Trimpe: That's easy. It will save builders time and money.
What most “notice and opportunity to repair” laws do is take many expensive lawsuits and court actions out of the resolution process. This saves time and money for both the builder and the consumer.
This type of legislation is also designed to bring builders' skyrocketing insurance costs under control. Right now it's tough — if not impossible — for builders to get adequate and affordable general liability insurance. Taking most lawsuits out of the equation may help make our industry more attractive to insurers.
NBN Online: Which states currently have “notice and opportunity to repair” laws?
Trimpe: Six states so far — Arizona, California, Michigan, Nevada, Texas and Washington. Although the laws vary, all are based on the idea that it is better to fix than to sue.
NBN Online: Do these laws really work?
Trimpe: Well, the laws in Arizona, California and Washington are relatively new, so there isn't enough evidence to determine whether or not the laws have had an effect on the cost and availability of general liability insurance yet.
However, at least two large insurance carriers in California indicated that they will reconsider their decision to leave the market because of the new construction defect law that passed in that state last fall.
Because of the nature of the insurance market, it may take two or three years before the “notice and opportunity to repair” laws have any demonstrable effect on the price and availability of general liability insurance. Normally, insurance carriers need to experience a couple of years of reduced lawsuits before they will change their pricing structure.
NBN Online: Are other states considering “notice and opportunity to repair” bills this year?
Trimpe: Yes, Colorado, Idaho, Indiana, Kansas, Kentucky, New Mexico, Oklahoma, Oregon and West Virginia all have construction defect bills making their way through the legislative process. And from what I've heard, other states — Alabama, Alaska, Florida, Illinois, Louisiana, Missouri, Montana, Oregon, South Carolina and Wisconsin — are expected to consider legislation that contains “opportunity to repair” provisions, too.
NBN Online: Where can NAHB's members learn more about construction defect bills in their state?
Trimpe: Talk to your state association's executive officer or lobbyist. If your state is considering bills, or if your association is thinking about making reforms to the way your state resolves construction defects, you may want to tell them about the “notice and opportunity to repair” process.
For more information on construction defect legislation, contact NAHB's Scott DiBiasio via e-mail or at 800-368-5242 x8326.
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