Valley labor union figures gathered on the House lawn Dec. 19 to announce the filing of an initiative intended to protect homebuyers from shady sales pitches and shoddily built homes.
The measure, dubbed the Homeowners’ Bill of Rights, is designed to level the “disparity of power” between homebuilders and homebuyers, said attorney Richard McCracken, representing the Sheet Metal Workers International Association Local Union 39.
Before a crowd of onlookers, union officials, members and reporters, McCracken said the initiative was necessary to counter state law enacted in 2002 that strongly favors homebuilders and has contributed to the state’s housing slump.
The proposal, if it qualifies for the ballot and is approved by voters, would mandate 10-year warranties on new homes, allow homeowners to select from contractors to do home repairs, and remove provisions allowing the rewarding of attorneys and expert witness fees to homebuilders who win lawsuits filed by homeowners.
“This will open up the judicial process to homeowners victimized by builders,” he said. “We’re talking about residential homeowners versus companies like KB (Kaufman Broad) and Pulte Homes.”
Contractors also would be affected by the proposal. Homebuilders would be required to submit to homeowners the names of three contractors who have no record of orders from the state’s Registrar of Contractors within the past 10 years preceding the seller’s offer.
From the list, the homeowner would be allowed to select a contractor to do the necessary work. Other protections in the initiative would require homebuilders to make it clear to consumers what amenities are included when new homes are purchased, said McCracken.
David Jones, president and chief executive officer of the Arizona Contractors Association, said the proposal seemed to have some merit, but remains short on legal details and the potential effects.
On the positive side, homeowners and customers will be more inclined to review their rights and become aware of what they are buying, said Jones, whose organization represents approximately 300 members.
Conversely, a 10-year warranty period is excessive, said Jones, who questions what qualifies as a Registrar of Contractors “order,” and wonders if the proposed initiative would have disproportionate effects on large and small contractors.
“Does that mean 10 years of no complaints for someone that builds 3,500 homes a year≠” he said. “Or does it mean you’ve never had a complaint filed with the ROC≠”
The order requirement might be feasible for companies or contractors that build a small number of homes each year, he said, but others building thousands of homes could be harmed under the proposal.
In response, homebuilders would most likely purchase performance insurance to reduce liability and the added costs would be handed down to consumers, said Jones, who is very critical of “legislating via the ballot-initiative process.”
“I still have an open mind about what they propose,” he said. “I’d just like to see some more dialogue.”
But using the initiative process to skip lawmakers is a necessity, given that the “Legislature bent over for the homebuilders in 2002,” said McCracken.
The group will be financed by the union and will probably rely on volunteer and paid signature collectors, he said.
To qualify for the ballot, 153,365 signatures of registered Arizona voters must be collected and turned in by July 3, 2008.
The Homeowners’ Bill of Rights Committee is chaired by Dion Abril and its treasurer is Don Lathem.
The filing number for the proposed initiative is I-14-2008.