Cause of action for negligent construction
SB 6385

Reason for the Bill

SB 6385 (The House Striking-Amendment H-5771.1) simply grants the same warranties and remedies to single family home buyers that the Legislature provided to condominium buyers in 1990. The bill establishes minimum and un-waiveable warranties that require construction professionals to adhere to industry standards, building codes and engineering requirements, all of which they are required to do anyway. For the first time, homeowners would have a means of compelling builders to fix defects or compensate them for damages due to their violation of the warranties. Almost all other states provide homeowners with a legal remedy when they are faced with violation of building codes or industry standards.

• The only way you can sue a builder under the current law is if the following requirements are met:
  • A homeowner must have contract with the builder that contains representations or warranties about the types of materials that will be used, standards or specifications for workmanship, or guidelines for evaluating the quality of work, which hasn’t been waived by the builder’s so called “warranty”
  • a clear breach of the contractual terms, including the nature of the defect
  • damages
  • a viable contractor that hasn’t gone out of business

Very few Washington homebuyers could ever meet the above requirements and the overwhelming majority of homebuyers would be left holding the bag for potentially hundreds of thousands dollars of costly repairs.

Who would this help?

Many homeowners’ horror stories have been reported by King 5 News, KOMO 4, the Seattle Post-Intelligencer, The Seattle Times and the Spokesman-Review. For example:

A Wenatchee family built their home in 1996; several years later, they hired a plumber to fix a slow-draining kitchen sink and discovered that sewer water had been leaking below their house for an unknown period of time, due to faulty construction. The home’s foundation had to be excavated and entirely rebuilt.

If the builder had built the home according to building codes and industry standards, family would not have had such a problem. Under SB 6385, this family could seek compensation for the damages if the builder did not satisfactorily remedy the problem. Under current law, they are totally without recourse.

Washington law exempts contractors, and only contractors, from claims based on negligence. All other industries, professionals and individuals, owe a duty of reasonable care to their clients. Not so with contractors or builders.

What the bill would do

• This bill employs the long-tested standards for construction of condominiums, and does not add any new obligations. It would force builders to be accountable for their work, and would encourage all contractors to adopt sound construction practices today, or be held liable for their mistakes tomorrow. This bill shifts the responsibility for shoddy construction where it belongs -- to the builder, not to the homebuyer.
   
• The bill gives homeowners the right seek compensation if they have purchased a home built with faulty construction practices after first giving the contractor “notice and an opportunity to cure”. Builders and those in the housing construction industry cannot waive their duty to build a quality home by requiring homebuyers to accept a so- called “builder’s warranty” which requires buyers to waive any other legal remedies available to them. In fact, one court in Olympia declared one of these “so called builder’s warranties” to be so unfair as to be unconscionable.

Builders claim that this bill will drive up their insurance rates. Currently, general contractors in Washington are required to purchase $250,000 in third party liability insurance, which doesn’t cover negligent construction. They are also required to purchase $12,000 in performance insurance, which doesn’t cover negligent construction. SB 6385 does not require them to purchase any additional insurance. If builders and contractors fix their shoddy construction there will be no claims.

Builders claim that this bill would result in frivolous lawsuits. No lawsuit can be filed until the builder has been given notice and an opportunity to fix the problem. A homeowner has no incentive to sue for frivolous or minor claims. Nor does a lawyer. With the bill’s attorney’s fee provision, a judge could award fees against a homeowner who files a frivolous claim. This will motivate everyone to work to resolve disputes without the need for lawsuits. The state’s “right to cure” requirement will encourage builders to use greater care when building homes, which is the primary purpose of this legislation.

• Many new homebuyers currently unknowingly sign away what little rights they have under the law by signing a so-called “homebuilder’s warranty.” These warranties often aren’t worth the paper they’re written on, and most expire after one year. This bill would enable homeowners to seek compensation for damages resulting from poor construction, regardless of any sham warranty offered; the builder owes the homeowner a duty of reasonable care, a duty which may not be waived.

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