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SB 168 - This act requires a claimant provide written notice to a contractor of a construction defect claim before initiating an action against the contractor. The notice shall sufficiently describe the nature of the alleged defects and provide any evidence depicting the nature or cause of said claim. Within fourteen days after service of the notice, a contractor may serve on the claimant a written response either offering settlement or proposing inspection of the dwelling. If the contractor wholly rejects the claim and refuses either remedy the alleged defect or settle the claim, or if the contractor does not respond to the claim within fourteen days, the claimant may bring an action against the contractor. If the claimant rejects the settlement offer made by the contractor, the claimant shall provide notice of the rejection within thirty days. If a request for inspection is made by the contractor, the claimant shall provide access to the dwelling for inspection and testing purposes within thirty days of receipt of said request. If destructive testing is required, the contractor shall give advanced notice to the claimant and after said testing shall return the dwelling to its pretesting condition. Within fourteen days of completion of inspections and testing, the contractor may serve the claimant with an offer of monetary settlement, to repair, or a combination of both, or a statement that the contractor will not proceed further to remedy the defect. If the contractor offers to repair or make a monetary settlement of the claim but fails to make payment or repair the defect, the claimant may bring an action against the contractor. Filing the offer of settlement and the claimants acceptance shall create a rebuttable presumption that a valid settlement agreement has been created and should be enforced. If the claimant rejects the offer made by the contractor, the claimant shall serve written notice upon the contractor of said rejection within thirty days. The notice shall include the reasons for the claimant’s rejection. Upon receipt of the claimant’s rejection, the contractor has fourteen days to elect to make supplemental offer of settlement. If the claimant rejects the supplemental offer of settlement, the claimant shall serve written notice upon the contractor setting out the reasons for rejection. In any subsequent action where the claimant asserts that the supplemental offer was unreasonable, the claimant will not be able to raise any issues that were not presented in the notice to the contractor. A contractor shall have fourteen days from receipt of the notice of rejection to request non-binding mediation. The mediator shall be agreed upon by both parties who shall equally share the cost of mediation. If the claimant rejects a reasonable offer, the claimant may not recover an amount in excess of the fair market value of the offer of settlement or the actual cost of repairs made, which ever is less. The claimant may not recover an amount in excess of the amount of a monetary settlement. A claimant who rejects a reasonable offer, as found by a trier of fact, may not recoup attorneys’ fees incurred after the date of rejection. A claimant wishing to accept an offer of settlement made by a contractor must do so within thirty days of receipt. Prompt and unfettered access must be provided to a contractor to allow the contractor to perform necessary repairs if the claimant accepts the offer of settlement. If during an period of the offer inspection and acceptance of settlement process, an applicable statute of limitations period would otherwise expire, the claimant may bring an action against the contractor, but the action shall be immediately abated pending completion of the notice of claim process. The notice of claim process may be amended by written agreement between both parties. Reasonable repairs may be immediately undertaken by the homeowner or his designee, including the contractor to prevent imminent injury to persons because of the alleged defects. Claimants may thereafter include the cost of such repairs in the written notice of claim sent to the contractor. Other than repairs undertaken to remedy an emergency situation, any other repairs to defects undertaken by homeowners shall not be included in claims against the contractor and shall not be the subject of an action. If a claimant files an action without first complying with the procedure set out in this act, the action shall be dismissed without prejudice, and the action may resume until the claimant has complied with all such requirements. To the extent the action includes a cause of action for personal injury or wrongful death, such cause of action shall not be subject to dismissal. Mediation under this section shall take place in the county where the claimant resides or any other mutually agreed upon location. If a claimant accepts an offer made in compliance with this act, the claimant shall thereafter be barred from bringing an action for the claim described in the notice. The act exempts contractors from liability for damages for certain causes and if the homeowner is not the first owner of the dwelling. Upon contracting for sale, construction, substantial remodel or improvement of a dwelling, a contractor shall provide notice to the owner of the contractor’s right to resolve alleged defects. The provisions of this act shall not apply in situations where a contractor brings an action against a homeowner and the homeowner make a counter claim for alleged defects. This act shall not preclude a contractor and homeowner from entering into contracts stipulating that an alternative form of dispute resolution shall be utilized to resolve disputes. The provisions of this act shall apply to associations asserting defects in the construction of two or more residences, common elements, or common areas. If passed, this act shall apply to all actions commenced on or after August 28, 2005. JASON ZAMKUS
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