By Steve Zurier. Home builder groups in Texas and Colorado are sponsoring legislation that would make it more difficult for consumers to file and collect damages on defects lawsuits. The builders blame these lawsuits for skyrocketing insurance premiums.
Legislation in Texas would create the Texas Residential Construction Commission, a nine-member panel that would resolve disputes before lawsuits are filed.
Under the proposal, a home buyer must request dispute resolution before filing a lawsuit. The commission would then appoint a certified inspector to investigate and make a recommendation. The builder and home buyer could appeal the inspector's report to the commission and still opt to file a lawsuit if they are not satisfied.
"The idea behind this legislation is not to slow down litigation," says Kristi Sutterfield, executive vice president of the Texas Association of Builders. "The goal is to give the homeowner and the home builder a way to get together in a cost effective manner to settle disputes." The group aims to get the bill on Gov. Rick Perry's desk by June 2. The governor then has 30 days to sign the legislation.
The bill in Colorado, supported by the Colorado Association of Home Builders, would make it more difficult for plaintiffs filing defects lawsuits to collect treble damages. At press time, the Colorado legislature was in conference, working on the House and Senate side bills. The Senate bill would put a cap on treble damages at $250,000, while the House bill would have no cap, but give judges--and not juries--the power to rule if a builder acted fraudulently. The trade group expects a decision on the bill before this year's legislative session ends May 8.