Washington Homeowner Rights Bill: Contact Your Legislator Now

Posted on March 28, 2009 by Daniel Zimberoff

Engrossed Second Substitute House Bill 1393 (ESSB 1393) is currently under consideration by the House Ways & Means Committee.  The Bill is drafted to address real property construction improvements through "consumer education, warranty protections, contractor registration requirements, and worker certification standards."

This Bill would create an "Office of Consumer Education for Home Construction" under the guidance of the Attorney General's Office.  This new office would become a resource for consumers and would also receive and monitor complaints against residential construction contractors.
Another consumer protection provision of the Bill includes the creation of a "Home Construction Board." This Board would act as a mediator between owners and residential contractors when disputes arise.  As drafted, a property owner seeking recourse would be required to comply with the procedures before commencing litigation.  The make-up of the board as proposed seems a bit weighted in favor of industry insiders, but the concept is very promising, particularly for small disputes that are ill-suited for more formal dispute resolution procedures.
The Bill would also modify the common law implied warranty habitability.
   
There is also an express warranty provision that would require certain minimum standards in all contracts for the sale or construction of new residential property including:
  • One-year warranty against defects in workmanship and materials;
  • Two-year warranty against defects in the wiring, piping and ductwork in the electrical, plumbing, heating, cooling, ventilating, and mechanical systems;
  • Four-year warranty against damage to basement slabs; and
  • 10-year warranty for structural defects.
The need for consumer protection in residential construction has been required for years.  Currently, a Washington consumer has more protection buying a toaster in this state than a home.
We recommend all Washington residents contact their legislators in support of this Bill.  Whether you are in the market for a new home today or sometime in the future, shouldn't that home meet at least some minimum performance standards?  Contact your legislators today (find your legislators here)--do not let the Building Industry Association of Washington (BIAW) kill this vital piece of litigation.

 

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HR 1106 Passed by House

Posted on March 10, 2009 by Daniel Zimberoff

On March 5, 2009, HR 1106: "Helping Families Save Their Homes Act of 2009" was approved (234 to 191) by the U.S. House of Represetnatives and is now off to the Senate for debate and vote.  There is a companion bill in the Senate that is concurrently being debated.

If you have concerns related to the possible adverse impact of the bill upon condominium and homeowner associations, contact your Senator.  For further details, see my March 5th Blog post below.

 

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Legislative Alert: Contact Your Congressperson Today!

Posted on March 5, 2009 by Daniel Zimberoff

This week, Congress is scheduled to vote on H.R. 1106: "Helping Families Save their Home Act of 2009."  I urge all owners who live in homeowner associations to call  or email their Congressperson and tell them to oppose this legislation as it is currently written.

Part of President Obama’s plan to stabilize the housing markets, H.R. 1106 would allow federal courts to reform mortgages in cases where a homeowner’s property is worth less than their principle mortgage balance. It would give bankruptcy judges the ability to ‘cram down’ the principal balance and monthly payments, wiping out tens or even hundreds of thousands of dollars of money owed. In addition to allowing courts to rewrite private mortgages, the legislation as written could also allow the courts to bypass state assessment lien and priority lien statutes, thereby eliminating the already limited ability for a community association to collect past due assessments from these properties.

Each year, residents of community associations assess themselves close to $80 billion dollars to pay for the maintenance, improvements and amenities in their communities. These assessments help preserve property values and provide infrastructure that would otherwise become the responsibility of state or local governments. When buying into a community association, home buyers agree to pay their share of the community operating costs.

If passed as written, H.R. 1106 could:

  • Impact an association’s ability to recover delinquent homeowners’ assessments and, potentially, affect future assessment obligations to the community.
  • Bypass state statutes that provide a priority lien or assessment lien for past due association assessments.
  • Cause additional strain on the housing market by forcing non-foreclosed homeowners to pay higher fees to cover mandatory operating expenses, pushing more homeowners into financial distress.
  • Cut funds available to maintain common areas of the community, resulting in a spiral of deteriorating infrastructure, lower property values and, ultimately, higher financial burdens on state and local governments.
  • Undermine, if not unravel, the benefits of common ownership communities by exempting some homeowners from the obligation to pay their fair share to support common elements of the community, potentially leading to the bankruptcy of the communities themselves.

The critical nature of requiring all owners to pay their fair share of association assessments is recognized in the current bankruptcy code under 11 U.S.C. 523(a) (16) and various state-imposed assessment lien regimes. To protect the vast majority of responsible homeowners, legislation addressing mortgage modification must explicitly protect an association’s right to recover funds owed to the community by a delinquent homeowner.

If passed as written, this legislation would have a direct detrimental impact on the responsible residents of community associations. Please take action today by contacting your Congressman or Congresswoman.

 

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