extent, and cause of the claimed defects and the nature and extent of any repairs or replacements that may be necessary to remedy the alleged defects. If destructive testing is required, the contractor shall give claimant advance notice of such tests and shall, after completion of the testing, return the dwelling or common area to its pretesting condition. If any inspection or testing reveals a condition that requires additional testing to allow the contractor to fully and completely evaluate the nature, cause, and extent of the construction defect, the contractor shall provide notice to the claimant of the need for such additional testing and the claimant shall provide prompt and reasonable access as set forth in this Code section. If a claim is asserted on behalf of owners of multiple dwellings or multiple owners of units within a multifamily complex, the contractor shall be entitled to inspect each of the dwellings or common areas which may be or appear to be affected by the alleged defect. The contractor shall commence and diligently pursue completion of all the desired inspections within the 30 day period after delivery of the contractor's written proposal. Inspection shall be completed within the same 30 day period if reasonable or within a reasonable period thereafter if completion is not reasonable within 30 days.
- Within 14 days following completion of the inspection and testing set forth in this Code section, the contractor shall serve on the claimant:
- A written offer to fully or partially remedy the construction defect at no cost to the claimant. Such offer shall include a description of any additional construction necessary to remedy the defect described in the claim and an anticipated timetable for the completion of such construction;
- A written offer to settle the claim by monetary payment;
- A written offer including a combination of repairs and monetary payment; or
- A written statement that the contractor will not proceed further to remedy the defect, along with the reasons for such rejection.
- If a claimant accepts a contractor's offer made pursuant to paragraph (1), (2), or (3) of subsection (f) of this Code section and the contractor does not proceed to make the monetary payment or remedy the construction defect or both within the agreed timetable, the claimant may bring an action against the contractor for the claim described in the notice of claim without further notice except as otherwise provided by applicable law. In such a situation, the claimant may also file the contractor's offer and claimant's acceptance, and such offer and acceptance will create a rebuttable presumption that a binding and valid settlement agreement has been created and should be enforced by the court or arbitrator.
- If a claimant receives a written statement that the contractor will not proceed further to remedy the defect or if the contractor fails to serve the claimant with the required written offer or written statement within the time prescribed by subsection (f) of this Code section, the claimant may bring an action against the contractor for the claim described in the notice of claim without further notice except as otherwise provided by applicable law. The contractor's written statement shall include all known reasons for the rejection of the claim.
- If the claimant rejects the offer made by the contractor to remedy the construction defect or to settle the claim by monetary payment or a combination of each, the claimant shall serve written notice of the claimant's rejection on the contractor. The notice shall include all known reasons for the claimant's rejection of the contractor's offer.
- Upon receipt of a claimant's rejection and the reasons for such rejection, the contractor may, within 15 days of receiving the rejection, make a supplemental offer of repair or monetary payment or both to the claimant.
- If the claimant rejects the supplemental offer made by the contractor to repair the construction defect or to settle the claim by monetary payment or a combination of each, the claimant shall serve written notice of the claimant's rejection on the contractor. The notice shall include all known reasons for the claimant's rejection of the contractor's supplemental settlement offer.
- If a claimant rejects a reasonable offer, including any reasonable supplemental offer, made as provided by this part or does not permit the contractor to repair the construction defect pursuant to an accepted offer of settlement, the claimant may not recover an amount in excess of:
- The fair market value of the offer of settlement or the actual cost of the repairs made; or
- The amount of a monetary offer of settlement.
For purposes of this subsection, the trier of fact shall determine the reasonableness of an offer of settlement made pursuant to this part. If the claimant has rejected a reasonable offer, including any reasonable supplemental offer, and any other law allows the claimant to recover costs and attorneys' fees, then the claimant may recover no costs or attorneys' fees incurred after the date of his or her rejection.
- Any claimant accepting the offer of the contractor to remedy a construction defect shall do so by serving the contractor with a written notice of acceptance within 30 days after receipt of the offer. If no response is served upon the contractor within the 30 day period, then the offer shall be deemed accepted.
- If a claimant accepts a contractor's offer to repair a construction defect described in a notice of claim, the claimant shall provide the contractor and its subcontractors, agents, experts, and consultants prompt and unfettered access to the dwelling or common area to perform and complete the construction by the timetable stated in the settlement offer.
- If, during the pendency of the notice, inspection, offer, acceptance, or repair process, an applicable limitations period would otherwise expire, the claimant may file an action against the contractor, but such action shall be immediately stayed until completion of the notice of claim process described in this part. This subsection shall not be construed to:
- Revive a statute of limitations period that has expired prior to the date on which a claimant's written notice of claim is served; or
- Extend any applicable statute of repose.
- After the sending of the initial notice of claim, a claimant and a contractor may, by written mutual agreement, alter the procedure for the notice of claim process described in this part.
(Code 1981, §8-2-38, enacted by Ga. L. 2004, p. 500, § 1; Ga. L. 2006, p. 548, § 1/SB 573.)Code Commission notes.
- Pursuant to Code Section 28-9-5, in 2004, "the contractor" was substituted for "then contractor" in the last sentence (now the fourth sentence) of subsection (e); "to the claimant" was substituted for "to claimant" at the end of subsection (j); "then the claimant" was substituted for "then claimant" in the last paragraph of subsection (l)(2); and "experts, and" was substituted for "experts and" in subsection (n).Editor's notes.
- Ga. L. 2006, p. 548, § 3(c)/SB 573, not codified by the General Assembly, provides that the amendment to this Code section shall only apply with respect to causes of action or claims arising on or after April 28, 2006, and any prior causes of action or claims shall continue to be governed by prior law.Law reviews.
- For annual survey of trial practice and procedure, see 56 Mercer L. Rev. 433 (2004). For article, "Construction Law," see 63 Mercer L. Rev. 107 (2011).
- Nothing in the Repair Act, O.C.G.A. § 8-2-36 et seq., contemplates that a claimant's action be dismissed for failing to provide the pre-litigation notice under the Act, O.C.G.A. § 8-2-38, because any pre-notice action is stayed to afford the parties time to try to resolve the parties' disputes; nothing in the Act prevents a potential claimant from taking action to mitigate his or her losses. Lumsden v. Williams, 307 Ga. App. 163, 704 S.E.2d 458 (2010).Buyers' remedial repair efforts did not entitle sellers to summary judgment.
- Trial court erred in determining that the buyers' remedial repair efforts entitled sellers to summary judgment under the Repair Act, O.C.G.A. § 8-2-36 et seq., in the buyers' action to recover for alleged construction defects in their home because the trial court followed the statutory procedure by staying the action to allow the parties an opportunity to resolve their differences outside of litigation and when that process proved unsuccessful, the litigation proceeded; thus, the purpose of the Repair Act was served, and while the buyers' repairs to their home before the sellers were afforded an opportunity to resolve the dispute could create a jury issue as to any potential damages, that act did not authorize the grant of summary judgment in the sellers' favor. Lumsden v. Williams, 307 Ga. App. 163, 704 S.E.2d 458 (2010).Stay of proceedings.
- Trial court did not err in denying a contractor's motion to set aside a default judgment on the ground that a homeowner failed to give written notice of the homeowner's claims before filing a lawsuit, which the contractor argued was required under O.C.G.A. § 8-2-38(a), because the contractor did not ask for a stay so the contractor was not entitled to one; the statutory remedy for a failure of the plaintiff to give notice of his or her claims pursuant to § 8-2-38(a) is a stay of the proceedings, but a defendant is entitled to such a stay only if the defendant asks for the stay. Merry v. Robinson, 313 Ga. App. 321, 721 S.E.2d 567 (2011).
Cited in SunTrust Bank v. Hightower, 291 Ga. App. 62, 660 S.E.2d 745 (2008).