Proponents of proposition 201 call it the “Homeowners’ Bill of Rights,” and say the law would give new-home buyers protections against shoddy workmanship and provide consumers with legal recourse.
“A house is a family’s largest investment,” Rebekah Friend, executive director of the Arizona AFL-CIO, said.
The group, along with the Sheet Metal Workers International Association labor union, has spearheaded the ballot effort.
If passed, the initiative would create a 10-year warranty on any new home.
Under the proposed law, that warranty would be transferable to subsequent buyers if a house is sold within 10 years.
“It would be transferable, just like an automobile (warranty),” Friend said.
Homebuilders also would have to disclose in their model homes items that are upgrades and not included in base models.
The law would, among other things, provide a sort of “sticker price” similar to the way cars are sold, Friend said.
Under the law buyers could demand that a builder repair any defects in a house or pay the homeowner for the cost of repairs.
Not surprisingly, homebuilders’ associations and contractors have teamed up to oppose the initiative.
“It’s going to force everyone into the courts,” Chuck Freitas, of the Alliance of Construction Trades, said.
He said the proposed initiative would strip away the existing process for mediation and arbitration, making lawsuits the only option for dissatisfied homebuyers. Under current laws, a homebuilder has 60 days to either fix or pay for defects identified by a homeowner.
If homeowners still finds fault after the repairs, they have 20 days to inform the builder, who in turn must make the repairs within 10 days.
If still not satisfied, a homeowner can take the builder to court after 90 days.
“It outlines a very fair process for the two parties,” Freitas said of the current laws.
But proponents of proposition 201 say that’s just not the case.
In fact, they say that the current mediation process affords little protection to homebuyers.
“In 2002, the homebuilders’ lobbyists got together with the legislature and restricted the rights of homeowners,” Friend said of the existing law.
Other states have much stricter protections for homeowners, Friend added.
The building community also has problems with a provision of the initiative that gives a buyer 100 days to back out of a final sale and get back nearly all of their money.
The provision would open the door to frivolous buying where one purchaser initiates deals for multiple houses, Freitas said.
After deciding on one home, the buyer could renege on the others, leaving the seller holding the bag, Freitas speculated.
Perhaps most disconcerting to homebuilders is the possibility of more lawsuits and the added insurance builders would have to carry to protect themselves.
Freitas said those expenses would naturally have to be borne by homebuyers.
Supporters of the proposition say the bill would help protect homebuyers from sub par workmanship in the first place and should not cost consumers anything.
“It seems to me that it’s cheaper to do the work right the first time, than to go back and repair it,” Friend said.
She added that opponents of Proposition 201 have attempted to scare voters into opposing the initiative.
“If you look at their campaign,” Friend said, “it’s all threats.”
The money trail
As of the most recent reporting period with the Arizona Secretary of State’s office, supporters of Proposition 201 have collected $384,076.
Nearly all of the money has come from Sheet Metal Workers union organizations from across the country.
Contributions have come from as far a field as Washington, D.C., New Jersey, New York, Ohio, California and Ontario, Canada.
Organizers had spent $362,868 by the end of September.
Opponents of the proposition have spent nearly twice as much to ensure the demise of the initiative.
As of late September, opposition groups had gathered more than $1.3 million, including more than $400,000 from the Home Builders Association of Central Arizona.
Arizonans Against Lawsuit Abuse, an organization made up of homebuilders groups, has collected most of the funds.
To date, opposition groups have spent $704,525.
