Senate Committee Passes Housing Liability Bill

The Senate Consumer Protection and Housing Committee passed Substitute SB 5500 out of committee today. Senator Jim Honeyford (R-15, Yakima) offered several amendments, but all of them were rejected by the majority Democrats on the committee. The substitute bill was not public available at the hearing today and the AIA/WA is working to get an official copy of the amended bill. But, according to the debate in committee it appears that they removed the section which changes the statute of repose from 6 years to 10 years. The committee also added a provision to require a legislative study of residential construction practices. The bill now goes to the Senate Rules Committee, which determines which bills come to the floor of the Senate and when.

UPDATE

The substitute bill was posted this morning. It has been shortened to the following subjects:

Section 1. Sets the definitions of what is to be covered by the home warranty. Basically, it boils down to the home (structure, siding, etc.) and appliances. The warranty does not include condos, manufactured or mobile homes, outbuildings, landscape features/systems, or appurtenant recreational facilities.

Section 2. Sets the length of warranties: 2 years for defects in materials and workmanship, 3 years for electrical and mechanical systems, 5 years for water penetration, 10 years for structural defects. It also includes a number of exemptions including normal wear and tear, insect damage, materials not supplied by the builder, damage from non-residential uses, damage due to homeowner negligence, damage by persons other than the builder, and acts of God.

The dollar limit on warranty is limited to the actual cost of repair or the fair market value of the home. The contractor has a right to collect from subcontractors who are at fault for defects. It sets a six year statue of limitations from when the defect is discovered or should have been discovered. It also sets a 10 year limit for the warranty period. The warranty is transferable to new owners.

Section 3. Creates a committee on residential construction to study “the cause, extent, and type of construction defects” in the residential market (and a bunch of other stuff). An architect is on the committee.