​Construction Defect Claims in Indiana

A dispute over defective work on a house rarely starts in a courtroom, and in Indiana the law makes sure of it. Before a homeowner can sue a builder, contractor, architect or engineer over a construction defect, Indiana’s notice and opportunity to repair statute, Ind. Code ch. 32-27-3, requires a written notice of the claim and a structured chance for the construction professional to inspect the problem and offer to fix it or pay for it. 

A companion statute, the New Home Construction Warranties chapter, Ind. Code ch. 32-27-2, governs the express warranties a builder may give on a new home. Both statutes reward the side that follows the procedure and penalize the side that ignores it. This article walks through the process and the practices that keep a claim, or a defense, on solid footing.

Who and What the Right to Cure Statute Covers

The chapter applies to any civil action in contract or tort for damage to, or loss of use of, real or personal property caused by a defect in the construction of a residence or in its substantial remodeling, meaning a remodel whose total cost exceeds fifty percent of the home’s assessed value. A residence includes a single family house, a duplex, triplex or quadraplex, and a condominium or cooperative unit together with its common areas. 

A construction professional includes an architect, builder, builder vendor, contractor, subcontractor or engineer. Claims for personal injury or wrongful death are outside the chapter. Ind. Code § 32-27-3-1.

The Procedure and its Clocks

1. Notice of claim. At least sixty days before filing suit, the homeowner must serve a written notice of claim that states a construction defect claim is being asserted and describes the claim in reasonable detail sufficient to determine the general nature of the defect. Service means personal service or certified mail to the last known address. Ind. Code §§ 32-27-3-1(8), -2(a). Defects discovered after the first notice do not require a new notice, and an amended notice relates back to the original for purposes of the sixty day requirement and the statutes of limitations and repose. Ind. Code §§ 32-27-3-2(d), -8.
2. Response within twenty-one days. The construction professional must serve a written response that does one of three things: propose to inspect the residence within a specified time frame, with the statement that the professional will, based on the inspection, offer to remedy the defect, compromise by payment, or dispute the claim; offer to settle by payment without an inspection; or state that it disputes the claim and will neither repair nor settle. Ind. Code § 32-27-3-2(b). If the professional disputes the claim or does not respond in time, the homeowner may sue without further notice. Ind. Code § 32-27-3-3(a).
3. Inspection and the fourteen day offer. If the homeowner accepts an inspection proposal, the homeowner must give the professional and its contractors reasonable access during normal working hours. Within fourteen days after the inspection the professional must serve either a written offer to remedy the defect at no cost, including a report of the inspection, its findings, a description of the additional construction needed and a timetable; a written offer to settle by payment; or a written statement that it will not proceed further. Ind. Code § 32-27-3-4(a), (b). An offer to repair that is not carried out on the agreed timetable, or no offer at all, opens the door to suit without further notice. Ind. Code §§ 32-27-3-4(c), -7.
4. Acceptance or rejection. To accept an offer to repair, the homeowner must serve a written acceptance within a reasonable time and no later than sixty days after receiving the offer, and must then give reasonable access so the work can be completed on the stated timetable. Ind. Code § 32-27-3-5(a), (b). A homeowner who rejects an inspection proposal or a settlement offer must serve a written rejection, and may then sue. Ind. Code §§ 32-27-3-3(b), -4(d). A professional that hears nothing for sixty days after the homeowner receives its response may terminate the proposal or offer by written notice, after which the homeowner may sue. Ind. Code §§ 32-27-3-3(c), (d), -4(e). The parties may change the scope or the timetable of an accepted repair by written mutual agreement. Ind. Code § 32-27-3-5(c).

What Happens When the Procedure Is Skipped

• Early suits are dismissed. An action filed before the homeowner complies with the chapter is subject to dismissal without prejudice and may not be refiled until the homeowner complies. Ind. Code § 32-27-3-6.
• Attorney’s fees can shift either way. A homeowner who unreasonably rejects a reasonable written offer of settlement, or who will not allow a reasonable opportunity to inspect or repair under a reasonable offer, and then sues may be denied fees and costs and ordered to pay the professional’s. The one exception is that a homeowner is never required to accept an offer to repair a defect caused by the professional’s failure to follow the building code. Ind. Code § 32-27-3-9(a). On the other side, a professional that unreasonably disputes a claim, fails to remedy or settle it, fails to repair within a reasonable time, or fails to respond to a notice may be ordered to pay the prevailing homeowner’s fees and costs. Ind. Code § 32-27-3-10. A professional that does not comply with the chapter also releases the homeowner from complying further. Ind. Code § 32-27-3-9(c).
• Warranty payments are credited. Sums paid under a homeowners warranty are deducted from any recovery. Ind. Code § 32-27-3-9(b).
• The clock pauses, within limits. A notice of claim served within the limitations period tolls the statute of limitations for the defects described in the notice, from the day of service until sixty days after the period during which suit is barred under the chapter. Ind. Code § 32-27-3-14. The tolling reaches only the defects the notice describes, which is one more reason to write the notice carefully. Separately, Indiana’s construction statute of repose bars an action for a construction deficiency unless it is commenced within ten years after substantial completion of the improvement, or twelve years after plans and specifications are submitted to the owner for a design deficiency. Ind. Code § 32-30-1-5(d).
• Once in court, a list of defects is due. In every action against a construction professional the homeowner must file and serve a list of known construction defects within sixty days after the action begins, describing the construction alleged to be defective and, to the extent known, naming the professional responsible for each defect. The list may be amended as new defects become known. Ind. Code § 32-27-3-11.
• The contract must warn the homeowner. When a construction professional enters a contract for the sale, construction or substantial remodeling of a residence, it must give the homeowner a conspicuous notice of its right to offer to cure before the homeowner may sue, in substantially the capitalized form the statute sets out, and the notice may be part of the signed contract. Ind. Code § 32-27-3-12(a), (b). The chapter says a missing notice does not bar the homeowner’s action. Ind. Code § 32-27-3-12(c). It does not say the builder loses the cure process, but no builder should want to litigate that question.

The New Home Warranty Statute

For a newly built home, the warranty chapter supplies the express warranties a builder may give the initial home buyer, each measured from the warranty date, which is the date of first occupancy as a residence: two years against defects caused by faulty workmanship or defective materials; two years against defects caused by faulty installation of plumbing, electrical, heating, cooling or ventilating systems, excluding fixtures, appliances and equipment; four years for the roof and roof systems; and ten years against major structural defects, meaning actual damage to the load bearing part of the home, including damage from soil subsidence, expansion or lateral movement other than from a natural disaster. Ind. Code §§ 32-27-2-3, -7, -8(a).

The warranties survive a transfer of title, and a seller who first occupied the home as the builder, the builder’s tenant or at the builder’s request must tell the purchaser in writing, by closing, the warranty date and the time remaining. Ind. Code § 32-27-2-8(b), (c). Since the 2023 amendments the chapter also covers model homes and no longer reaches mobile, manufactured or industrialized homes. Ind. Code §§ 32-27-2-3.5, -4(c), -8.5.

A builder may disclaim the implied warranties that courts otherwise read into a new home sale only by meeting every statutory condition: the statutory warranties written into the contract, warranty performance backed by insurance at least equal to the purchase price, completed operations products liability coverage, a disclaimer in at least ten point boldface stating that the statutory warranties are in lieu of the implied ones, and the buyer’s signature on the disclaimer and on a separate one page notice that begins “NOTICE OF WAIVER OF IMPLIED WARRANTIES.” 

A lapse in either insurance policy voids the disclaimer from that point on. Ind. Code § 32-27-2-9. For breach of a statutory warranty the buyer may recover the cost of repair or the loss in value, reasonably foreseeable consequential damages, and attorney’s fees only if the contract provides for them; the warranties are in addition to the parties’ contract rights. Ind. Code §§ 32-27-2-10, -11.

Best Practices for Builders and Contractors

• Put the statutory notice in every residential contract. Use the capitalized language from Ind. Code § 32-27-3-12(b), make it conspicuous, and keep a signed copy. It costs nothing and it starts every dispute on the statute’s terms rather than the homeowner’s.
• Treat a notice of claim as a twenty-one day deadline. Respond in writing, in one of the three statutory forms, and serve the response by certified mail or personal delivery so there is proof. An inspection proposal that omits the required statement about what will follow the inspection is not a compliant response.
• Inspect promptly and document everything. Bring the subcontractor whose work is in question, photograph the conditions, and keep the fourteen day clock in view. A written offer to repair must include the inspection report, findings, the scope of the additional construction and a timetable.
• Make the offer reasonable, and make it in writing. The fee protection in Ind. Code § 32-27-3-9 attaches only to a reasonable written offer. A low offer gains nothing, and a repair that would leave a building code violation in place cannot be forced on the homeowner at all.
• Perform on the timetable you stated. Missing the timetable lets the homeowner sue without further notice. If the scope or schedule must change, get the change in a signed writing as the statute allows.
• Track the sixty day acceptance window. If the homeowner neither accepts nor rejects within sixty days of receiving the response, terminate the stale offer by written notice rather than leaving it open indefinitely.
• Identify subcontractors and insurers at the notice stage. The list of known defects that follows a lawsuit will name the professional responsible for each item, so tender the claim to the responsible subcontractor and to the carrier as soon as the notice arrives.
• New home builders: match the paperwork to Ind. Code ch. 32-27-2. Write the warranties into the contract in the statutory terms, keep the warranty insurance and completed operations coverage in force if the contract disclaims implied warranties, use the separate signed one page notice, and disclose the warranty date and remaining term when a first occupied home is sold.

Best Practices for Homeowners

• Do not file first. A complaint filed before the notice and cure process is complete will be dismissed, and the time and expense of filing are lost.
• Write a notice that does its job. State that you are asserting a construction defect claim, describe each defect in reasonable detail, include everything you know, and serve the notice by certified mail to the professional’s last known address. Keep the receipt. Because the tolling in Ind. Code § 32-27-3-14 reaches only the defects the notice describes, amend the notice as you learn more; the amendment relates back.
• Calendar the statute’s deadlines. Twenty-one days for the response, fourteen days after an inspection for the offer, and sixty days for you to accept or reject. Answer in writing every time, because a silence of sixty days lets the professional withdraw its offer.
• Allow a reasonable inspection. Refusing access under a reasonable offer can cost you your attorney’s fees and expose you to the professional’s.
• Take written offers seriously. Unreasonably rejecting a reasonable written offer can shift fees. You are never required to accept a repair of a code violation, and whether a particular offer is reasonable is a judgment call on which counsel can help.
• Know your outer deadlines. The notice pauses the limitations period for the defects it describes, but the ten year repose period from substantial completion in Ind. Code § 32-30-1-5 is a separate limit.
• For a new home, find the warranty date and the paperwork. The warranty date is the date of first occupancy, the periods are two, two, four and ten years, and any payment you have received under a homeowners warranty will be deducted from a later recovery. Check whether you signed a disclaimer of implied warranties and whether the builder’s insurance behind it is in force.
• Keep records. Dated photographs, correspondence, invoices and inspection reports are what prove the defect, the notice and the professional’s response.

For disputes involving incomplete work, payment disagreements, or contract changes, read more about home improvement contractor disputes in Indiana.

How We Can Help

Podlaski LLP represents homeowners, builders and contractors in construction disputes throughout Indiana, from drafting compliant contract notices and notices of claim through inspection, settlement and litigation. If you have received a notice of claim, or are considering sending one, contact our office to discuss the next step.

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This article provides general information about Indiana law and is not legal advice for any particular situation. Reading it does not create an attorney client relationship. Statutory references are to the 2026 edition of the Indiana Code.

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