New Law Makes It Harder For Arizona Homeowners To Take Builders To Court

By Kristena Hansen
Published: Thursday, March 26, 2015 - 8:22am
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A bill was signed into law this week that’ll make it much more challenging for Arizona homeowners to sue builders for construction defects on their homes, a move that opponents say puts residents at a disadvantage while supporters say it’ll limit costly litigations for everyone involved.

Construction defects, such as cracked walls and floors or defective window seals, can be a big, expensive headache for homeowners, especially when the home is somewhat newer.

That’s what happened to 460 homeowners in a Sun City Grand community several years ago, and they sued the homebuilder, Del Webb Communities Inc. in 2008.

It was a lengthy courtroom battle, as these kinds of cases usually are, but the homeowners ultimately won a $13.6 million judgment against Del Webb last month after an Arizona Court of Appeals opinion.

Almost $6 million of that award went toward attorney’s fees and paying expert witnesses.

During a state Senate Commerce And Workforce Development committee hearing earlier this month, Stephen Weber, the homeowners’ attorney with Phoenix-based Kasdan Simonds Weber & Vaughan, said getting those costs covered as part of the judgement was essential.

 “Without that ability to recover those attorney’s fees, I would’ve had to tell these people, ‘There’s nothing you can do,’” Weber said.

But this week, Gov. Doug Ducey signed into law House Bill 2578, prevents homeowners from getting their attorney’s and expert witness fees covered should they win a case against a building for construction defects.

Had this law been in place beforehand, roughly $2 million would’ve been leftover for Weber’s clients, rather than the $7.8 million were awarded last month.

Also, the new law gives builders the right – not the opportunity, as it previously was - to make repairs before a lawsuit can be filed.

Spencer Kamps, vice president of legislative affairs for the Home Builders Association of Central Arizona, which lobbied for the bill, said goal was to reduce the number of frivolous lawsuits being filed.

 “Because when both parties are in court, nobody wins but the attorneys at the end of the day,” he said. Homeowners are tied up in court for years while they need repairs made to their home.”

Many states began passing construction defect laws in the 1990s. Back then, Kamps said homeowner complaints were on the rise and were being instigated by law firms, many located in California.

Kamps said Arizona’s new law merely strengthens the one the state passed several years ago.

“We’ve seen a significant uptick in these types of frivolous lawsuits brought by these California based firms in Arizona that result in ultimately great economic harm as it relates to insurance costs and other matters,” he said.

Several other states, such as Colorado, Florida and Nevada, are also in the process of tweaking their construction defect laws in similar ways, for similar reasons.

William Shore, an attorney and partner at Phoenix-based Burdman Law Group who represents homeowners in construction defect cases, said the “right to repair” piece of Arizona’s new law isn’t really an issue.

The issue is the fact that whatever money homeowners now could win in court will mostly get sucked up by attorney’s and expert witness fees and not much leftover for the actual repairs to their homes.

“This is very complicated litigation and in order to prove your case as a plaintiff, you have to hire experts in various fields who will say that builders or developers failed to meet the minimum workmanship requirements,” Shore said.

And that’s becomes very expensive, especially as these cases drag on, which means even legitimate cases probably won’t be worth it, he said.

“I dare say, the vast majority of individual homeowners in the state of Arizona have no idea about this law and what just happen,” he said. “But this is going to be an enormous problem for homeowners going forward.”

There are some instances where homeowners’ attorney’s fees could get covered, depending what the grounds are for the lawsuit. But Shore said that’ll probably be rare.

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