If a Contractor Messes Up Your House, CT Will Now Pay You Up to $50K
The New Home Construction Guaranty Fund exists to protect homeowners when a registered new home builder fails to deliver and the homeowner cannot collect directly from them. It is essentially a financial safety net, offering up to $50,000 in reimbursement to eligible consumers, but strict requirements apply.
To qualify, the homeowner must first have already won either an arbitration award or a court judgment against the builder. The contractor must then be proven “judgment proof,” meaning they have no assets to collect against or they cannot be located. Once that judgment is in hand, the homeowner is required to hire a State Marshal to serve a writ of execution.
Proof must be provided that the writ was properly served and that there was no response. In cases where the homeowner started with an arbitration award, that award must be confirmed by a court judgment before any claim can move forward. Another important requirement is that the contractor had to be properly registered with the Department of Consumer Protection within the two years prior to signing the contract to build the home. Finally, the consumer must apply in writing to the Department of Consumer Protection within two years of the date of the judgment. While the process involves several steps, this fund is an important tool that helps homeowners recover at least part of their losses when left dealing with a failed or unreachable builder.
Practically speaking, many contractors make things more complicated by setting up a brand-new LLC for each project they take on. These shell companies are designed to shield them from lawsuits if something goes wrong with your home. To access the Guaranty Fund, you still need to sue the LLC, even if it is just a shell. The silver lining is that many of these contractors don’t even bother to show up in court, so homeowners often win by default and eventually receive a judgment.
The challenge, however, is that reaching that point and then applying to the Guaranty Fund can be a long and frustrating process. There is usually a payoff at the end, but it can require significant time, patience, and legal fees. For that reason, it’s essential to do your homework before building. Know who is actually constructing your home, research them online, and avoid contractors with a pattern of hiding behind shell LLCs.
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