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Louisiana Law Encourages the Return of Liability Insurers

On May 21, Louisiana Governor Kathleen Babineaux Blanco signed legislation amending the state’s New Home Warranty Act to reduce the warranty period for major structural defects in homes from seven to five years.

The Louisiana Home Builders Association (LHBA) advocated House Bill 401 as an important step in bringing general liability insurance carriers back to the state.

“We wanted to send the message that the legislature recognizes the absolute need to provide quality, safe and affordable housing to its citizens,” said Michelle Shirley, the association’s legislative affairs officer. She said the new law will help “encourage insurers to return to our market and make general liability insurance more readily available and affordable for our members.”

Shirley credits the success of the bill’s passage to an active campaign by her association’s grassroots membership. “It was a tough fight, but we got it done with lobbying, phone calls and e-mail from our members,” she said.

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Adopted in 1986 and considered one of the best in the country, Louisiana’s original New Home Warranty Act was designed to encourage the enactment of builder licensing and the availability of general liability insurance. Under the new amendment, the act now provides for a five-year warranty for defective foundations and structural components; two years for plumbing, electrical, and other system defects; and one year for cosmetic items.

The legislation also includes a Notice and Opportunity to Repair provision, which requires home owners to inform builders of alleged defects and give them an opportunity to make any necessary repairs.

The New Home Warranty Act also contains 19 warranty exclusions for builders, including soil movement, normal wear and tear and mold or mold damage.

“I think we have one of the best laws in the country,” said Shirley.

For more information on the Louisiana legislation, e-mail Michelle Shirley at LHBA or call her at 225-387-2714. For answers to general questions on Notice and Opportunity to Repair legislation, e-mail NAHB’s Sam Leyvas, or call him at 800-368-5242 x8326.

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