AIA/WA Testifies Against Expanded Liability for Building Officials

The legislature’s concern over the poor construction in the residential market continued today with a hearing on a bill to add statutory liability for building officials if a problem occurs. SB 5892 was introduced in 2007 by Senator Jim Honeyford (R-15, Yakima). The hearing was held before the Senate Consumer Protection & Housing Committee.

The bill would hold a city or county building official “liable for damages caused by their negligent failure to enforce the provisions of the state building code.” AIA/WA testified that there are many other measures before the legislature to address problems with residential construction including, licensing home inspectors, licensing residential construction contractors, and other bills. More fundamentally, the solution to bad construction practices is not to create new lawsuits. Education, training and enforcement are better ways to address the problems.

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.

Homeowner’s Bill of Rights

The Senate Consumer Protection and Housing Committee held a work session on construction problems with single-family residential construction. Senator Brian Weinstein (D-41) has introduced a series of bills that he has labeled the Homeowners Bill of Rights:

SB 5044 changes the statute of repose from 6 years to 10 years and exempts structural from the limits of the statute.
SB 5045 creates a new practice act licensing requirement for contractors.
SB 5046 creates a new legal cause of action for complaints about residential construction.
SB 5048 extends the statute of limitations on condominium projects if the suit is dismissed without prejudice.
SB 5049 creates a “home warranty” for single family construction.

The AIA/WA is very concerned that the approach taken in the bills will negatively impact the market for single family homes. They would create a whole new set of “legal rights” for single-family residential construction; or, more accurately, they would create new grounds for lawsuits. The resulting litigation will likely increase liability insurance rates for architects, engineers and contractors.

The “work session” was stacked with proponents for these bills including an advocacy coalition, attorneys for homeowners and homeowners with bad experiences. For an alternative perspective the Building Industry Association of Washington (BIAW), which represents homebuilders, and Contractors Bonding and Insurance Company (CBIC) testified about current industry practices.

Again, the hearing can be heard at http://www.tvw.org/; search for the committee name.

Attack on Architect and Builder Liability

If the first week is any indication we will be spending much of our time defending against bad bills. Senator Brian Weinstein (D-41) looks to be a source of many concerning bills dealing with liability and tort issues. On the second day of the legislative session he introduced several bills that bode ill for the design and construction community.

SB 5044 would increase the time limit in the state’s statute of repose from 6 years to 10 years and completely exempt structural defects in residential construction from any limits.

SB 5046 creates new causes of action for defects in residential (non-condominium) construction. It blows the doors wide open for new litigation on residential construction. You have to read the bill to understand how truly broad its application would be for architects, engineers, contractors, product manufacturers and others in the development community.

SB 5049 creates new warranty rights for basically everything in residential construction including: 2 years for defects in materials and workmanship, 3 years for systems in the home (plumbing, electrical, HVAC, etc.), 5 years for water penetration and 10 years for structural defects.

SB 5048 tolls the statute of limitations on condominium jobs if the suit is dismissed without prejudice. Basically, the bill extends the statute of limitations.

We are forming a Tort Reform Working group to tackle these bills. The working group will be responsible for analyzing the bills and helping with testimony. If you are interested in participating on this group, please contact me right away.

There is a work session the “Homeowners Bill of Rights” on Tuesday, January 16 at 1:30 p.m. before the Senate Consumer Protection and Housing Committee. It is no surprise that the chair of this new committee is Senator Weinstein. As this is a “work session” and not an official hearing, the witness list was preset and the AIA/WA was not included. The Building Industry Association of Washington (BIAW) will testify, but the deck is stacked with “homeowner” groups and trial attorneys.