Construction Defects & Middle Market Housing

For construction of middle market housing, section 3 of the bill requires a person filing a construction defect action against an architect or engineer to file with the complaint an affidavit of a third-party licensed professional indicating the negligence or other action, error, or omission of the construction professional. Section 3 also establishes a rebuttable presumption that a property does not have a construction defect when a state agency or local government has issued a certificate of occupancy for the property. Section 4:

• Establishes a claimant's duty to mitigate an alleged construction defect and specifies how a claimant may satisfy this duty and the consequences to a claimant that fails to satisfy this duty;
• Requires that a construction professional must send or deliver to the claimant an offer to settle the claim or a written response that identifies the standards that apply to the claim and explains why the defect does not require repair; and
• Requires a construction professional who is the defendant in a construction defects action to submit specified information to the claimant.

Section 5 updates the statute of limitations for construction defect claims to 10 years unless the construction professional provided the consumer with a warranty that meets the requirements of the bill, in which case the statute of limitations is 6 years. Section 6 tolls the statute of limitations or repose during a claimant's mitigation of an alleged construction defect claim brought for the construction of middle market housing. Section 7 allows a construction professional that meets specified requirements to use certain affirmative defenses in construction claims brought against the construction professional for the construction of middle market housing.

Current law requires the executive board of a unit owners' association (executive board) to obtain approval from a majority of owners before initiating a construction defect claim on behalf of the owners. Section 8 increases the approval amount to 65%. Section 8 also requires an executive board that is successful in a construction defect claim to first use monetary damages received as a result of the claim to repair the construction defect.
(Note: This summary applies to this bill as introduced.)