HB3744 99TH GENERAL ASSEMBLY

LRB099 07357 HEP 27471 b

99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB3744

Introduced , by Rep. Ron Sandack

SYNOPSIS AS INTRODUCED:

New Act

Creates the Notice and Opportunity to Repair Act. Contains legislative findings and defines terms. Requires the service of notice to a construction professional of the complained-of defect in the construction by the homeowner prior to commencement of a lawsuit. Allows the professional to make an offer of repair or settlement and to rescind this offer if the claimant fails to respond within 30 days. Requires the claimant to file with the court a list of known construction defects. Directs the professional to provide a statutory notice to the homeowner upon the execution of a contract.

A BILL FOR

AN ACT concerning real estate.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Notice and Opportunity to Repair Act.

Section 5. Findings; purpose.

(a) The General Assembly finds that limited changes in the law are necessary and appropriate concerning actions claiming damages, indemnity, or contribution in connection with alleged residential construction defects.

(b) It is the purpose of this Act to implement the changes identified in subsection (a) while preserving adequate rights and remedies for property owners who bring and maintain actions alleging residential construction defects.

Section 10. Definitions. In this Act:

"Action" means any civil lawsuit or action in contract or tort for damages or indemnity brought against a construction professional which asserts a claim, whether by complaint, counterclaim, or cross-claim, for the damage or loss of the use of real or personal property caused by a defect in the construction of a residence or in the substantial remodel of a residence. "Action" does not include any civil action in tort alleging personal injury or wrongful death to a person or persons resulting from a construction defect.

"Claimant" means a homeowner who asserts a claim against a construction professional concerning a defect in the construction of a residence or in the substantial remodel of a residence.

"Construction professional" means any person performing or furnishing the design, supervision, inspection, construction, or observation of the construction of any improvement to real property, whether operating as a sole proprietor, partnership, corporation, or other business entity, and includes, but is not limited to, an architect, builder, builder-vendor, contractor, subcontractor, engineer, or inspector.

"Homeowner" means any person, company, firm, partnership, corporation, or association who contracts with a construction professional for the construction, sale, or construction and sale of a residence. "Homeowner" includes, but is not limited to, a subsequent purchaser of a residence from any homeowner.

"Residence" means a single family house, duplex, triplex, quadraplex, or a unit in a multiunit residential structure in which title to each individual unit is transferred to the owner under the Common Interest Community Association Act or the Condominium Property Act and includes general and limited common elements as defined in the Condominium Property Act.

"Serve" or "service" means personal service or delivery by certified mail to the last known address of the addressee.

"Substantial remodel" means a remodel of a residence for which the total cost exceeds the maximum amount for a small claim under Supreme Court Rules.

Section 15. Applicability.

(a) This Act:

(1) applies to any claim that arises before, on, or after July 15, 2016, as the result of a construction defect, except a claim for personal injury or wrongful death, if the claim is the subject of an action commenced on or after July 15, 2016; and

(2) prevails over any conflicting law otherwise applicable to the claim or cause of action.

(b) This Act does not:

(1) bar or limit any defense otherwise available except as otherwise provided in this Act; or

(2) create a new theory upon which liability may be based.

(c) This Act does not apply if a construction professional certifies to a claimant that immediate repairs are necessary in order to avoid an imminent health or safety problem or in order to avoid material additional damage to the property.

Section 20. Notice of claim of construction defects; response by construction professional.

(a) In every construction defect action brought against a construction professional, the claimant shall, before filing an action, serve written notice of claim on the construction professional. The notice of claim shall state that the claimant asserts a construction defect claim against the construction professional and shall describe the claim in reasonable detail sufficient to determine the general nature of the defect.

(b) Within 21 days after service of the notice of claim, the construction professional shall serve a written response on the claimant by registered mail or personal service. The written response shall:

(1) propose to inspect the residence that is the subject of the claim and to complete the inspection within a specified time frame and shall include a statement that the construction professional will, based on the inspection, offer to remedy the defect, compromise by payment, or dispute the claim;

(2) offer to compromise and settle the claim by monetary payment without inspection, which may include, but need not be limited to, an express offer to purchase the claimant's residence that is the subject of the claim and to pay the claimant's reasonable relocation costs; or

(3) state that the construction professional disputes the claim and will neither remedy the construction defect nor compromise and settle the claim.

(c) If the construction professional disputes the claim or does not respond to the claimant's notice of claim within the time stated in subsection (b), the claimant may bring an action against the construction professional for the claim described in the notice of claim without further notice.

If the claimant rejects the inspection proposal or the settlement offer made by the construction professional pursuant to subsection (b), the claimant shall serve written notice of the claimant's rejection on the construction professional. After service of the rejection, the claimant may bring an action against the construction professional for the construction defect claim described in the notice of claim. If the construction professional has not received from the claimant, within 30 days after the claimant's receipt of the construction professional's response, either an acceptance or rejection of the inspection proposal or settlement offer, then at any time thereafter the construction professional may terminate the proposal or offer by serving written notice to the claimant, and the claimant may thereafter bring an action against the construction professional for the construction defect claim described in the notice of claim.

(d) If the claimant elects to allow the construction professional to inspect the residence in accordance with the construction professional's proposal pursuant to subdivision (b)(1) of this Section, the claimant shall provide the construction professional and its contractors or other agents reasonable access to the claimant's residence during normal working hours to inspect the premises and the claimed defect.

(e) Within 14 days following completion of the inspection, the construction professional shall serve on the claimant:

(1) a written offer to remedy the construction defect at no cost to the claimant, including a report of the scope of the inspection, the findings and results of the inspection, a description of the additional construction necessary to remedy the defect described in the claim, and a timetable for the completion of the construction;

(2) a written offer to compromise and settle the claim by monetary payment which may include, but need not be limited to, an express offer to purchase the claimant's residence that is the subject of the claim and to pay the claimant's reasonable relocation costs; or

(3) a written statement that the construction professional will not proceed further to remedy the defect.

(f) If the construction professional does not proceed further to remedy the construction defect within the agreed timetable, or if the construction professional fails to comply with the provisions of subsection (e), the claimant may bring an action against the construction professional for the claim described in the notice of claim without further notice.

(g) If the claimant rejects the offer made by the construction professional pursuant to subdivision (e)(1) or (e)(2) to either remedy the construction defect or compromise and settle the claim by monetary payment, the claimant shall serve written notice of the claimant's rejection on the construction professional. After service of the rejection notice, the claimant may bring an action against the construction professional for the construction defect claim described in the notice of claim. If the construction professional has not received from the claimant, within 30 days after the claimant's receipt of the construction professional's response, either an acceptance or rejection of the offer made pursuant to subdivision (e)(1) or (e)(2), then at any time thereafter the construction professional may terminate the offer by serving written notice to the claimant.

(h) Any claimant accepting the offer of a construction professional to remedy the construction defect pursuant to subdivision (e)(1) of this Section shall do so by serving the construction professional with a written notice of acceptance within a reasonable time period after receipt of the offer, and no later than 30 days after receipt of the offer. The claimant shall provide the construction professional and its contractors or other agents reasonable access to the claimant's residence during normal working hours to perform and complete the construction by the timetable stated in the offer. The claimant and construction professional may, by written mutual agreement, alter the extent of construction or the timetable for completion of construction stated in the offer for any reason, including, but not limited to, the repair of additional defects.

(i) Any action commenced by a claimant prior to compliance with the requirements of this Section is subject to dismissal without prejudice and shall not be recommenced until the claimant has complied with the requirements of this Section.

(j) Nothing in this Section may be construed to prevent a claimant from commencing an action on the construction defect claim described in the notice of claim if the construction professional fails to perform the construction agreed upon, fails to remedy the defect, or fails to perform by the timetable agreed upon pursuant to subdivision (b)(1) or subsection (h) of this Section.

(k) Prior to commencing any action alleging a construction defect, or after the dismissal of any action without prejudice pursuant to subsection (i), the claimant may amend the notice of claim to include construction defects discovered after the service of the original notice of claim. The claimant must otherwise comply with the requirements of this Section for the additional claims. The service of an amended notice of claim shall relate back to the original notice of claim for purposes of tolling statutes of limitations and repose. Claims for defects discovered after the commencement or recommencement of an action may be added to the action only after providing notice to the construction professional of the defect and allowing for a response under subsection (b).

Section 25. Effect of non-compliance.

(a) Any sums paid under a homeowner's warranty pursuant to a specific claim made with respect to the alleged defect, other than sums paid in satisfaction of claims that are collateral to any coverage issued to or by the contractor, shall be deducted from any recovery.

(b) If a contractor fails to comply with the requirements of this Act, the claimant is not obligated to further comply with the provisions of this Act and may commence an action without satisfying any other requirement of this Act; none of the provisions of this Act shall be applied to the detriment of the claimant.

Section 30. Construction defect list.

(a) In every action brought against a construction professional, the claimant, including a construction professional asserting a claim against another construction professional, shall file with the court and serve on the defendant a list of known construction defects in accordance with this Section.

(b) The list of known construction defects shall contain a description of the construction that the claimant alleges to be defective. The list of known construction defects shall be filed with the court and served on the defendant within 30 days after the commencement of the action or within such longer period as the court in its discretion may allow.

(c) The list of known construction defects may be amended by the claimant to identify additional construction defects as they become known to the claimant.

(d) The list of known construction defects shall specify, to the extent known to the claimant, the construction professional responsible for each alleged defect identified by the claimant.

(e) If a subcontractor or supplier is added as a party to an action under this Section, the party making the claim against the subcontractor or supplier shall serve on the subcontractor or supplier the list of construction defects in accordance with this Section within 30 days after service of the complaint against the subcontractor or supplier or within such period as the court in its discretion may allow.

Section 35. Mandatory notice.

(a) The construction professional shall provide notice to each homeowner, upon entering into a contract for sale, construction, or substantial remodel of a residence, of the construction professional's right to offer to cure construction defects before a homeowner may commence litigation against the construction professional. The notice shall be conspicuous and may be included as part of the underlying contract signed by the homeowner.

(b) The notice required by subsection (a) shall be in substantially the following form:

SECTIONS 1 THROUGH 30 OF THE NOTICE AND OPPORTUNITY TO REPAIR ACT CONTAIN IMPORTANT REQUIREMENTS YOU MUST FOLLOW BEFORE YOU MAY FILE A LAWSUIT FOR DEFECTIVE CONSTRUCTION AGAINST THE CONSTRUCTION PROFESSIONALS INVOLVED IN THE CONSTRUCTION OF YOUR HOME. BEFORE YOU FILE YOUR LAWSUIT, YOU MUST DELIVER TO THE SELLER OR BUILDER A WRITTEN NOTICE OF ANY CONSTRUCTION CONDITIONS YOU ALLEGE ARE DEFECTIVE AND PROVIDE THE CONSTRUCTION PROFESSIONAL THE OPPORTUNITY TO MAKE AN OFFER TO REPAIR OR PAY FOR THE DEFECTS. YOU ARE NOT OBLIGATED TO ACCEPT ANY OFFER MADE BY THE CONSTRUCTION PROFESSIONAL. THERE ARE STRICT DEADLINES AND PROCEDURES UNDER STATE LAW, AND FAILURE TO FOLLOW THEM MAY AFFECT YOUR ABILITY TO FILE A LAWSUIT.

(c) This Act does not preclude or bar any action if notice is not given to the homeowner as required by this Section.

Section 40. No effect on other rights. Nothing in this Act shall be construed to hinder or otherwise affect the employment, agency, or contractual relationship between homeowners and construction professionals during the process of construction or remodeling and does not preclude the termination of those relationships as allowed under the law. Nothing in this Act negates or otherwise restricts a construction professional's right to access or inspection provided by law, covenant, easement, or contract.

Section 45. Tolling of statutes of limitations and repose.

If a written notice of claim is served under Section 30 of this Act within the time prescribed for the filing of an action under this Act, the statutes of limitations for construction-related claims are tolled until 75 days after the period of time during which the filing of an action is barred under the applicable statute of limitations.