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Judy Hedding

Arizona Proposition 201 - Homeowners' Bill of Rights

By September 20, 2008

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In November 2008 voters in Arizona will address Proposition 201, sponsored by Sheet Metal Workers (SMWIA) Local 359.

If passed the "Homeowners' Bill of Rights" would require a minimum 10-year warranty on new homes, allow a homeowner to participate in the selection of contractors to do repairs, and allows homeowners to sue home builders without being responsible for the builders' attorney costs. Home buyers would have the right to cancel within 100 days and get back most of their deposit.

Click on "Read more" to see a synopsis of the pros and cons and find more information about this ballot measure.

Will you vote in favor of Proposition 201?

1) Yes, homeowners need more protection from and leverage against home builders.
2) No, requiring litigation to settle disputes is counterproductive, and only unions and lawyers will benefit.

View Poll Results

Advocates of Proposition 201 say that: "The Homeowners Bill of Rights is based on the notion that if you buy a house and it turns out to be poorly built you should be able to do something about it. It is based on the notion that consumers should get what they pay for and that sellers should be held accountable for the quality of their product. It is based on the notion that transparency and full disclosure is a consumer right." Passage "will help increase the leverage prospective buyers and current home owners have when dealing with home builders."

Opponents of Proposition 201 say that: "Prop 201 [is] an unnecessary initiative that will encourage litigation and increase costs for both consumers and home builders. Current law already provides a process for home owners and home builders to resolve construction related disputes prior to filing any lawsuits. These laws have been in place for years and have resulted in increased consumer satisfaction, reduced litigation costs, and lower insurance premiums for home builders and homeowners alike." "Prop 201 is a boon for trial lawyers, and does little to aid home buyers or the construction industry."

UPDATE: Proposition 201 failed with 78% of the voters voting no.

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Comments

September 23, 2008 at 2:55 pm
(1) Les Wolf says:

Prop.201 continues to assume that home builders and buyers are adversaries. This only occurrs when a dispute arises, and that is rare. Government and Media constantly vilify Home Builders, when in fact home buyers have no greater advocates. You see without buyers, there are no Builders. Builder Associations are constantly fighting for the rights of home buyers and homeowners alike. Environmental issues, impact fees, water & sewer fees etc..adnauseum are being fought on behalf of home buyers. Home Builders fund entirely the State of Arizona Registrar of Contractors. This group of State Employees assure that minimum standards are maintained while regulating performance of Contractors. Performance of the Regstrar’s department has consistently improved regarless of the work load. Prop. 201 is just a bunch of union guys that ran out of work, and want to unionize Arizona. Go back where you came from, WE DON”T NEED YOU!!!!

September 28, 2008 at 2:47 pm
(2) Pat M says:

I have been in construction for over 22 years. The quality of homes has gone way. I bought a brand new home 3 years ago. I have had nothing but headaches. Faulty wiring,leaking air conditioners, backed up plumbing issues all the time. I had other problems as well. There was no customer service. We are a middle class family with a dream. Well it has been a nightmare and I hope this passes so no other family has to go through what we have…

September 29, 2008 at 12:34 pm
(3) Brian Carlson says:

201 is a terribly deceitful proposal……..The Sheetmetal Workers Union threatened our State Builders with this action as a reprisal from them for Arizona Builders not being in favor of Unionizing! This proposal provides for a myriad of potential lawsuits for defects in Home construction. It is an ambulance chasers dream. Potential buyers can sue whether or not they buy a home!? A homebuyer can bring forth any frivolous lawsuit and the builder has to pay the expense whether right or wrong!? This proposal is a ploy by unions to try to force Arizona Builders to unionize their workforce. This will remove freedom of choice and raise the cost of costruction in Arizona. We certainly don’t need this proposal in any form or fashion. Unions? No way! Not here!

September 30, 2008 at 11:31 am
(4) Marco A. Molina says:

Proposition 201 is one of the greatest pieces of legislations ever written in an effort to provide needed rights to the Home Owners. Even though I may be a little symphatic with the cry out of the Builders Association; they all well aware of a common term used in the Construction Industry the so- called “cutting corners term” which means in essence a fast/easy and noncompliace way of finish up an specific job tasks which results in a poor workmanship to the homeowners, let’s be clear that not all contractors are unscrupulous and greedy and not all of them agree to this concept.Let’s be honest to each other and get to the bottom of the issue; this legislation may give the home owners the ability to persue a defect issue throught a legal court if necessary; do it right the first time and comply with the established Mechanical codes and problem resolved. It is unconcivable to buy a lemon used car on Van Buren which will have a much greater warranty than the biggest investment of your entire life; this is disgusting even to a ridiculous degree, hence the core reason of Proposition 201. May God bless all those creaters of this needed piece of legislation. We are voting YES on 201.

September 30, 2008 at 4:39 pm
(5) Terri Robinson says:

I think this is a long overdue piece of legislation! After having a remodel done twice in the last 6 years I have first hand experience with the limitations of the AZ Contractors. My contractor put a new window into an existing bedroom along with the new bedroom and bathroom remodel they were doing. The window had no header and was put into a structural concrete block wall. I put this onto our checklist that their contract said they would fulfill before the final payment was due, only to have them take me to small claims court trying to make me pay them in full before they finished making the repairs that needed to be done. It took me weeks of research, hours on the Internet looking up the rules governing them, and many phone calls to the Contractors Association. They lied, said they didn’t need to have a permit to put a window into the existing part of the house, and made many threats. The Board of Contractors basically told us they couldn’t do anything other than allow us to file a complaint that would stay on their record until it got resolved.

Later I found out this same contractor had changed their name several times and had different people listed as the owners so they could continue in business after being shut down! I will be voting for Prop 201! Homebuiders are definitely NOT a homebuyers best friend!

October 1, 2008 at 5:09 pm
(6) Steve says:

This would drive all Home Builders out of AZ. Providing a 10 year warranty on workmanship and materials is ridiculous. All this does is drive up the cost of doing business for Builders. Who do you think this added cost will be passed on to? You guessed it, the buyer. If the buyer isn’t willing to pay, Builders will go elsewhere. Also, a very few buyers go the litigation route, and of those buyers even fewer have legitimate claims. All this does is make the relationship between the Builder and the buyer strained and little repairs will now take forever to get completed due to all the red tape everyone will have to go through.

October 2, 2008 at 10:21 am
(7) Tod T. says:

I have been in the construction industry for about 20 years, recently I had a home built here in Phoenix. The work was so bad that I had to stop construction multiple times to make sure things were done correctly. Luckily I understand construction methods where alot of people do not. This really helped us and still at the end of construction we had nothing but issues with the home. The Builder fought with us all the way, threatening canceling our contract, threatening with us losing our deposit and much more. All we wanted was a quality home.

I cannot understand when anyone wants to go against this bill. It is written to help the home owner not to hurt them. To give them rights that they currently do not have. Some builders do perform excellent work, but those that do not need to wake up. For those builders that do quality work, this should be a positive issue, it will make all builders work on the same playing field.

As to this being a “Union Issue”. I do not believe that, if a union is sponsoring this I say Kudo’s to them. At least someone is trying to stand up for the public! In my opinion, anyone that would vote against this is not looking at the bigger issues, but if it does not pass and they purchase a home, you can be assured they will wish this bill would have been put in place.

October 2, 2008 at 12:17 pm
(8) Dan C. says:

In response to Steve. I think your statement should read….This bill will drive the home builders known for their shoddy work out of town. Doesn’t sound that bad to me Steve. I guess we’ll have to let those homebuyers decide. Isn’t it funny that we can get a ten year warranty on a HYUNDAI. I don’t see them going out of business. I believe when you build a product the correct way, you’re not afraid to warranty your product. Maybe the homebuilders should attack the auto industry next.

October 2, 2008 at 7:22 pm
(9) AZDream says:

Prop 201 is so timely! Our Home’s builder’s rep just left my house after telling me that the their crooked wall is normal & within builder tolerance and as far as the trusses that had to be cut because they were too long, I need to give them 2-3 days to try and fix the problem AGAIN!

This is on top of having an engineer confirm our foundation needed a retrofit because the wall had no tie downs and the 2×4 wall was hanging over the foundation by as much as 2” in some places!

So much is wrong with my house I just want the builder to buy their scrap heap back! I have a file box full of repair complaints, documentation, hundreds of photos, emails…. and my biggest concern is that I will never be able to sell this house unless I give it away because that entire box is going to get disclosed to any potential buyer!

This builder has devastated me on so many levels….not just financially, but the time and stress has devastated my family and parents. It has been a very stressful 2 yrs, displacing my 83yr old father (my parents live with us) especially when we had to deal with a major water leak in the wall that produced mold and the thick dust clouds when they have come in to tear up walls & floors and put in missing insulation…… There are too many folks facing these builder nightmares. We need to make this law; We need a miracle; and we need a powerful law firm to force these builders to buy their defective homes back!

October 3, 2008 at 12:27 pm
(10) Rocketdog says:

Wow. Everyone that is for this bill should read the implications that even homeowners trying to sell their home can be thrown in front of the bus because of being a “Seller”.

Quote= “7. “Seller” means any person, firm, partnership, corporation, association or other organization that is engaged in the business of designing, constructing or selling dwellings, including a person, firm, partnership, corporation, association or organization licensed pursuant to title 32, chapter 20.”

I would hate to have someone else buy my home and find something wrong with it that wasn’t caught in the home inspection and be sued because of it. Even if I won or the case was thrown out, I would still have to cover court costs. All this bill does is bring unnecessary lawsuits into an already struggling market. Most home builders rectify the situation. Granted there are some situations where they can be problematic, but the majority go well. This is a horrid bill written by a trial lawyer from California looking to do nothing more than bring business for his chosen profession.

October 3, 2008 at 1:04 pm
(11) Don Latham says:

Read the initiative, then you will see the truth. The trial lawers against 201 are paid to say anything they can to get you to vote no. The truth why many homeowners don’t take there homebuilder to court is if they lost they would be required to pay the home builders (a large corparation) attorney and expert fees no matter how many they had. Who could take that risk! VOTE YES!!

October 5, 2008 at 11:16 pm
(12) Sandy Murphy says:

I must agree that this is made with the assumption that a Buyer and a Homebuilder are adversaries, however:

The multiple comments posted reflect situations which directly affected the author of the comment.

I invite your thoughts to consider the comments posted MAY NOT reflect an accurate or majority of society and perhaps shouldn’t impose such an impact on how we determine the rules.

All due to respect to the comments written and heartfelt empathy for the situation, I have seen both sides.

There are “bad” builders who do need to pay for their false representations or faulty work without question and should be held accountable.

However, some of our Builders are continuously subservient to unreasonable clients. There ARE Buyers that will purposely position a licensed Builder through our system now as it is designed, directly into financial hardship and ongoing responsibility. Hence, causing HIGHER building costs for every Buyer.

I would invite voters to see both sides of this and to make their decision understanding both sides of the coin.

October 6, 2008 at 12:45 am
(13) JLS says:

#10 Rocketdog said:

“…homeowners trying to sell their home can be thrown in front of the bus because of being a “Seller”.

NOT true and misleadingly bolded. More correctly:

Quote= “7. “Seller” means any person, firm, partnership, corporation, association or other organization that is engaged in the business of designing, constructing or selling dwellings [plural], including a person, firm, partnership, corporation, association or organization licensed pursuant to title 32, chapter 20.

A private individual selling a single residential dwelling cannot be reasonably construed as “being in the business of selling dwellings [plural] nor are they licensed pursuant to title 32, chapter 20.

From Title 32:
“32-2121. Applicability of article; exemption

A. The provisions of this article do not apply to:

1. A natural person, a corporation through its officers, a partnership through its partners or a limited liability company through its members or managers that deals in selling, exchanging, purchasing, renting, leasing, managing or pledging the person’s or entity’s own property

What is important is that prop 201: a) Did NOT originate in Arizona and I have serious issues with attorneys from other states proposing legislation HERE, where they DO NOT LIVE.
b) Is 4 pages of legalese which:
1. Is difficult for the average voter to decipher.
2. Specifically takes away homeowners’ rights to pursue any actions other than those involving the courts and, therefore, lawyers, their accompanying fees and an inordinate amount of time.
3. Reads much more like its title should be “The lawyers bill to make ever increasing amounts of money”.

Let’s wait and get simply written legislation that comes from the people who live here if it’s really necessary.

October 7, 2008 at 9:09 pm
(14) evelyn says:

I live in a Del Webb community in which more than 600 homes had iron pyrite in the stucco. Del Webb repainted homes 2 to 4 times
to cover up the rust spots until the statute
covering this problem ran out. Then, although the rust spots kept coming back, Webb refused to do any more to correct the problem. Finally a group of owners contacted a law firm to deal with the situation, and Webb finally agreed to one of the largest settlements of this sort in Arizona. It involved years of litigation, but thank heavens for the reputable law firms who know how to pursue this sort of negligence. No wonder the builders are against this Proposition.

October 9, 2008 at 6:55 pm
(15) Richard says:

To comment on some previous comments; yes it will drive some builders out of Arizona and you are probably a builder.If a builder leaves Arizona because this prop passes, that’s just great as we do not need these types of builders in Arizona. The quality of workmanship is suffering in the entire USA because of lazy unscrupulous businesses. The good builders that would stand behind their work will do just fine and the bad will leave. Everyone complains about auto manufactures not standing behind their vehicles but the same builders that are complaining here don’t want to stand behind the largest investment that a family will make. I have a neighbor that is in a major law suite right now with a local builder that is trying to worm his way out of his responsibility; I’m sorry but I do not have sympathy for a builder that does not take pride in his work and oversee his contractors. I contracted my own home and four years have gone by with NO problems, as I stayed there all day to watch my contractors.My wife and I are voting YES and I will convince everyone I know to do likewise.

October 10, 2008 at 1:04 pm
(16) Mike says:

Rocket dog is right…VOTE NO ON 201

A.R.S. 12-1361 currently allows:

Homeowners to get their problems fixed within 90 days.
If the parties fail to come to agreement, homeowners can pursue litigation.

Prop 201 will:
•prohibit two parties from agreeing to resolve their disputes without going to court and hiring attorneys. No arbitration! The lawyer full employment act brought to us by California attorneys.
•forbid the defendants from recovering any attorney’s fees, even if the case was frivolous or if they win.
•assure that as homeowners will wait months probably years, tied up in court, until the issue is resolved or my home gets fixed.
•allow prospective buyers to file lawsuits. They will not even have to own the home to file a lawsuit!

and guess what….. all you real estate agents and brokers out there, you can be sued too…it looks like you are no longer exempt under 201.

We all have potential exposure to this type of lawsuit. Take a close look and you will not like what you see.

October 10, 2008 at 1:45 pm
(17) Don Brooks says:

Rocket Dog and Mike are misleading the homeowners! The Home Owners Bill of Rights DOES NOT permit lawsuit despite Alternative Dispute Resolution (ADR) It COULD NOT; WOULD NOT AND WON’T ATTEMPT TO, because of FEDERAL LAW prohibits any State(including Arizona)attempting to prevent enforcement of Arbitration Clauses!! besides this, Arizona Revised Statutes 12-1501 assures enforceability of Alternative Dispute Resolution. Please consult this legal information with your advisor Mr. Grant Woods; he knows better than us and well-worth noticing that this is the reason why you guys are paying him thounsands of dollars isn’t it? Get your facts straight and let the homeowners decide upon this matter without misleading facts; they are NOT absent minded as some of you have assumed. VOTE YES ON 201, short and sweet my friend; eventhough, I may have hurt your feelings!

October 10, 2008 at 5:47 pm
(18) KLove says:

NO on PROP 201!!! Simply put. If you are wanting a longer warranty on your home, then AMEND this proposition but you’ll be sorry if this particular one ever gets passed. I spoke to my attorney and YES a private seller CAN be held sued under the 100 day right of recission. I have purchased from the same builder the last 3 homes I have purchased because of the quality of their building and materials. They have been in business for over 125 years. Do your homework! You get what you pay for. This is certainly not for homeowners, and it protects even less. All this proposition does is line the pockets of attorneys without morals. Do some research on WHO this proposition was started by. Amazing as it was… you guessed it, an attorney!!! This is crazy. I am all for quality but this is not the answer. Do not keep making band aid decisions people. This is not about homebuilders not wanting to offer an additional warranty. The earmarks in this proposition will drive even the best builders out of our state. Do we really need to bring this upon ourselves? Think about it, then VOTE NO ON PROP 201!!!!

October 11, 2008 at 9:44 pm
(19) Rick B says:

There are at least three conflicting posts regarding whether or not a home owner selling his home can be sued under the terms of this proposition. This will essentially be the deciding factor on my part. Can someone please post a link to an official site where this question is answered?

October 13, 2008 at 12:35 pm
(20) C. Chip says:

We are voting YES on 201 due to the following factors: Ten (10) year of new homes; not existing homes, my home is a 8 year old homes, so it does not apply prop 201. It is ONLY for BRAND NEW Constructed homes. Secondly, it provides the right to demand the builder to correct a construction defect or compensate the owner- either option is not a bad option at all. Thirdly, No threat of being liable for the BUILDER’S ATTORNEYS- Excellent idea; who can go after the builder and its attorney firms, if a home buyer can hardly afford to make the down payment on a new home? Fourth, making model homes to reflect what is actually for sale; we do not see anything wrong with this idea; how many of you have bought a house and ended up paying a lot more because of hidden cost of the upgrades in the Model Home? Contractors with clean records can be selected to correct the defect work- This is great; don’t we all want to have a reliable contractor to fix our defect problems in our brand new homes. Most importantly to note is that this propositions apply ONLY TO NEW HOMES; not existing ones. Are we not entitled to have “quality workmanship that should have been done in the first place; a decent home that at least will last for one generation?

October 15, 2008 at 3:41 pm
(21) ED A. says:

The homebuilders are fighting the basic premise that they should not have to stand behind the products they sell like every other business does. You might think that in a free market economy a bad builder might not be in business very long…okay maybe but what if you’re one of the thousands of families stuck with one of their lemons before they go out of business? Shouldn’t the most basic consumer rights be in place?
Having a defective home ruins lives and destroys the fabric of the family. When you live in a defective dwelling there is no safe place to go, no sanctuary from work or the outside world only a nightmare and financial whirlpool to return to.
The “readers” above would have you believe the current one or two year warranty is perfectly adequate and the remedies workable…. If that were the case how would there be thousands of families crying out for adequate repairs? Wouldn’t the builder have acted by now? Are the homebuyers just holding out because they like water rushing into their house when it rains? The opponents would have you believe its about lawsuit abuse…Is it an abuse to ask to get what you paid for? Is it abuse to make these homebuyers wait years for repair?
How about the preposterous idea that holding homebuilders to a ten year warranty would make housing too expensive? Didn’t real estate prices just take a huge hit? Was that because homebuyers demanded accountability from shoddy builders? Did Pulte lower prices during the boom when you had to win a lottery to be able to purchase one of their homes or did they benefit hugely from the demand for new homes driving prices up? Remember that part where YOU the American (and Arizonan) TAXPAYER just went 700 BILLION dollars in debt? Do you really think the homebuilder’s lobbyists were opposed to the same credit/mortgage deregulation that allowed them to sell hundreds of thousands of new homes? The same homebuying corporations that made RECORD PROFITS? NOW they want you to bail them out again: this time from ANY real responsibility when they slap together houses by using anybody with a pulse. I’ve been told by my realtor friends that the credit markets are SO tight now only those that don’t need a loan can get a mortgage. If we REALLY have to return to saving 20% down again (thats $60,000 on a $300,000 house) don’t we want the home to last ten years??? A thirty year mortgage and a two year warranty? I mean why can we get a better warranty on a used car??
Every (and I mean EVERY) provision of Prop 201 is LAW that existed BEFORE the homebuilding industry lobbyists convinced your legislature to strip you of your rights for this “better” world the lemon buyers are drowning in. The homebuilders deregulated Arizona consumer protections in the 2002 Legislative session. All Prop 201 does is restore your rights punishing only those builders who cut corners or don’t solve problems quickly or adequately. If there’s no defects there’s no lawsuits right? Prop 201 benefits GOOD contractors by weeding out the fly-by-nighters and leaving a fair playing field for all quality contractors. Don’t drink the kool-aid the homebuilders are serving! Get the truth like I did at:

http://www.voteyesonprop201...

October 16, 2008 at 6:16 pm
(22) AZDream says:

Now just for fun, what kind of proposition would we have if it was drafted by homeowners……you know, the consumer everyone FOR and AGAINST 201 says they are looking to protect………….Hmmmm.
It would probably be called the “No Lemon Law” and it would require the home builder buy back his masterpiece back if the home had any structural defect or if the builder had 3 opportunities to correct defects and still could not get it done right.
Homeowners would also have the builder write them a check for the time they had to take off work to get repairs done. (with money at stake, you bet they’ll get done right the first time)

*Remember, this is the largest investment a family makes and all these problems are now a matter of DISCLOSURE! Builders’ shoddy work destroys families financially & emotionally. How are families being protected now? Who is truly looking out for the consumer?

I would love to have the wisdom of Solomon…..but I’ll settle for my common sense which tells me to follow the money and make a decision based on the answers to a few simple questions?

Who is funding the “yes” on 201 and who is funding the “no” on 201?
Which position affords homeowners the most protection?
Who benefits if we leave the cheese where it is?
Who benefits if we move the cheese?

The way it works today goes something like this:
1. The Builder’s first course of action is to deny a problem exists.
2. Then Builder tells you it may exits but it is within tolerance and acceptable by the already low building standards.
3. Then they agree to give you a fix, but it’s so shoddy that it’s worse than what you had to begin with plus now the customer service crew created new problems for you (scratching your walls & cabinets, ruining your custom paint, staining your carpet, etc.)
4. The 4th step requires that you repeat step #3 until you have worn the homeowner down.

October 19, 2008 at 5:19 am
(23) Lynnfred Smith says:

I feel that people who call themselves “builders” should be held accountable for all the inconveniences they would cause to good buyers who are in honest business intentions. The degree of problems, we as Americans are facing in the housing market, is hard enough for buyers, as this places further apprehension in people who want a quality home. We depend on truth in lending, security in true business practices, transparent wording, and just plain honesty, to secure a quality home. Dishonest builders are out there and legislation and enforcement must be clear to prevent this kind of low quality practice. When a buyer purchases a home, from the beginning, during, and after the process, there should be Peace of Mind and a high degree of confidence and trust with the builder and the buyer, with this kind of high investment. Now, I know that not all builders are low quality in their business practices. I’m very happy with the builder I have, but Arizona is rated as fraud capital in this country. So PLEASE VOTE YES ON PROP 201 TO PROTECT AGAINST UNSAVORY BUILDERS and help keep the Real and Honest Builders here in Arizona. May God Bless You All

November 2, 2008 at 9:00 pm
(24) Scott says:

This prop requires a homeowner to notify the builder via certified mail of any defect in thier home and requires the builder to send a proposal to remedy the situation via the same. I hope those of you voting yes will have time for that when you have a plumbing leak or a sewer backup.

As for me I would like to be able to make a phone call and have the builder send someone over. It has worked for me in the last three new homes I have purchased. And they were three different builders.

November 3, 2008 at 10:14 am
(25) john says:

I wish people would think sometimes when they read. Our State has a 2 year workmanship law as is. If this actually passes the only end result is higher home prices. And that in this home market right now is not what we need. Higher costs for contractor with more liability. And as for the first post on this issue it would not cover a leaking ac unit anyway that would be a part warranty not a defective workmanship issue. Moron

November 3, 2008 at 12:49 pm
(26) cq says:

Voting yes seems great from a consumer standpoint.. However, and please correct me if I’m wrong, but wouldn’t increasing the cost of business for the builders (legal costs) directly increase the sale cost of the homes?
If it costs a builder more to own his business by having to pay out constant legal fees w no reimbursment if not found at fault then that would raise building costs.

I mean, if you raise my cost to maintain my business and build houses then I would in turn be forced to pass the cost on to the consumer right?
We all complain about the housing prices going up but I think this would perpetuate that problem..

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