Opponents say a new Arizona law makes it much more difficult for homeowners to sue construction companies over faulty workmanship.
Lawsuits over construction defects like cracked foundations or drywall can take years to resolve, and legal fees for homeowners and builders can soar into the millions of dollars.
Gov. Doug Ducey signed legislation earlier this year which prevents homeowners from seeking reimbursement of their legal fees from builders. Under the old rules, the prevailing party in a construction defect lawsuit could petition the court to get their fees covered. The changes to Arizona’s Purchaser Dwelling Act took effect in July.
“They do this because they know that the average homeowner in Arizona can't afford to go after those big builders that pushed this law through,” said construction defect attorney Stephen Weber.
Weber said whatever award the homeowner might win in court will now be largely depleted by fees, all but ensuring many homeowners don’t file the cases to begin with.
“The homeowner will never be made whole,” he said.
The new law also gives builders the right, not the opportunity, to make repairs before a lawsuit is filed.
“It's the same step, except now they have to let them do repairs, which is what they’re suing about,” said attorney Holly P. Davies, who represents builders. “What's the hurdle?”
Supporters of the legislation say the new “right to repair” requirement ensures repairs get done quickly, and prevents frivolous lawsuits.
Davies said the old system encouraged attorneys for the homeowner to reject settlement offers and drag out cases.
“I think a lot of the time it was money driven. They believed they could get more if they kept going,” she said.
Several other states, including Colorado, Florida and Nevada, are also in the process of changing their construction defect laws for similar reasons.
But the case of Derek Niday and his mother, who purchased a newly built home in north Phoenix in 2005, illustrates the trouble with the compulsory repair system, Weber said.
After cracks in their foundation started appearing, the builder offered to fill the cracks with epoxy and re-tile their kitchen floor. But documents show the offered repair was far less significant and far less expensive than what the builder’s own engineer recommended: stitching the floor together with two-foot rebar.
“The substandard builders are using this law for their protection. They can come in and do a Band-Aid repair, get past the time limitation in the law, and then they're free and clear," Weber said.
Under the PDA, builders are only responsible for faulty workmanship within eight years of the home’s completion.
Weber said if Niday’s case were being litigated under the new rules, the builder would be allowed to make the simpler repair with potentially dire consequences for the family.
“The builder just glues the slab together as they were going to do here. Two years go by. It's now longer than eight years. The slab re-cracks, the tiles re-crack, and the builder has no liability whatsoever.”
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