The five bills would close loopholes used by builders and their insurers to defeat claims of shoddy construction under the state's Home Warranty Law, bill sponsors and consumer advocates told the Labor and Consumer Protection Committee in a hearing.
A builders group called the changes unwise, and some legislators expressed concerns about some language, but the committee advanced the five as a package to the House Commerce and Labor Committee.
Minnesota law requires building and renovation contractors to provide warranties against major construction defects for 10 years.
"But many homeowners feel like the deck is stacked against them," said Rep. Steve Simon, DFL-St. Louis Park, who is coordinating work on the bills. Among the proposed changes:
Allow homeowners to call builders with complaints. The law now requires written notice.
Extend from six months to a year the time homeowners have to make claims after they discover a problem.
Require builders to cover the cost of temporary housing if a family has to leave their home.
Require builders to pay the legal costs of a homeowner who wins a warranty case against them. Now, the expenses of suing cause many homeowners to accept low insurance settlements, according to Patrick Lee-O'Halloran, another Minneapolis attorney.
Shoreview homeowner Ed Seifert told the committee that that's what happened to him, after construction problems led to water damage in his home. He started a lawsuit, but long delays caused him to accept a settlement of $151,000, $77,000 less than his repairs and legal costs.
Pam Perry Weaver, executive vice president of the Builders Association of Minnesota, argued that dropping the required written notification "eliminates a trap but sets others."
The lack of a paper trail is never wise, Weaver said.
Minneapolis attorney Scott Andresen told the story of one client, in support of the change: The client called his builder with a warranty claim. The builder agreed that he should pay, but because of the large sum of money involved, he referred the claim to his insurer. The insurer denied it, for lack of a written complaint.
"There was no question the builder had notice," Andresen said. "The typical homeowner is not a lawyer, and the typical homeowner does not want to hire a lawyer."
Weaver and several legislators also expressed concerns that the temporary-housing language clearly stipulate how bad a problem must be and how expensive the family's housing choice can be.
H.J. Cummins 612-673-4671