2006 MN HOMEOWNER PROTECTION BILLS
Supported by Minnesota Homeowners

Once again water intrusion damage and toxic mold in homes, caused by construction defects, has grabbed the attention of the media.  People all across the State have had severe housing problems, and even more problems attempting to get builders to make necessary repairs and the insurance companies to pay for those repairs.  It normally takes years, and in the meantime, peoples’ health, safety, and property remain compromised, their lifetime dream shattered and their finances ruined.  These three bills provide help for homeowners impacted by construction defects and are supported by Minnesota Homeowners. 

The provisions in the first two bills are a result of several meetings with homeowners, city building inspectors, home inspectors, engineers, attorneys who work with homeowners; an attorney who works for both builders and homeowners; state agency personnel; and the Revisor’s Office.

HF3558/SF3234

Chief Authors:  Representative Barb Goodwin and Senator Ellen Anderson

CORPORATE AND LLC DISSOLUTION LOOPHOLE REMEDIED

On November 23, 2005, the Minnesota Supreme Court upheld that the Corporate Dissolution Statute reduced liabilities (302A.7291) over the 327A statutory ten year home warranty.  In the decision, the Court made it clear that they felt for the plaintiffs, but it was up to the Legislature to make clear if it wanted a builder’s warranty obligations to survive dissolution.  This bill does just that.

As it applies to builders/homeowners, the Corporate Dissolution Statute allows a builder to incorporate or form an LLC, build a house (or an entire development) and then file a Notice of Intent to Dissolve.  The builder’s liability would be limited to two years from the date of filing the Notice, even if it is only 2 years (or 3, 4, 5, etc,) from the date the house was constructed.  This essentially takes the 10 year warranty required by 327A and allows the builder to unilaterally shorten the warranty period by filing a Notice with the Secretary of State, without ever telling homeowners.  A builder could then start a new corporation and continue building more homes.  It should be noted that all other business entities have to comply with the (327A) 10 year statutory warranties. 

HF3559/SF3263

Chief Authors:  Representative Barb Goodwin and Senator Larry Pogemiller

ATTORNEY FEES BILL

When a homeowner cannot get the builder or the builder’s insurance company to cover their losses, they need to hire an attorney.  Attorney costs can exceed or eat up any settlement and the homeowner can be stuck with repair costs.  The repair costs can easily exceed a hundred thousand dollars (100K) for a typical repair.  Insurers and builders usually slow the settlement, knowing the homeowner will be paying attorney fees and eventually settle for less.  This bill will provide attorney fees as part of the settlement and bring an end to the discrimination against single family homes.  MN Statute 515B, the MCIOA bill allows attorney fees, costs and expenses and even punitive damages for “attached” homes.  In addition 327A will stand, as it should, as a consumer protection bill with the appropriate remedies of such bills.

 HF2578/SF2361

Chief Authors:  Representative Joe Mullery and Senator Larry Pogemiller

ELIMINATION OF CREDIT SCORE USE OR HISTORY BY THE INSURANCE INDUSTRY

Homeowners support all efforts to eliminate the use of credit scores and history by insurance companies in underwriting auto and homeowner insurance policies.  For homeowners who have had devastating losses due to construction defects and have incurred substantial personal liabilities, a foreclosure or bankruptcy action, the use of credit scores to set policy premiums for automobiles and homes is extraordinarily unfair to homeowners.  Homeowners face life long financial impacts from construction defects to their home through no fault of their own and should not be penalized for situations out of their control.