As lawsuits mount against home builders for everything from mold to moisture damage, all parties agree that there's a need for better legislation to help resolve disputes. What they can't agree on is what that legislation should be.

Home builders and the insurance industry favor increased homeowner education and less litigation. Homeowners want more builder accountability and a more direct path to the courtroom.

The result is a months-long legislative imbroglio. And with the clock ticking at the Capitol, it is uncertain whether a pair of controversial bills hailed as the Homeowners Protection Act will survive the weekend.

In February, Rep. Barb Goodwin, DFL-Columbia Heights, and Sen. Larry Pogemiller, DFL-Minneapolis, introduced legislation that would give homeowners broad new protections, including a tax break for homes with damage, guarantees that problems would be promptly repaired and an opportunity to recover legal fees for those who successfully sue their builders.
After vigorous debate, Pogemiller ended up offering portions of his proposal to Sen. Linda Scheid, DFL-Brooklyn Park, who sponsored a bill that moved out of the Senate rules committee and was scheduled to be heard by the tax committe.

And portions of Goodwin's bill, which never received a hearing, were folded into a bill sponsored by Rep. Karen Klinzing, R-Woodbury. The bill was still on the House floor Friday.
Both proposals include a mandate for more training and education for home builders, building inspectors, code officials and homeowners. Klinzing's bill, for example, would require building inspectors and code officials to attend at least 40 hours of continuing education every year.
Scheid's bill calls for home builders to complete 30 hours of education before applying to take the written builders license exam. And homeowners would be required to receive a guide on moisture problems, home warranties, seller disclosures and pre-purchase inspections in an effort to help them identify and avoid problems.

Insurance companies and the Builders Association of Minnesota say educating builders and homeowners is a critical step in reducing problems. In addition, they're in favor of legislation that would keep these cases out of the courtroom.

"Generally, I support the direction the bill is taking," said Pam Perri Weaver, executive vice president of the Builders Association of Minnesota. "Right now, anyone can get a builder's license; they can just take the test and off [they] go. I like the idea of tightening the requirements and making sure that builders understand what codes are in place."

Homeowner's groups, however, aren't cheering. They say the bills don't do enough to bring relief to owners whose lives have been turned upside down by unresolved construction defects.

"Laying the responsibility on the homeowners to go through this process is not the best way to do this," said Nancy Emerson, who has been battling a water intrusion problem at her nearly new Inver Grove Heights townhouse. "I don't know that the bill was ever the best that it could be, but I think it's been watered down.

"Many thousands of dollars go out of pocket for expenses and that hasn't been addressed at all. Basically, a homeowner should have the ability to get a problem resolved and made whole," said Emerson, a member of an organization of homeowners called Minnesota Home Watch. The organization contends that homeowners are left with the burden of having to understand and comply with deadlines associated with the state's statutory warranty laws.
Homeowner groups say they would like to see a "Homeowners Protection Act" that would enable owners to go directly to court and be reimbursed for their legal fees if the builder is at fault.

Scheid's Senate bill now includes a provision that requires homeowners to first try to work with the builder to solve the problem before heading to court, and the bill gives the courts the option of awarding legal fees if the homeowner prevails.

"We both feel that if these bills go as-is, then we want them trashed," said Sheila Asleson, Minnesota chapter President for Homeowners Against Deficient Dwellings (HADD).

Asleson's $500,000 house in Buffalo is so badly damaged by mold that the family is living in a two-bedroom farmhouse while they navigate the situation, which already has cost them $30,000 before they've set foot in court.

"When is the insurance industry going to run out of money?" Asleson said. "Never. So what they do is they make you wait and wait and when you're sick and tired of fighting and broke, they settle for less than what the fix is."

Legal experts say the home construction industry is facing mounting litigation and skyrocketing claims. Citing data from the city, builder advocate Weaver said that in Woodbury alone, 230 of 690 single-family homes with stucco cladding had moisture damage that was repaired and paid for by home builders' insurance companies. Most of the problems were associated with leaky windows or improper window installation, Weaver said.

To be sure, moisture problems are not unique to stucco or newly built houses. In fact, most homeowners insurance policies now include mold exclusions. As a result, it's builders who are seeing astronomical increases in their insurance premiums.

That's why Bob Johnson, executive vice president of the Insurance Federation of Minnesota, has been lobbying against legislation that he believes would encourage more litigation.
"The civil litigation process is more often than not lengthy, time-consuming, costly and not simple," Johnson said. "And it produces in almost every case compromised results, and often nobody is happy."
 

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