ARIZONA STATE SENATE
Phoenix, Arizona
REVISED
Purpose
Outlines a procedure for notice of an alleged defect by a buyer and opportunity to repair the alleged defect by the seller before the filing of a purchaser dwelling action.
Currently, a purchaser of a single family home or a condominium unit may file a complaint with the Office of the Registrar of Contractors against a prime contractor or subcontractor, architect, engineer or other construction personnel within two years of completion of the home or repairs to the home.
H.B. 2620 provides an opportunity for the seller to make repairs prior to the purchaser filing a civil lawsuit and outlines proper notice requirements and timeframes.
There is no anticipated fiscal impact to the state general fund associated with this legislation.
1. Specifies required time limits and notification processes for the seller and purchaser prior to filing a dwelling action:
a) At least 90 days before filing a dwelling action, the purchaser shall provide written notice and opportunity to repair to the seller.
b) No later than 10 days after notice, the purchaser shall ensure dwelling is available for inspection.
c) Within 60 days after receipt of notice, the seller shall provide a good faith response, including any offer to repair or replace and a reasonable date for completion.
d) Within 20 days after receipt of seller’s offer, the purchaser shall either accept purchaser’s offer, reject offer or provide a counteroffer.
e) Within 10 days after receipt of purchaser’s response, seller may make a best and final offer.
2. Allows the seller to inspect the dwelling after receiving notification of defects to determine the extent and cause of defects.
3. Requires seller to restore dwelling to its pretesting condition if testing is involved.
4. Prohibits the inclusion of a purchaser’s good faith notice, a seller’s good faith response, a purchaser’s good faith response made to a seller’s offer, a purchaser’s good faith counteroffer or a seller’s good faith best and final offer in any dwelling action.
5. Allows, in any dwelling action, the admission of:
a) Purchaser’s failure to provide a good faith notice.
b) Purchaser’s failure to allow a reasonable inspection.
c) Purchaser’s failure to provide a good faith written response to seller’s offer.
d) Seller’s failure to respond in good faith to the purchaser’s notice.
6. Allows purchaser to amend the notice to include subsequently discovered defects.
7. Tolls the statute of limitations for filing a dwelling action until 90 days after the seller receives notice or a reasonable time period agreed to by the parties.
8. Requires the court to award attorney’s fees, expert witness fees and taxable costs to a successful party in a contested dwelling action. To be deemed a successful party, a seller must win at trial or be liable for less than his final offer to the purchaser to settle the matter. To be deemed a successful party, a purchaser must be awarded more than he was offered to settle by the seller.
9. Requires a contract for a newly constructed dwelling to provide notice of a buyer’s right to file a complaint against the homebuilder with the Registrar of Contractors.
10. Allows a court to stay action for 90 days, if a purchaser files a dwelling action without first complying with this act.
11. Requires a court to stay action 90 days if a purchaser files a multiunit dwelling action without first complying with this act, absent a showing of good cause.
12. Outlines excluded claims and actions.
13. Applies provisions to homeowners’ association dwelling actions.
14. Contains definitions.
15. Provides for a general effective date.
Amendments Adopted by Committee
1. Eliminates the admissibility of rebuttable presumptions and instead allows certain evidence of failing to act in good faith by either party to be admitted into evidence if a dwelling or multidwelling action proceeds to trial.
2. Allows dwelling actions to be stayed for 90 days if the purchaser has not followed the procedures required by this act, but requires multidwelling actions to be stayed for 90 days.
3. Reduces timeframes for required notification processes.
4. Clarifies provision that allows a purchaser to amend the action to include subsequently discovered alleged defects.
5. Provides for successful party to recover attorneys’ fees, expert witness fees and costs.
6. Requires a contract for a newly constructed dwelling to provide notice of a buyer’s right to file a complaint against the homebuilder with the Registrar of Contractors.
House Action Senate Action
CED 3/18/02 DPA 6-2-2-0 JUD 4/23/02 DPA 7-0-1-0
3rd Read 4/9/02 46-7-6-1
Prepared by Senate Staff
April 24, 2002