• Civil Law
• Housing

This bill modifies the legal framework for construction defect claims, particularly for middle market housing, by adding procedural requirements, extending the statute of limitations, and increasing homeowner association approval thresholds for lawsuits.

• Anyone filing a construction defect lawsuit against an architect or engineer must also submit:
  • An affidavit from a third-party licensed professional (e.g., another architect or engineer) that details the negligence, error, or omission.
• New Presumption Against Defects:
  • If a state agency or local government issued a certificate of occupancy, the property is presumed to be free of defects.
  • This presumption is rebuttable, meaning claimants can still argue otherwise, but they must provide stronger evidence.

• Duty to Mitigate:
  • A claimant must take reasonable steps to mitigate the defect.
  • The bill outlines how to meet this duty and the consequences of failing to do so.
• Required Response from Construction Professionals:
  • If a claimant notifies a construction professional of a defect, the professional must either:
    1. Offer to settle the claim, or
    2. Submit a written response explaining the applicable construction standards and why the alleged defect does not require repair.
• Additional Information Disclosure:
  • A construction professional defending against a defect lawsuit must provide specific information to the claimant about the construction.

• Default statute of limitations: 10 years.
• Reduced statute of limitations: 6 years if the construction professional provided a consumer warranty that meets the bill’s requirements.
• Statute of limitations/repose is paused (tolled) while a claimant is actively mitigating a defect.

• Construction professionals who meet certain requirements may use affirmative defenses against construction defect claims.
• These legal protections could help reduce liability risks for builders of middle market housing.

• Increased HOA Approval Threshold:
  • Currently, a majority (51%) of unit owners must approve a construction defect lawsuit.
  • The bill increases this threshold to 65%.
• Use of Damages from Lawsuits:
  • If an HOA wins monetary damages in a lawsuit, the first priority must be to repair the defects before any other use of funds.

• Stricter filing requirements for lawsuits, including a third-party affidavit for claims against architects/engineers.
• New legal presumption that properties with a certificate of occupancy do not have defects (unless proven otherwise).
• Homeowners must mitigate defects before suing.
• Construction professionals must respond to defect claims with either a settlement offer or explanation.
• Statute of limitations extended to 10 years, but only 6 years if a proper warranty is provided.
• HOAs must get 65% owner approval (instead of 51%) before filing lawsuits.
• Damages from lawsuits must first be used for repairs.

For construction of middle market housing, section 3 of the bill
requires a person filing a construction defect action against an architect
or engineer to file with the complaint an affidavit of a third-party licensed
professional indicating the negligence or other action, error, or omission
of the construction professional. Section 3 also establishes a rebuttable
presumption that a property does not have a construction defect when a
state agency or local government has issued a certificate of occupancy for
the property.
Section 4:
  • Establishes a claimant's duty to mitigate an alleged
construction defect and specifies how a claimant may
satisfy this duty and the consequences to a claimant that
fails to satisfy this duty;
  • Requires that a construction professional must send or
deliver to the claimant an offer to settle the claim or a
written response that identifies the standards that apply to
the claim and explains why the defect does not require
repair; and
  • Requires a construction professional who is the defendant
in a construction defects action to submit specified
information to the claimant.
Section 5 updates the statute of limitations for construction defect
claims to 10 years unless the construction professional provided the
consumer with a warranty that meets the requirements of the bill, in
which case the statute of limitations is 6 years. Section 6 tolls the statute
of limitations or repose during a claimant's mitigation of an alleged
construction defect claim brought for the construction of middle market
housing.
Section 7 allows a construction professional that meets specified
requirements to use certain affirmative defenses in construction claims
brought against the construction professional for the construction of
middle market housing.
Current law requires the executive board of a unit owners'
association (executive board) to obtain approval from a majority of
owners before initiating a construction defect claim on behalf of the
owners. Section 8 increases the approval amount to 65%. Section 8 also
requires an executive board that is successful in a construction defect
claim to first use monetary damages received as a result of the claim to
repair the construction defect.

• Past bill versions
• Past fiscal notes
• Committee activity and documents
• Bill History