13 Similarly, a builder acts fraudulently if he/she does not disclose facts
that greatly affect the value of the property and which are not known or discoverable by the
buyer. The buyer can then bring an action for fraudulent concealment against the builder.
Homeowners can also bring an action against the builder under the Arizona Consumer Fraud Act.
ARS ' 44-1522 et. seq. The Act is intended to eliminate unlawful practices in merchant-
consumer transactions. A claim brought under this Act is easier to prove than the common law
actions of fraudulent concealment and misrepresentation but the drawback of bringing a fraud
action under the Act is that attorney's fees are not recoverable.
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STATUTES OF REPOSE AND LIMITATION
In most construction defect cases, an analysis must be made as to potential statute of repose
and statute of limitation issues because builders often use these statutes as defenses to a
homeowner's case. Statutes of repose are distinguishable from statutes of limitation because
statutes of repose bar lawsuits after a certain period of time, regardless of whether damage or
an injury has been discovered. Under these statutes, the limitation period may expire before a
homeowner's cause of action has arisen. Statutes of limitation, on the other hand, foreclose
suits after a fixed period of time following occurrence or discovery of an injury.
A. Statute of Repose:
Statutes of repose are enacted to protect developers and builders who would otherwise endure
unending liability, even after they had lost control over the use and maintenance of the
property. Arizona has a statute of repose specifically targeted to construction defect cases:
Eight Year Statute of Repose (Contract Actions)14: The homeowner must bring an action
against the builder/contractor for construction defects based on a written contractual
agreement within 8 years of substantial completion (see below) of the home. Examples of written
contractual agreements include, among others, real estate contracts, sales agreements, and
construction agreements. This 8-year statute of repose also applies to actions based on the
implied warranty of habitability and workmanship. ARS ' 12-552(A).
(1) If, however, the defect has caused injury to the land or to the house and that injury
occurs during the eighth year after the substantial completion of the house, an action may be
brought within 1 year after the date on which the injury occurred but no more than 9 years
after substantial completion of the house. ARS ' 12-552(B).
(2) Similarly, in the case of latent defects (defects that are not discoverable by reasonable
inspection such as defects in slope, landfill, etc), if the latent defect is not discovered
until the eighth year after substantial completion of the home, an action may be brought within
1 year after the date it is discovered but no more than 9 years after substantial completion of
the house. ARS ' 12-552(B).
The following table outlines the statute of repose governing construction defect actions detailed above: