Opportunity to Repair Movement Advances in States
Looking for an alternative mechanism to costly litigation in resolving construction defect claims, lawmakers in numerous states — including Illinois, Pennsylvania, Virginia and Wisconsin — are considering notice and opportunity to repair (NOR) legislation.
Generally, NOR laws require the home owner to notify a builder of an alleged construction defect before the home owner can file a lawsuit. The builder then has the opportunity to repair the defect, compensate the home owner for the defect or provide a combination of both. In addition, the builder is usually allowed to inspect the dwelling to determine the nature and cause of the defect.
The builder can also reject the home owner’s claim outright. If the alleged defect is not resolved through the NOR process, the owner can then file suit.
Twenty-seven states currently have NOR laws: Alaska, Arizona, California, Colorado, Florida, Georgia, Hawaii, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, Nevada, New Hampshire, North Dakota, Ohio, Oregon, South Carolina, Tennessee, Texas, Virginia, Washington, and West Virginia. And 24 of those states have passed this type of legislation within the past three years.
Missouri, New Hampshire and North Dakota are the latest states to enact NOR laws.
Among the legislation that is being considered this year:
- Illinois House Bill 4873 would require a home owner to notify a construction professional of an alleged construction defect at least 60 days prior to filing a lawsuit. The builder would then have 21 days to respond. This bill has been referred to the House Rules Committee.
- If Pennsylvania House Bill 1467 is enacted, a home owner would be required to notify a contractor 75 days before initiating legal proceedings to resolve a construction defect claim. In most cases, the contractor would have 15 days to respond to the allegations. HB 1467 passed the House and is working its way through the Senate.
- The Virginia Legislature is considering House Bill 558, legislation that would require a claimant alleging a construction defect in a condominium to notify the builder and provide an opportunity to repair the defect. The claimant would be required to notify the builder six months prior to commencing a lawsuit. This bill passed the House and has crossed over to the Senate.
- Wisconsin Senate Bill 448 would require a home owner or condo association to give notice to a contractor at least 90 working days before filing a court action. The contractor would be required to respond within 15 days if a supplier has not contributed to the defect, or 25 days if a supplier is involved. The Senate Committee on Housing and Financial Institutions recently held a hearing on this bill.
NOR proposals are expected to be debated in an increasing number of statehouses as the year progresses. With 46 states holding elections for their legislatures, this year’s sessions will be shorter, so bills will move quickly.
For the latest information on this issue, NAHB members can click here; or e-mail Gerry Keegan at NAHB, or call him at 800-368-5242 x 8326.