SB 168 Creates a process to resolve disputes arising out of alleged construction defects in residential property
Sponsor: Dolan Co-Sponsor(s)
LR Number: 0780L.10T Fiscal Note: 0780-10
Committee: Judiciary and Civil & Criminal Jurisprudence
Last Action: 7/12/2005 - Signed by Governor Journal Page:
Title: HCS SS SCS SB 168 Calendar Position:
Effective Date: August 28, 2005
House Handler: Pratt

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Current Bill Summary


HCS/SS/SCS/SB 168 - This act permits contractors to repair construction defects prior to the commencement of litigation.

Contractors must provide notice in contracts with homeowners for the sale, construction, or substantial remodel of a residence. The notice sets out required procedures for resolving disputes with contractors. Additionally, the contractor must provide the homeowner with a flowchart describing the various time frame guidelines processes required by this act (Section 431.303).

Before filing an action against a contractor claiming a construction defect relating to the construction or remodel of a residence, the homeowner must serve the contractor with notice of the claim of construction defects. The contractor shall respond to the claim, which may include offers to inspect the residence, remedy of all or part of the claim, or deny the homeowner's claim. An action can be filed if the contractor violates any of the requirements of the act.

The claimant may reject the offer of compromise from the contractor. The parties may then attempt to mediate the claim as provided in this act. If the claim is not resolved by mediation, the claimant may file an action against the contractor. None of the written statements made in attempt to reach an agreement of the parties may be used against either party in a subsequent cause of action and the mediator may not be subpoenaed.

If the homeowner elects to allow the contractor to inspect the residence, the parties shall agree on a time and date for the inspection within 14 days. The inspection shall occur within 14 days from the date that the homeowner elects to allow the contractor to inspect. Within 14 days after the inspection, the contractor shall serve a report to the claimant on the scope of the inspection and the findings and results of the inspection, and the contractor may provide the claimant with a written offer to remedy the defect, make an offer of monetary settlement, or deny liability. If the contractor does not adhere to the timetable under this section, the claimant may file suit. If the claimant rejects the offer of settlement, the matter may be mediated.

All civil actions that do not follow the requirements of this act shall be dismissed without prejudice. However, adherence to the requisites of this act will toll the statute of limitations.

If immediate action by the homeowner is needed to prevent injury because of construction defects, including garage doors, that threaten the life, physical health (not including emotional or mental health) or safety of persons, the homeowner can make such repairs and may include the costs of repairs in the written notice of construction defects. Any other homeowner repairs may not be included in the claim (Section 431.306).

The act establishes a cause of action that can be brought on behalf of the homeowners' association or condominium association. An association must hold a meeting of the members upon the request of the contractor after rejection of the contractor's settlement offer by the association. The meeting is only required if the contractor asks for such a meeting in its settlement offer. The meeting must be held at least 15 days prior to filing a claim. The notice for the meeting must include the time and place of the meeting, the options that are available to address the construction defects and the text of the settlement offer. No more than one request to meet can be made by the contractor.

The parties may seek mediation before commencing any civil action. Mediation must be non-binding and independently administered. The parties share the cost of the mediator's charges. The mediation must commence within 45 days of a request for mediation by either party. Documents or statements used in mediation cannot be used in any subsequent civil action (Section 431.312).

Nothing in this act shall be construed to create a theory or cause of action upon which liability may be based or to limit any causes of action otherwise available to a homeowner or contractor. Furthermore, nothing in this act shall be construed to prevent contracts between homeowners and contractors calling for binding arbitration. This act does not apply to an action brought by an insurer if payment was made by the insurer pursuant to a claim under an insurance policy (Section 431.315).

The act prohibits a racially discriminatory restrictive covenant in any declaration or other governing document of a homeowners association. The board of directors of any association shall amend, without approval of the owners, any declaration or other governing document that includes a restrictive covenant and shall restate the declaration or document without the restrictive covenant. If, after notice to the association, it fails to remove a restrictive covenant, the commission on human rights, a city or county where the development is located, or any person may bring an action for injunctive relief. The court may award attorney fees to the prevailing party. The provisions of this section will become effective on January 1, 2006 (Section 213.041).

JIM ERTLE