Video FAQ:

What is a tolling agreement and why would we want to use one?

The tolling agreement is an agreement between two parties that stops the statute of limitations from continuing to run. Sometimes, builders will propose a tolling agreement while they are undergoing negotiations with the association for repair of a construction defect.

There is nothing per se wrong with a tolling agreement. It does provide the parties with more time to resolve their differences and not file a lawsuit. However, you have to be careful because a tolling agreement only binds the parties to the tolling agreement. So, if for some reason the builder goes out of business or there’s some other kind of a problem, other parties who are potentially liable, such as a general contractor and the subcontractors, they will not be bound by the tolling agreement, and the statute of limitations could expire while you’re in the process of negotiating with the builder.