HSB 177

The bill provides that if a claimant files an action alleging a construction defect without first complying with the requirements of the bill, the court shall stay the action without prejudice until the requirements have been met. The bill sets forth specific time frames for each part of the dispute resolution. The bill provides that the claimant shall serve written notice of a construction defect claim on the general contractor and subcontractor. In the notice, the claimant shall refer to the new Code chapter and describe the claim in reasonable detail sufficient to determine the general nature of each alleged construction defect, provide a description of the damage or loss resulting from the defect, if known, and describe any work or inspections completed to determine the cause of the damage or loss or correct the construction defect. The bill provides that after being served with the notice of claim, the person is entitled to perform a reasonable inspection of the property or of each unit subject to the claim to assess each alleged construction defect. _____ hours to inspect the property to determine the nature and cause of each alleged construction defect and the nature and extent of any repairs or replacements necessary to remedy each construction defect. The bill provides additional details, including providing for destructive testing. The bill provides that the general contractor or subcontractor may serve a copy of the notice of claim to each subcontractor or general subcontractor whom the general contractor or subcontractor reasonably believes is responsible for each construction defect specified in the notice of claim. The bill provides that subcontractors shall be entitled to inspect in the same manner as general contractors. The general contractor or subcontractor must then serve a written response, which shall include a report, if any, of the scope of any inspection of the property, the findings and results of the inspection, a statement of whether the general contractor or subcontractor is willing to make repairs to the property or whether such claim is disputed, a description of any repairs they are willing to make, and a timetable for the completion of the repairs. This response may also be served on the initial claimant by the general contractor. The bill provides that the person who was served the notice must serve a written response to the claimant. The bill provides that the written response must fall into one of five categories, which are laid forth in the bill. If the person served with a notice of claim disputes the claim and will neither remedy the construction defect nor compromise and settle the claim, or does not respond to the claimant’s notice of claim within the time provided in the bill, the claimant may, without further notice, proceed with an action against that person for the claim described in the notice of claim. _____ offer within the time period set forth in the bill after receiving the settlement offer. The bill specifies that if a claimant initiates an action without first accepting or rejecting the offer, the court shall stay the action upon timely motion until the claimant complies with the requirement. The bill provides that if the claimant timely and properly accepts the offer to repair an alleged construction defect, the claimant shall provide the offeror and the offeror’s agents reasonable access to the claimant’s property during normal working hours to perform the repair by the agreed-upon timetable as stated in the offer. If the offeror does not make the payment or repair the construction defect within the agreed time and in the agreed manner, except for reasonable delays beyond the control of the offeror, the claimant may, without further notice, proceed with an action against the offeror based upon the claim in the notice of claim. If the offeror makes payment or repairs the defect within the agreed time and in the agreed manner, the claimant is barred from proceeding with an action for the claim described in the notice of claim or as otherwise provided in the accepted settlement offer. The bill does not bar or limit any rights, including the right of specific performance to the extent such right would be available in the absence of the new Code chapter, any causes of action, or any theories on which liability may be based, except as specifically provided in the bill. Additionally, the bill does not bar or limit any defense, or create any new defense, except as specifically provided in the new Code chapter. Finally, the bill does not create any new rights, causes of actions, or theories on which liability may be based. The bill provides that to the extent that an arbitration clause in a contract for the sale, design, or construction of real property conflicts with the bill, the bill shall control.