Senate File 279 - Introduced
SENATE FILE
BY IVERSON
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to an alternative dispute resolution process in a
2 residential construction defect case and including a mediation
3 provision.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 2692XS 81
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PAG LIN
1 1 Section 1. NEW SECTION. 657B.1 PURPOSE == APPLICABILITY.
1 2 This chapter establishes a nonadversarial procedure to
1 3 resolve disputes between builders and claimants which, if the
1 4 procedure does not resolve a dispute between such parties, may
1 5 result in the filing of a lawsuit. A builder may elect to
1 6 resolve a dispute through alternative nonadversarial
1 7 provisions contained in the sales agreement between the
1 8 parties, but shall not require adherence to such alternative
1 9 nonadversarial provisions.
1 10 Sec. 2. NEW SECTION. 657B.2 DEFINITIONS.
1 11 For the purposes of this chapter, the following definitions
1 12 shall apply:
1 13 1. "Builder" means a builder, developer, or original
1 14 seller of a new residential unit that is sold on or after July
1 15 1, 2005.
1 16 2. "Claimant" includes an individual owner of a single=
1 17 family home, an individual unit owner of an attached dwelling,
1 18 and, in the case of a common interest development, an
1 19 association.
1 20 3. "Residence" means a single=family house, duplex, or
1 21 multifamily unit designed for residential use and shall
1 22 include other structures appurtenant to the house, duplex, or
1 23 multifamily unit.
1 24 Sec. 3. NEW SECTION. 657B.3 NOTICE OF CLAIM.
1 25 1. Prior to filing an action for recovery of damages
1 26 arising out of, or related to deficiencies in, the residential
1 27 construction, design, specification, survey, plan,
1 28 supervision, testing, or observation of construction against a
1 29 builder, a subcontractor, material supplier, individual
1 30 product manufacturer, or design professional, the claimant
1 31 shall provide written notice by certified mail, overnight
1 32 mail, or personal delivery to the builder that the
1 33 construction design, specifications, survey, plan,
1 34 supervision, testing, or observation of construction of the
1 35 claimant's residence is deficient or violates the applicable
2 1 housing code or city ordinance. The notice shall state the
2 2 claimant's name, address, and contact information, and shall
2 3 describe the nature of the claim in sufficient detail in order
2 4 to determine the nature and location of the alleged violation.
2 5 The document shall have the same force and effect as a notice
2 6 of commencement of a lawsuit.
2 7 2. The notice requirements of this section do not preclude
2 8 a claimant from seeking redress through a customer service
2 9 procedure set forth in a contract, warranty, or other document
2 10 generated by the builder.
2 11 Sec. 4. NEW SECTION. 657B.4 RECEIPT OF CLAIM ==
2 12 ACKNOWLEDGEMENT.
2 13 Within fourteen days of receipt of a claimant's notice of
2 14 claim, the builder shall provide a written acknowledgement of
2 15 receipt of the claim.
2 16 Sec. 5. NEW SECTION. 657B.5 BUILDER RESPONSE TO CLAIMANT
2 17 REQUEST.
2 18 1. Within thirty days of receipt of a claimant's notice of
2 19 claim, the builder shall provide all of the following to the
2 20 claimant:
2 21 a. A copy of the relevant plans, including grading plans,
2 22 specifications, final soil reports, and engineering
2 23 calculations prepared for the claimant's residence.
2 24 b. A copy of any maintenance recommendation including a
2 25 preventative or manufactured product maintenance
2 26 recommendation, and limited warranty information including the
2 27 builder's limited contractual warranties in effect at the time
2 28 of the original sale of the claimant's residence.
2 29 2. A builder who does not comply with subsection 1 shall
2 30 not be entitled to the protection of this chapter.
2 31 Sec. 6. NEW SECTION. 657B.6 BUILDER INSPECTION AND
2 32 TESTING.
2 33 1. A builder who elects to inspect a claimed deficiency
2 34 shall complete the inspection and testing of the claimant's
2 35 residence within fourteen days after acknowledgement of
3 1 receipt of the notice of the claim. The costs of the
3 2 inspection and testing shall be paid by the builder. The
3 3 builder shall also provide written proof that the builder is
3 4 adequately covered by liability insurance to cover damages or
3 5 injuries that may occur during inspection and testing. If
3 6 destructive testing is required, the builder shall, within
3 7 forty=eight hours after completion of the testing, restore the
3 8 residence to its pretesting condition.
3 9 2. A builder who intends to hold a subcontractor, design
3 10 professional, product manufacturer, or material supplier
3 11 responsible for any claimed deficiency shall provide notice to
3 12 the appropriate person or entity to allow the person to attend
3 13 the inspection and testing and to allow the person to
3 14 participate in the repair process.
3 15 Sec. 7. NEW SECTION. 657B.7 OFFER TO COMPENSATE OR
3 16 REPAIR.
3 17 1. Within thirty days of the inspection and testing, the
3 18 builder may offer in writing to repair a deficiency, which
3 19 shall include all of the following:
3 20 a. An offer to compensate the claimant for damages
3 21 recoverable at law.
3 22 b. A detailed statement identifying the particular
3 23 deficiency being repaired, an explanation of the nature,
3 24 scope, and location of the repair needed, and a reasonable
3 25 estimate of the completion date.
3 26 c. The names, addresses, and telephone and license numbers
3 27 of the contractors or subcontractors who will perform the
3 28 repairs. Such contractors shall provide proof of insurance
3 29 and shall be responsible for all damages or injuries that may
3 30 occur during the repair period.
3 31 d. A mediation provision subject to the provisions of
3 32 section 657B.8.
3 33 Sec. 8. NEW SECTION. 657B.8 MEDIATION == EFFECT ON OFFER
3 34 TO REPAIR.
3 35 1. A mediation conducted pursuant to this section shall
4 1 occur within fifteen days after the request for mediation is
4 2 received, shall not exceed four hours in length, and shall be
4 3 conducted before an impartial mediator selected and paid for
4 4 by the builder, or jointly selected and paid for by the
4 5 builder and the claimant.
4 6 2. If a builder has made an offer to repair pursuant to
4 7 section 657B.7 and the dispute has been submitted to mediation
4 8 that failed to resolve the dispute, the claimant shall allow
4 9 the repair to be performed by the builder or the builder's
4 10 designee.
4 11 Sec. 9. NEW SECTION. 657B.9 REPAIRS.
4 12 1. If a claimant accepts a builder's offer to repair, the
4 13 builder shall make the appropriate arrangements to effectuate
4 14 a repair of the claimed deficiencies and compensate the
4 15 claimant for damages resulting from the repair.
4 16 2. A repair shall occur within fourteen days of acceptance
4 17 of the offer to repair, within seven days of the completion of
4 18 a successful mediation, or within five days after a permit is
4 19 obtained.
4 20 Sec. 10. NEW SECTION. 657B.10 BUILDER COMPLIANCE.
4 21 If a builder fails to comply with the requirements of this
4 22 chapter, a claimant may file a lawsuit against the builder.
4 23 EXPLANATION
4 24 This bill relates to an alternative dispute resolution
4 25 process in a residential construction defect case and includes
4 26 a mediation provision.
4 27 The bill requires a claimant to provide written notice to a
4 28 builder responsible for a construction defect in or around a
4 29 claimant's residence before initiating a lawsuit against the
4 30 builder allowing the builder the opportunity to repair the
4 31 defect or reach a monetary settlement, or both, with the
4 32 claimant. After service of the notice and any relevant
4 33 inspection or testing, a builder may serve on the claimant a
4 34 written response offering compensation and repair of the
4 35 defect. If the builder rejects the claim, refuses to remedy
5 1 the defect within the time periods specified in the bill, or
5 2 otherwise fails to comply with the requirements of this Act,
5 3 the claimant may file a lawsuit against the builder.
5 4 LSB 2692XS 81
5 5 rh:nh/pj/5