In Hawaii, since the defect claim on the improved property in question is residential, the owner must comply with the HI Contractor Repair Act. The Act provides that once a potential defect is discovered on a property, the owner is required to give the contractor an opportunity to cure by allowing the contractor to inspect the allegedly defective work, and either acknowledge the defect and offer a settlement or dispute the claim.
Settlement offer or disputing the claim
If acknowledging the defective work, then contractor may settle the claim by either offering to do the repairs, offering monetary compensation, or both. If offering to settle through repair, the contractor must be granted access to the property.
If disputing the claim, this can be done by either serving the owner with a written rejection, or failing to respond to the notice within 30 days of receipt of the claim.
Mediation proceedings
If the parties are unable to resolve the claim through these procedures, the parties will be required to submit to mediation; regardless of whether mediation is required by the contract or not. If the dispute can't be resolved through mediation, the contractor may be faced with a lawsuit brought under a negligence or breach of contract claim.
For more information, Scott Batterman, a partner at Clay, Chapman, Iwamura, Pulice & Nervell (a Honolulu based law firm) has a great post outlining the Key Steps for Contractors to take regarding construction defect claims under the Contractor Repair Act.
NOTE. The information presented here is for informational purposes only. It is not legal advice and should not be construed nor relied upon as such. Furthermore, this posting does not create an attorney-client relationship. If you need legal advice, seek the counsel of a licensed, local attorney.See More...See More...