ARIZONA STATE SENATE
Phoenix, Arizona
Purpose
Provides notice
of and a right to cure an alleged construction defect to the parties against
whom a construction defect claim has been alleged for properties that were
converted from a multifamily rental to condominiums.
Background
Often a multifamily rental property, commonly referred to as an apartment complex, is sold to another developer who in turn converts the development from a “for rent” apartment complex to an “owner occupied” condominium complex. It has been common practice for construction damage lawsuits to be filed by community associations against all parties in the chain of ownership, including the original developer whose project was sold and later converted to a condominium by a subsequent owner. In addition, such lawsuits are often filed without identifying specific defects, which provides no opportunity for the original property developer, builder, contractor, subcontractor or other affected parties to evaluate the merits of the claim or to cure any defects that may exist.
S.B. 1197 gives notice of and a right to cure an alleged construction defect to the developer, builder, contractor, subcontractors and any other party against whom a construction defect claim has been alleged for properties that were originally developed as multifamily rental and later converted to condominiums by a subsequent owner.
There is no anticipated fiscal impact to the state general fund associated with this measure.
Provisions
1. Provides that for any action that alleges defects in construction, workmanship or materials in real property that was converted from a multifamily rental to condominiums, the following apply:
a) requires a plaintiff to give written notice of a claim describing the alleged defects at least 120 days before filing an action to the developer, builder, contractor, subcontractor and other parties against whom the claim is alleged.
b) provides the parties against whom the claim is alleged the right to cure the alleged defects during the 100 days after receipt of notice of the claim.
2. Specifies that the failure by a plaintiff to give notice of a claim or allow access to the real property to cure the alleged defects constitutes an affirmative defense of waiver to those claims.
3. Specifies that a defendant in a civil action who was not given the opportunity to cure and who succeeds on the affirmative defense of waiver shall recover attorney fees and court costs.
4. Provides for a general effective date.
Prepared by Senate Staff
February 8, 2002