State and Local Reporter - 02/09/2006 (Plain Text Version)

Barry Rutenberg, Chair
Gainesville, Florida

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In this issue:
Virginia Builders Rally in Richmond
Development Approval and Permitting Process Ranks as Top Industry Concern
Legislative Priorities from Around the Country
New Study Measures Housing's Impact on State Economies
EOC Scholarship Program Assists State & Local Education
11 Indicted in ‘Eco Terrorism’ Case
Illinois, Colorado Consider Affiliated Business Legislation
NOR Bills Debated Throughout the Country
Midterm Elections to Stir Powers in the States
UPDATE: U.S.-Mexican Agreement-In-Principle Will Help Alleviate Cement Shortages, Builders Say
Save the Date: NAHB 2006 Legislative Conference
NAHB State and Local Issues Fund: Fighting for the Housing Industry
Deadline for Legal Action Fund Applications Is Coming Up

NOR Bills Debated Throughout the Country

With legislative sessions convening, lawmakers in numerous states, including Illinois, Pennsylvania, Virginia, and Wisconsin, are considering notice and opportunity to repair (NOR) legislation. This legislation would allow homeowners and builders to resolve construction defect claims by offering an alternative mechanism to costly litigation. Generally, NOR laws require the homeowner to notify a builder of an alleged construction defect before the homeowner can file a lawsuit. The builder is then provided time to repair the defect, compensate the homeowner for the defect, or 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 homeowner’s claim outright. If the alleged defect is not resolved through the NOR process, the homeowner can then file suit.

Currently, 27 states - 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 – have NOR statutes. In fact, 24 states have passed this type of legislation within the past three years. Most recently, Missouri, New Hampshire, and North Dakota enacted NOR laws.

Overview of 2006 Legislation

Illinois House Bill 4873 would require a homeowner to notify a construction professional of an alleged construction defect at least 60 days prior to filing a lawsuit. The professional would then have 21 days to respond to the homeowner. This bill has been referred to the House Rules Committee.

If Pennsylvania House Bill 1467 is enacted, a homeowner 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 the builder 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 crossed over to the Senate.

Wisconsin Senate Bill 448 would require a homeowner or condo association to give notice to a contractor at least 90 working days before filing a court action against the contractor. If the contractor is not seeking contribution from a supplier for the defect, the bill would require the contractor to respond within 15 days. If the contractor is seeking contribution from a supplier, the contractor would be required to respond within 25 days. The Senate Committee on Housing and Financial Institutions recently held a hearing on this bill.

As sessions continue, NOR proposals will be debated in more statehouses. With 46 states holding legislative elections, this year’s sessions will be shorter, so bills will move quickly. To stay up-to-date, continue to read future editions of the State & Local Reporter and visit www.nahb.org/NOR. For more information on NOR laws across the country, e-mail Gerry Keegan in NAHB's State & Local Government Affairs department, or call him at 800-368-5242 x8326.