Ariz. Enacts Law to Lessen Construction Defect Lawsuits

Arizona’s governor signed a bill recently that will establish an alternative dispute resolution procedure for certain construction defect claims, providing a modicum of relief to a beleaguered construction industry, according to the Alliance of American Insurers.

“The new law is a good first step, and we commend Gov. Jane Dee Hull (R) for signing it into law,” Sarah White, a policy manager in AAI’s P/C department, remarked. “However, because the law’s provisions apply only to multi-unit dwellings, it doesn’t go as far as our members would like. That said, the law does provide incremental relief for contractors and insurers who are plagued with construction defect litigation costs, and the Alliance will use it as a building block for more meaningful reform in future sessions.”

The law, HB 2620, creates a notice and opportunity to cure procedure prior to filing suit against a construction professional in multi-unit dwelling actions. The notice must be provided 90 days before filing suit, the inspection must take place within 10 days and the seller has 60 days to respond. Further, the purchaser can amend the original notice during the ninety-day notice period.

The bill also awards attorneys fees, costs and reasonable expert witness fees to the successful party. The purchaser is the successful party if the final judgment is more than the seller’s best or final offer and the seller is the successful party if the award is less.

Finally, the buyer of the dwelling still has the right to file a written complaint against the homebuilder with the Arizona Registrar of Contractors and any written contract for the sale of a newly constructed dwelling must contain notice of the buyer’s right to file the complaint.

Topics Lawsuits Construction Arizona