State and Local Issues: Construction Defect Litigation

The threat of litigation can add unnecessary risk to every project and hinders development. NAHB’s State and Local Issues Fund (SLIF) has supported HBAs that seek to add fairness to heavily litigious environments by advocating for alternatives to costly trials such as mediation and repair options.

Legislation Reform

Builder Association of Northern Nevada (Reno, Nev.)

In response to homes built too quickly with unskilled labor, the state of Nevada passed a law enticing home owners and builders to work together on repairs prior to initiating a lawsuit. Under the current law homeowners can recover fees during the investigation process. In addition, even is one defect is recovered, attorneys have 100% of their fees reimbursed. Since the law is set up so plaintiff and attorneys have nothing to lose, litigation in construction defects has increased. SLIF funding would help retain experts to help change the law and coordinate coalition efforts.

Estimated project cost: $300,000
Funding requested: $20,000

Housing Opportunity Alliance

Colorado Association of Home Builders (CAHB)

The construction of for sale condominiums in Colorado has been in drastic decline because of the threat of construction defects litigation. In response, The HBA board of directors made the passage of a pro-active construction defects bill its top priority. CAHB has formed a Construction Defect Task Force comprised of attorneys and builders that has donated in excess of $100,000 worth of pro-bono time to this effort. SLIF funding will help with lobbying and communication efforts.

Project cost: $100,000
Funding requested: $20,000

Fixing Florida’s Right to Cure Statute

Florida Home Builders Association (FHBA)

Florida’s “Notice and Right to Cure” law was created as an alternative method to resolve construction disputes. Despite the statute, attorneys often pursue litigation and reject offers to repair. In some cases, homeowners are not informed of home builders offers to fix the issue. The FHBA will use SLIF funds to advance legislation that would require a home owner to sign an affidavit refusing an offer to repair and add a pre-suit mediation to the right to cure statute.

Estimated project cost: $58,500
Funding request: $15,000