United States: Bills Pending at the Legislative Assembly

The Oregon Legislative Assembly is considering several bills that, if passed, could affect YOU:

SB 2525 would amend Oregon’s still relatively new notice of defect law for residential homes. Under the amendment, an owner that rejects an offer of a contractor (or a subcontractor or supplier) to repair a home would be prohibited from recovering against the contractor in an arbitration or court action. The limitation would only apply with respect to the defects the contractor offered to repair. This would be a very important benefit to homebuilders. Remember, however, that Oregon’s notice of defect law contains some very strict deadlines for responding to owner notices. For example, you have 14 days to respond to the first notice. If you do not respond in time to a notice of alleged defects, you can lose your rights!

SB 514 would eliminate the requirement that contractors licensed by the Construction Contractors Board have public liability, personal injury and property damage insurance. This would eliminate a very significant cost of doing business. One potential pitfall is that a source of funding for the legal defense of construction defect claims could be lost. Often, an insurer will pay for a lawyer, even if the claim itself is not covered by the policy.

The OHBA has also been hard at work on Senate Bills 463, 464 and 465. SB 463 would require that all construction defects go to arbitration, instead of a jury trial. (You could still appeal the arbitration award and get your day in court.) The exception for personal injury claims means that people who claim they became sick from mold exposure would not need to go to arbitration first.

SB 464 would allow contractor or subcontractor to designate an insurer to be responsible for defending and indemnifying the contractor from the time a notice of defect claim forward. Some insurers prefer to wait until litigation is filed, and this bill would change that.

SB 465, and the Association of General Contractors’ proposed bill, HB 3158, would reduce the time in which suit must be brought for most construction defect claims from 10 years to six. This is important, because many lawsuits – especially those concerning EIFS – continue to be filed for homes that were built in the mid-1990’s. The main difference between the two pending bills is that the senate bill would involve all claims, including those that arose before the date of the act. The house bill would only affect claims arising after the act becomes effective. Let’s see if one of them passes.

Copyright Home Building News 2005

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