PRIOR PRINTER'S NO. 755 PRINTER'S NO. 1147
No. 656 Session of 2005
INTRODUCED BY GORDNER, PILEGGI, COSTA, WAUGH, BOSCOLA, ROBBINS,
WOZNIAK, ERICKSON, C. WILLIAMS, PIPPY, PUNT, D. WHITE,
M. WHITE AND LEMMOND, APRIL 29, 2005
SENATOR PILEGGI, URBAN AFFAIRS AND HOUSING, AS AMENDED,
SEPTEMBER 27, 2005
AN ACT
1 Providing for dispute resolution procedures relating to <--
2 residential construction defects between contractors and
3 homeowners or members of associations; and prescribing
4 penalties.
5 PROVIDING FOR DISPUTE RESOLUTION PROCEDURES RELATING TO <--
6 RESIDENTIAL CONSTRUCTION DEFECTS BETWEEN CONTRACTORS AND
7 HOMEOWNERS OR MEMBERS OF ASSOCIATIONS.
8 The General Assembly of the Commonwealth of Pennsylvania
9 hereby enacts as follows:
10 Section 1. Short title. <--
11 This act shall be known and may be cited as the Residential
12 Construction Dispute Resolution Act.
13 Section 2. Definitions.
14 The following words and phrases when used in this act shall
15 have the meanings given to them in this section unless the
16 context clearly indicates otherwise:
17 "Action." A civil lawsuit, judicial action or arbitration
18 proceeding asserting a claim, in whole or in part, for damages
19 or other relief in connection with a dwelling, caused by a
1 construction defect.
2 "Association." An association as defined under 68 Pa.C.S. §§
3 3103 (relating to definitions), 4103 (relating to definitions)
4 and 5103 (relating to definitions).
5 "Claimant." Any person who asserts a claim concerning a
6 construction defect.
7 "Construction defect." The term shall have the same meaning
8 assigned by a written express warranty either provided by the
9 contractor or required by applicable statutory law. If no
10 written express warranty or applicable statutory warranty
11 provides a definition, then the term shall mean a matter
12 concerning the design or construction of a dwelling, or an
13 alteration of or addition to an existing dwelling or of an
14 appurtenance to a dwelling on which a person has a complaint
15 against a contractor. The term may include any physical damage
16 to the dwelling, any appurtenance or the real property on which
17 the dwelling or appurtenance is affixed, proximately caused by a
18 construction defect.
19 "Consultant." An engineer, architect, contractor, inspector
20 or other person purporting to have expertise relating to
21 residential construction.
22 "Contractor." A person, firm, partnership, corporation,
23 association or other organization that is engaged in the
24 business of developing, constructing or selling newly
25 constructed dwellings or constructing additions or appurtenances
26 to an existing dwelling. The term includes an owner, officer,
27 director, shareholder, partner or employee of a contractor. For
28 purposes of this act, the term also includes an industrialized
29 housing manufacturer. The term does not include a real estate
30 agent or broker.
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1 "Dwelling." A single-family house or duplex. The term
2 includes a multifamily unit designed for residential use in
3 which title to each individual unit is transferred to the owner.
4 Under a condominium or cooperative system, the term includes
5 common areas and improvements that are owned or maintained by an
6 association or by members of an association. The term includes
7 the systems, other components, improvements, other structures
8 and recreational facilities that are appurtenant to the house,
9 duplex or multifamily unit but not necessarily a part of the
10 house, duplex or multifamily unit. For purposes of this act, the
11 term also includes industrialized housing.
12 "Industrialized housing." A structure designed primarily for
13 residential occupancy and which is wholly or in substantial part
14 made, constructed, fabricated, formed or assembled in
15 manufacturing facilities for installation or assembly and
16 installation on the building site so that concealed parts or
17 processes of manufacture cannot be inspected at the site without
18 disassembly, damage or destruction. The term does not include a
19 structure or building classified as an institutional building or
20 manufactured home, as defined by the National Manufactured
21 Housing Construction and Safety Standards Act of 1974 (Public
22 Law 93-383, 42 U.S.C. § 5401-5426).
23 "Industrialized housing manufacturer." A person, firm,
24 partnership, corporation, association or other organization
25 involved in the process of making, constructing, fabricating,
26 forming or assembling, in a manufacturing facility, for
27 installation or assembly and installation on the building site,
28 industrialized housing from raw, unfinished or semifinished
29 materials.
30 "Serve" or "service." For an individual, delivery by
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1 certified mail, return receipt requested, to the last known
2 address of an addressee. For a corporation, limited partnership,
3 limited liability company or other registered business
4 organization, the term shall mean delivery on the registered
5 agent or other agent for service of process authorized by the
6 laws of this Commonwealth.
7 Section 3. Notice and opportunity to repair.
8 In every action subject to this act, the claimant shall, no
9 later than 60 days before initiating an action against a
10 contractor, provide service of written notice of claim on that
11 contractor. The notice of claim shall state that the claimant
12 asserts a construction defect claim or claims and is providing
13 notice of the claim or claims pursuant to the requirements of
14 this act. The notice of claim shall describe the claim or claims
15 in detail sufficient to explain the nature of the alleged
16 construction defects and the results of the defects. Service of
17 the notice of the claim shall be the equivalent of service of a
18 lawsuit or demand for arbitration with respect to imposing on
19 the contractor a legal obligation to pay as damages the cost of
20 any repairs and/or monetary payment made to settle the claim. In
21 addition, the claimant shall provide to the contractor any
22 evidence that depicts the nature and cause of the construction
23 defect, including expert reports, photographs and videotapes, if
24 that evidence would be discoverable under this Commonwealth's
25 evidentiary rules. If, after proper request, the claimant fails
26 to provide such evidence, then the claimant shall not be
27 permitted to introduce any such evidence not produced into
28 evidence in any action.
29 Section 4. Personal injury or death claims.
30 This act shall not apply to any claim for personal injury or
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1 death.
2 Section 5. Procedure.
3 (a) Contents of notice.--
4 (1) In an action subject to this act, the claimant must,
5 at least 60 days before initiating the action against a
6 contractor, provide service of written notice of claim on
7 that contractor. The notice of claim shall:
8 (i) State that the claimant asserts a construction
9 defect claim and is providing notice of the claim
10 pursuant to requirements of this act.
11 (ii) Describe the claim in detail sufficient to
12 explain the nature of the construction defect and the
13 result of the defect.
14 (iii) Include any reports by consultants that
15 describe the construction defect that the claimant
16 possesses.
17 (2) Service under this subsection shall toll all
18 applicable statutes of limitations until 60 days after the
19 receipt of the notice of claim.
20 (b) Response.--Except as otherwise provided for under
21 subsection (g), within 15 days after service of the notice of
22 claim under subsection (a), the contractor that has received the
23 notice of claim may serve on the claimant and on any other
24 contractor that has received the notice of claim a written
25 response to the claim, which either:
26 (1) offers to settle the claim by monetary payment, the
27 making of repairs or a combination of both, without
28 inspection, including a timetable for the making of the
29 payment or repairs;
30 (2) proposes to inspect the dwelling that is the subject
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1 of the claim within 15 days; or
2 (3) rejects the claim.
3 (c) Inspection of dwelling.--
4 (1) If the contractor requests the opportunity to
5 inspect the dwelling under subsection (b)(2), the claimant
6 shall provide the contractor and its consultants complete
7 access to inspect the dwelling in order to document the
8 defect and perform any destructive or nondestructive tests
9 necessary to evaluate the claim. If testing is performed, the
10 contractor shall return the dwelling to its pretesting
11 condition.
12 (2) If an inspection reveals a condition that requires
13 additional testing, the contractor shall provide notice to
14 the claimant of the need for the additional testing and the
15 claimant shall provide access to the dwelling.
16 (3) If a claim is asserted on behalf of owners of
17 multiple dwellings or multiple owners of units within a
18 multifamily complex, the contractor shall be entitled to
19 inspect each of the dwellings or units.
20 (d) Process following inspection.--Within 15 days following
21 completion of an inspection or testing under subsection (c), the
22 contractor may serve a written response on the claimant which:
23 (1) offers to settle the claim by monetary payment, the
24 making of repairs or a combination of both, and includes a
25 timetable for making the payment or repairs; or
26 (2) rejects the claim.
27 (e) Notice of claimant's response.--
28 (1) The claimant shall accept or reject an offer by a
29 contractor under subsection (b)(1) or (2) and (d)(1) within
30 15 days of receipt of the offer.
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1 (2) If the claimant rejects the settlement offer made by
2 the contractor under subsection (b) or (d), the claimant
3 shall provide written notice of the claimant's rejection to
4 the contractor and include the specific reasons for the
5 claimant's rejection.
6 (3) If the claimant fails to respond as required under
7 paragraph (1), the contractor's offer of monetary payment or
8 offer to repair shall be deemed to be accepted.
9 (f) Claimant's ability to bring action.--If the contractor:
10 (1) rejects the claim;
11 (2) does not respond to a notice of claim made under
12 subsection (a); or
13 (3) does not make monetary payment or repair within the
14 proposed timetable,
15 the claimant may bring an action against the contractor for the
16 defect described in the notice of claim without further notice
17 and notwithstanding the 60-day time period set forth under
18 subsection (a).
19 (g) Construction defects involving physical safety of
20 occupants.--
21 (1) If a construction defect poses an imminent threat to
22 the physical safety of the occupants of the dwelling, the
23 notice shall so advise the contractor, and the deadline for
24 the contractor's initial response under subsection (b) shall
25 be seven days after receipt of the notice.
26 (2) If the contractor's response under subsection (b)
27 contains a request to inspect the dwelling, the contractor
28 shall arrange for the inspection within five days.
29 (3) If the contractor determines there is an imminent
30 threat to physical safety, the contractor shall provide the
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1 claimant with a proposal for a monetary offer or offer to
2 repair within three days of the determination. If the
3 contractor determines there is no imminent threat to public
4 safety, the contractor shall respond as provided in
5 subsection (d).
6 (4) During the course of any notice to an inspection by
7 the contractor, the claimant or contractor may take such
8 interim repair steps to maintain the structural integrity of
9 the dwelling without prejudicing its claims or defenses.
10 (h) Right of action.--
11 (1) If a claimant rejects a reasonable monetary offer or
12 reasonable supplemental monetary offer or does not permit the
13 contractor to repair the defect pursuant to an accepted offer
14 to repair under subsection (e), the claimant may not recover
15 an amount in excess of:
16 (i) the fair market value of an offer to repair the
17 construction defect or the actual cost of the repairs,
18 whichever is less; or
19 (ii) the amount of the monetary offer of settlement.
20 (2) For purposes of this subsection, the trier of fact
21 shall determine the reasonableness of a monetary offer or
22 offer to repair made under subsection (b). If the claimant
23 has rejected a reasonable monetary offer or offer to repair,
24 the claimant may not recover costs or attorney fees incurred
25 after the date of rejection.
26 (i) Timely access for repairs.--If a claimant accepts a
27 contractor's offer to repair a construction defect, the claimant
28 shall provide the contractor and its subcontractors, agents,
29 experts and consultants access to the dwelling to complete the
30 repairs within the timetable set forth under this section.
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1 (j) Agreement between claimant and contractor.--Following
2 service under subsection (a), a claimant and a contractor may
3 alter the procedures under this act by mutual written agreement.
4 (k) Limitation of liability.--In an action involving a
5 construction defect, a contractor shall not be liable for
6 damages caused by:
7 (1) Normal shrinkage due to drying or settlement of
8 construction components within the tolerance of building
9 standards.
10 (2) The contractor's reasonable reliance on written
11 information relating to the dwelling that was obtained from
12 official government records or provided by a government
13 entity.
14 (3) Refusal of the claimant to allow the contractor or
15 the contractor's agents to perform their warranty service
16 work.
17 Section 6. Additional construction defects.
18 A construction defect that is discovered after a claimant has
19 served notice under section 5(a) (relating to procedure) may not
20 be alleged in an action until the claimant has complied with the
21 requirements of section 5.
22 Section 7. Actions of homeowner associations.
23 (a) General prohibition.--No person may provide or offer to
24 provide anything of value, directly or indirectly, to a property
25 manager of an association or to a member or officer of an
26 association to induce the property manager, member or officer to
27 encourage or discourage the association to file a claim for
28 damages arising from a construction defect.
29 (b) Property managers.--No property manager retained by an
30 association or member or officer of an association may accept
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1 anything of value, directly or indirectly, in exchange for
2 encouraging or discouraging the association to file a claim for
3 damages arising from a construction defect.
4 (c) Penalty.--A person who knowingly violates subsection (a)
5 or (b) commits a misdemeanor of the third degree.
6 Section 8. Right of action for association.
7 An association may bring an action against a contractor to
8 recover damages resulting from construction defects in any of
9 the common elements or limited common elements of a common-
10 interest community. The action may be maintained only after:
11 (1) A majority of the board of directors of the
12 association and the contractor have met in person and
13 conferred in a good faith attempt to resolve the
14 association's claim or the contractor has definitively
15 declined or ignored the requests to meet with the board of
16 directors of the association. Prior notice of a meeting under
17 this paragraph shall be provided to all board members and to
18 the contractor.
19 (2) The association has complied with section 5
20 (relating to procedure).
21 Section 9. Destructive tests.
22 No association may employ a person to perform destructive
23 tests to determine any damage or injury to a unit, common
24 element or limited common element caused by a construction
25 defect unless:
26 (1) The person performing the test has provided a
27 written schedule for repairs.
28 (2) The person performing the test is required to repair
29 all damage resulting from the tests in accordance with
30 Commonwealth laws and local ordinances relating thereto.
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1 (3) The association or the person so employed obtains
2 all permits required to conduct the tests and to repair any
3 damage resulting from the tests.
4 (4) Reasonable prior notice and opportunity to observe
5 the tests is given to the contractor against whom an action
6 may be brought as a result of the tests.
7 Section 10. Contractor employed by association.
8 The board of directors of an association may, without giving
9 notice to the unit owners, employ a contractor and such other
10 persons as are necessary to make such immediate repairs to a
11 unit or common element within the association as are required to
12 protect the health, safety and welfare of the units' owners.
13 Section 11. Construction.
14 Nothing in this act shall be construed as establishing a
15 cause of action on behalf of any claimant or contractor.
16 Section 12. Notice required at time of contracting.
17 (a) Written notice.--Upon entering into a contract to
18 construct a dwelling or to complete a remodeling project on a
19 dwelling, the contractor shall give the potential claimant a
20 written notice worded substantially as follows:
21 NOTICE CONCERNING CONSTRUCTION DEFECTS
22 Pennsylvania law contains important requirements you must
23 follow before you may file a lawsuit for defective
24 construction against the contractor who constructed your
25 dwelling or completed your remodeling project.
26 Pennsylvania law requires you to deliver to the
27 contractor a written notice by certified mail of any
28 construction conditions that you believe are defective
29 before you file your lawsuit, and you must provide your
30 contractor the opportunity to make an offer to repair or
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1 pay for the alleged defects. You are not obligated to
2 accept any offer made by the contractor, but failure to
3 accept a reasonable offer can limit your recoverable
4 damages. There are strict deadlines and procedures under
5 Pennsylvania law and failure to follow them may affect
6 your ability to file a lawsuit.
7 (b) Type of notice.--The notice required under subsection
8 (a) shall be in ten-point boldface type or greater and shall be
9 included within the contract between the contractor and
10 potential claimant.
11 Section 13. Applicability.
12 This act shall apply as follows:
13 (1) This act shall not apply to a contractor's right to
14 seek contribution, indemnity or recovery against a
15 subcontractor, supplier or design professional for any claim
16 made against the contractor by a claimant.
17 (2) This act shall apply regardless of the date of sale
18 or substantial completion of a dwelling, consistent with 42
19 Pa.C.S. § 5536.
20 Section 14. Effective date.
21 This act shall take effect in 60 days.
22 SECTION 1. SHORT TITLE. <--
23 THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE RESIDENTIAL
24 CONSTRUCTION DISPUTE RESOLUTION ACT.
25 SECTION 2. DEFINITIONS.
26 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ACT SHALL
27 HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
28 CONTEXT CLEARLY INDICATES OTHERWISE:
29 "ACTION." A CIVIL LAWSUIT, JUDICIAL ACTION OR ARBITRATION
30 PROCEEDING ASSERTING A CLAIM, IN WHOLE OR IN PART, FOR DAMAGES
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1 OR OTHER RELIEF IN CONNECTION WITH A DWELLING CAUSED BY A
2 CONSTRUCTION DEFECT.
3 "ASSOCIATION." AN ASSOCIATION AS DEFINED UNDER 68 PA.C.S. §§
4 3103 (RELATING TO DEFINITIONS), 4103 (RELATING TO DEFINITIONS)
5 AND 5103 (RELATING TO DEFINITIONS).
6 "CLAIMANT." ANY PERSON WHO ASSERTS A CLAIM CONCERNING A
7 CONSTRUCTION DEFECT. THE TERM INCLUDES AN ASSOCIATION.
8 "CONSTRUCTION DEFECT." THE TERM SHALL HAVE THE SAME MEANING
9 ASSIGNED BY A WRITTEN EXPRESS WARRANTY EITHER PROVIDED BY THE
10 CONTRACTOR OR REQUIRED BY APPLICABLE STATUTORY LAW. IF NO
11 WRITTEN EXPRESS WARRANTY OR APPLICABLE STATUTORY WARRANTY
12 PROVIDES A DEFINITION, THE TERM SHALL MEAN A MATTER CONCERNING
13 THE DESIGN OR CONSTRUCTION OF A DWELLING OR ADDITION TO A
14 DWELLING OR AN APPURTENANCE TO A DWELLING ON WHICH A PERSON HAS
15 A COMPLAINT AGAINST A CONTRACTOR. THE TERM MAY INCLUDE ANY
16 PHYSICAL DAMAGE TO THE DWELLING OR ANY APPURTENANCE, OR THE REAL
17 PROPERTY ON WHICH THE DWELLING OR APPURTENANCE IS AFFIXED,
18 PROXIMATELY CAUSED BY A CONSTRUCTION DEFECT.
19 "CONSULTANT." AN ENGINEER, ARCHITECT, CONTRACTOR, INSPECTOR
20 OR OTHER PERSON PURPORTING TO HAVE EXPERTISE RELATING TO
21 RESIDENTIAL CONSTRUCTION OR HAVING THAT EXPERTISE AS A RESULT OF
22 TRAINING OR PROFESSION.
23 "CONTRACTOR." A PERSON, FIRM, PARTNERSHIP, CORPORATION,
24 ASSOCIATION OR OTHER ORGANIZATION THAT IS ENGAGED IN THE
25 BUSINESS OF DEVELOPING, CONSTRUCTING OR SELLING NEWLY
26 CONSTRUCTED DWELLINGS OR CONSTRUCTING ADDITIONS OR APPURTENANCES
27 TO AN EXISTING DWELLING. THE TERM INCLUDES AN OWNER, OFFICER,
28 DIRECTOR, SHAREHOLDER, PARTNER OR EMPLOYEE OF A CONTRACTOR. FOR
29 PURPOSES OF THIS ACT, THE TERM ALSO INCLUDES AN INDUSTRIALIZED
30 HOUSING MANUFACTURER. THE TERM DOES NOT INCLUDE A REAL ESTATE
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1 AGENT, BROKER OR A CONTRACTOR THAT INSTALLS A NEW DEVICE OR
2 APPURTENANCE WHICH COSTS LESS THAN $2,000.
3 "DWELLING." A SINGLE-FAMILY HOUSE OR DUPLEX. THE TERM
4 INCLUDES A MULTIFAMILY UNIT DESIGNED FOR RESIDENTIAL USE IN
5 WHICH TITLE TO EACH INDIVIDUAL UNIT IS TRANSFERRED TO THE OWNER.
6 UNDER A CONDOMINIUM OR COOPERATIVE SYSTEM, THE TERM INCLUDES
7 COMMON AREAS AND IMPROVEMENTS THAT ARE OWNED OR MAINTAINED BY AN
8 ASSOCIATION OR BY MEMBERS OF AN ASSOCIATION. THE TERM ALSO
9 INCLUDES THE SYSTEMS, OTHER COMPONENTS, IMPROVEMENTS, OTHER
10 STRUCTURES AND RECREATIONAL FACILITIES THAT ARE APPURTENANT TO
11 THE HOUSE, DUPLEX OR MULTIFAMILY UNIT BUT NOT NECESSARILY A PART
12 OF THE HOUSE, DUPLEX OR MULTIFAMILY UNIT. FOR PURPOSES OF THIS
13 ACT, THE TERM ALSO INCLUDES INDUSTRIALIZED HOUSING.
14 "INDUSTRIALIZED HOUSING." A STRUCTURE DESIGNED PRIMARILY FOR
15 RESIDENTIAL OCCUPANCY, AND WHICH IS WHOLLY OR IN SUBSTANTIAL
16 PART MADE, CONSTRUCTED, FABRICATED, FORMED OR ASSEMBLED IN
17 MANUFACTURING FACILITIES FOR INSTALLATION OR ASSEMBLY AND
18 INSTALLATION ON THE BUILDING SITE SO THAT CONCEALED PARTS OR
19 PROCESSES OF MANUFACTURE CANNOT BE INSPECTED AT THE SITE WITHOUT
20 DISASSEMBLY, DAMAGE OR DESTRUCTION. THE TERM DOES NOT INCLUDE A
21 STRUCTURE OR BUILDING CLASSIFIED AS AN INSTITUTIONAL BUILDING OR
22 MANUFACTURED HOME, AS DEFINED BY THE NATIONAL MANUFACTURED
23 HOUSING CONSTRUCTION AND SAFETY STANDARDS ACT OF 1974 (42 U.S.C.
24 §§ 5401-5426).
25 "INDUSTRIALIZED HOUSING MANUFACTURER." A PERSON, FIRM,
26 PARTNERSHIP, CORPORATION, ASSOCIATION OR OTHER ORGANIZATION
27 INVOLVED IN THE PROCESS OF MAKING, CONSTRUCTING, FABRICATING,
28 FORMING OR ASSEMBLING, IN A MANUFACTURING FACILITY, FOR
29 INSTALLATION OR ASSEMBLY AND INSTALLATION ON THE BUILDING SITE,
30 INDUSTRIALIZED HOUSING FROM RAW, UNFINISHED OR SEMIFINISHED
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1 MATERIALS.
2 "SERVE" OR "SERVICE." FOR AN INDIVIDUAL, DELIVERY BY
3 CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE LAST KNOWN
4 ADDRESS OF AN ADDRESSEE. FOR A CORPORATION, LIMITED PARTNERSHIP,
5 LIMITED LIABILITY COMPANY OR OTHER REGISTERED BUSINESS
6 ORGANIZATION, THE TERM SHALL MEAN DELIVERY TO THE REGISTERED
7 AGENT OR OTHER AGENT FOR SERVICE OF PROCESS AUTHORIZED BY THE
8 LAWS OF THIS COMMONWEALTH.
9 SECTION 3. NOTICE AND OPPORTUNITY TO REPAIR.
10 (A) NOTICE.--IN EVERY ACTION SUBJECT TO THIS ACT, THE
11 CLAIMANT SHALL, NO LATER THAN 75 DAYS BEFORE INITIATING AN
12 ACTION AGAINST A CONTRACTOR, PROVIDE SERVICE OF WRITTEN NOTICE
13 OF CLAIM ON THE CONTRACTOR. THE NOTICE OF CLAIM SHALL STATE THAT
14 THE CLAIMANT ASSERTS A CONSTRUCTION DEFECT CLAIM OR CLAIMS AND
15 IS PROVIDING NOTICE OF THE CLAIM OR CLAIMS PURSUANT TO THE
16 REQUIREMENTS OF THIS ACT. THE NOTICE OF CLAIM SHALL DESCRIBE THE
17 CLAIM OR CLAIMS SUFFICIENTLY TO EXPLAIN THE NATURE OF THE
18 ALLEGED CONSTRUCTION DEFECTS AND THE RESULTS OF THE DEFECTS.
19 (B) SERVICE.--SERVICE OF THE NOTICE OF THE CLAIM SHALL BE
20 THE EQUIVALENT OF SERVICE OF A LAWSUIT OR DEMAND FOR ARBITRATION
21 WITH RESPECT TO IMPOSING ON THE CONTRACTOR A LEGAL OBLIGATION TO
22 PAY AS DAMAGES THE COST OF ANY REPAIRS AND/OR MONETARY PAYMENT
23 MADE TO SETTLE THE CLAIM.
24 (C) EVIDENCE.--IN ADDITION, THE CLAIMANT SHALL PROVIDE TO
25 THE CONTRACTOR ANY EVIDENCE KNOWN TO THE CLAIMANT OR IN THE
26 CLAIMANT'S POSSESSION THAT DEPICTS THE NATURE AND CAUSE OF THE
27 CONSTRUCTION DEFECT, INCLUDING EXPERT REPORTS, PHOTOGRAPHS AND
28 VIDEOTAPES, IF THE EVIDENCE WOULD BE DISCOVERABLE UNDER THE
29 STATE'S EVIDENTIARY RULES. IF, AFTER PROPER REQUEST, THE
30 CLAIMANT FAILS TO PROVIDE SUCH EVIDENCE, THE CLAIMANT SHALL NOT
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1 BE PERMITTED TO INTRODUCE ANY EVIDENCE NOT PRODUCED AS EVIDENCE
2 IN ANY ACTION.
3 SECTION 4. PERSONAL INJURY OR DEATH CLAIMS.
4 THIS ACT SHALL NOT APPLY TO ANY CLAIM FOR PERSONAL INJURY OR
5 DEATH.
6 SECTION 5. PROCEDURE.
7 (A) CONTENTS OF NOTICE.--
8 (1) IN AN ACTION UNDER THIS ACT, THE CLAIMANT SHALL, AT
9 LEAST 75 DAYS BEFORE INITIATING THE ACTION AGAINST A
10 CONTRACTOR, PROVIDE SERVICE OF WRITTEN NOTICE OF CLAIM ON THE
11 CONTRACTOR. THE NOTICE OF CLAIM SHALL:
12 (I) STATE THAT THE CLAIMANT ASSERTS A CONSTRUCTION
13 DEFECT CLAIM AND IS PROVIDING NOTICE OF THE CLAIM
14 PURSUANT TO THE REQUIREMENTS OF THIS ACT.
15 (II) DESCRIBE THE CLAIM SUFFICIENTLY TO EXPLAIN THE
16 NATURE OF THE CONSTRUCTION DEFECT AND THE RESULT OF THE
17 DEFECT.
18 (III) INCLUDE ANY EVIDENCE THAT DESCRIBES THE
19 CONSTRUCTION DEFECT THAT THE CLAIMANT POSSESSES.
20 (2) SERVICE UNDER THIS SUBSECTION SHALL TOLL ALL
21 APPLICABLE STATUTES OF LIMITATION UNTIL 75 DAYS AFTER RECEIPT
22 OF NOTICE OF THE CLAIM.
23 (B) RESPONSE.--EXCEPT AS OTHERWISE PROVIDED FOR UNDER
24 SUBSECTION (G), WITHIN 15 DAYS AFTER SERVICE OF THE NOTICE OF
25 CLAIM, THE CONTRACTOR THAT HAS RECEIVED THE NOTICE OF CLAIM
26 SHALL SERVE ON THE CLAIMANT AND ON ANY OTHER CONTRACTOR THAT HAS
27 RECEIVED THE NOTICE OF CLAIM A WRITTEN RESPONSE TO THE CLAIM
28 WHICH:
29 (1) OFFERS TO SETTLE THE CLAIM BY MONETARY PAYMENT, THE
30 MAKING OF REPAIRS OR A COMBINATION OF BOTH, WITHOUT
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1 INSPECTION, INCLUDING A TIMETABLE FOR THE MAKING OF THE
2 PAYMENT OR REPAIRS;
3 (2) PROPOSES TO INSPECT AT THE CONTRACTOR'S EXPENSE THE
4 DWELLING THAT IS THE SUBJECT OF THE CLAIM WITHIN 15 DAYS; OR
5 (3) REJECTS THE CLAIM.
6 (C) INSPECTION OF DWELLING.--
7 (1) IF THE CONTRACTOR REQUESTS THE OPPORTUNITY TO
8 INSPECT THE DWELLING UNDER SUBSECTION (B)(2), THE CLAIMANT
9 SHALL PROVIDE THE CONTRACTOR AND ITS CONSULTANTS REASONABLE
10 AND TIMELY ACCESS TO INSPECT THE DWELLING IN ORDER TO
11 DOCUMENT THE DEFECT AND PERFORM ANY DESTRUCTIVE OR
12 NONDESTRUCTIVE TESTS NECESSARY TO EVALUATE THE CLAIM. IF
13 TESTING IS PERFORMED, THE CONTRACTOR SHALL RETURN THE
14 DWELLING TO ITS PRETESTING CONDITION.
15 (2) IF AN INSPECTION REVEALS A CONDITION THAT REQUIRES
16 ADDITIONAL TESTING, THE CONTRACTOR SHALL PROVIDE PROMPT
17 NOTICE TO THE CLAIMANT OF THE NEED FOR THE ADDITIONAL
18 TESTING, AND THE CLAIMANT SHALL PROVIDE REASONABLE AND TIMELY
19 ACCESS TO THE DWELLING. ADDITIONAL TESTING, IF NECESSARY,
20 SHALL BE COMPLETED WITHIN 15 DAYS OF THE NOTICE.
21 (3) IF A CLAIM IS ASSERTED ON BEHALF OF OWNERS OF
22 MULTIPLE DWELLINGS OR MULTIPLE OWNERS OF UNITS WITHIN A
23 MULTIFAMILY COMPLEX, THE CONTRACTOR SHALL BE ENTITLED TO
24 INSPECT EACH OF THE DWELLINGS OR UNITS FOR WHICH A DEFECT HAS
25 BEEN CLAIMED.
26 (D) PROCESS FOLLOWING INSPECTION.--WITHIN 15 DAYS FOLLOWING
27 COMPLETION OF AN INSPECTION OR TESTING UNDER SUBSECTION (C), THE
28 CONTRACTOR SHALL SERVE A WRITTEN RESPONSE ON THE CLAIMANT WHICH:
29 (1) OFFERS TO SETTLE THE CLAIM BY MONETARY PAYMENT, THE
30 MAKING OF REPAIRS OR A COMBINATION OF BOTH, INCLUDING A
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1 TIMETABLE FOR MAKING THE PAYMENT AND/OR REPAIRS; OR
2 (2) REJECTS THE CLAIM.
3 (E) NOTICE OF CLAIMANT'S RESPONSE.--
4 (1) THE CLAIMANT SHALL ACCEPT OR REJECT AN OFFER BY A
5 CONTRACTOR UNDER SUBSECTION (B)(1) OR (D)(1) WITHIN 30 DAYS
6 OF RECEIPT OF THE OFFER.
7 (2) IF THE CLAIMANT REJECTS THE SETTLEMENT OFFER MADE BY
8 THE CONTRACTOR UNDER SUBSECTION (B) OR (D), THE CLAIMANT
9 SHALL PROVIDE WRITTEN NOTICE OF THE CLAIMANT'S REJECTION TO
10 THE CONTRACTOR AND INCLUDE THE SPECIFIC REASONS FOR THE
11 CLAIMANT'S REJECTION
12 (3) IF THE CLAIMANT FAILS TO RESPOND AS REQUIRED UNDER
13 PARAGRAPH (1), THE CONTRACTOR'S OFFER OF MONETARY PAYMENT OR
14 OFFER TO REPAIR SHALL BE DEEMED TO BE REJECTED.
15 (F) CLAIMANT'S ABILITY TO BRING AN ACTION.--IF THE
16 CONTRACTOR:
17 (1) REJECTS THE CLAIM;
18 (2) DOES NOT RESPOND TO A NOTICE OF CLAIM WITHIN THE
19 TIME FRAMES UNDER THIS SECTION; OR
20 (3) DOES NOT MAKE MONETARY PAYMENT OR REPAIR WITHIN THE
21 PROPOSED TIMETABLE OF AN ACCEPTED OFFER, THE CLAIMANT MAY
22 BRING AN ACTION AGAINST THE CONTRACTOR FOR THE DEFECT
23 DESCRIBED IN THE NOTICE OF CLAIM WITHOUT FURTHER NOTICE,
24 NOTWITHSTANDING THE 75-DAY TIME PERIOD SET FORTH UNDER
25 SUBSECTION (A).
26 (G) CONSTRUCTION DEFECTS INVOLVING PHYSICAL SAFETY OF
27 OCCUPANTS.--
28 (1) IF A CONSTRUCTION DEFECT POSES AN IMMINENT THREAT TO
29 THE PHYSICAL SAFETY OF THE OCCUPANTS OF THE DWELLING, THE
30 NOTICE SHALL SO ADVISE THE CONTRACTOR, AND THE DEADLINE FOR
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1 THE CONTRACTOR'S INITIAL RESPONSE UNDER SUBSECTION (B) SHALL
2 BE SEVEN DAYS AFTER RECEIPT OF THE NOTICE.
3 (2) IF THE CONTRACTOR'S RESPONSE UNDER SUBSECTION (B)
4 CONTAINS A REQUEST TO INSPECT THE DWELLING, THE CONTRACTOR
5 SHALL ARRANGE FOR THE INSPECTION WITHIN FIVE DAYS.
6 (3) IF THE CONTRACTOR DETERMINES THERE IS AN IMMINENT
7 THREAT TO PHYSICAL SAFETY, THE CONTRACTOR SHALL PROVIDE THE
8 CLAIMANT WITH A PROPOSAL FOR A MONETARY OFFER OR OFFER TO
9 REPAIR WITHIN THREE DAYS OF THE DETERMINATION.
10 (4) PRIOR TO THE SUBMISSION OF AN OFFER BY THE
11 CONTRACTOR UNDER THIS SUBSECTION, EITHER THE CLAIMANT OR
12 CONTRACTOR MAY TAKE INTERIM REPAIR STEPS TO MAINTAIN THE
13 STRUCTURAL INTEGRITY OF THE DWELLING WITHOUT PREJUDICING THE
14 CLAIMANT'S OR CONTRACTOR'S CLAIMS OR DEFENSES.
15 (H) RIGHT OF ACTION.--IF A CLAIMANT REJECTS A REASONABLE
16 MONETARY OFFER OR REASONABLE SUPPLEMENTAL MONETARY OFFER OR DOES
17 NOT PERMIT THE CONTRACTOR TO REPAIR THE DEFECT PURSUANT TO AN
18 ACCEPTED OFFER TO REPAIR UNDER SUBSECTION (E), THE CLAIMANT MAY
19 NOT RECOVER AN AMOUNT IN EXCESS OF:
20 (1) THE FAIR MARKET VALUE OF THE OFFER TO REPAIR THE
21 CONSTRUCTION DEFECT OR THE ACTUAL COST OF THE REPAIRS,
22 WHICHEVER IS LESS; OR
23 (2) THE AMOUNT OF THE MONETARY OFFER OF SETTLEMENT.
24 (I) REASONABLENESS OF MONETARY OFFER OR OFFER TO REPAIR.--
25 (1) FOR PURPOSES OF THIS SECTION, THE TRIER OF FACT
26 SHALL DETERMINE THE REASONABLENESS OF A MONETARY OFFER OR
27 OFFER TO REPAIR. IF THE CLAIMANT HAS REJECTED A REASONABLE
28 MONETARY OFFER OR OFFER TO REPAIR, THE CLAIMANT MAY NOT
29 RECOVER COSTS OR ATTORNEY FEES INCURRED AFTER THE DATE OF
30 REJECTION.
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1 (2) IF THE CONTRACTOR, THROUGH NO FAULT OF THE CLAIMANT,
2 FAILS TO MAKE A REASONABLE OFFER, THIS ACT SHALL NOT LIMIT
3 THE REMEDIES AVAILABLE TO A CLAIMANT.
4 (J) TIMELY ACCESS FOR REPAIRS.--IF A CLAIMANT ACCEPTS A
5 CONTRACTOR'S OFFER TO REPAIR A CONSTRUCTION DEFECT, THE CLAIMANT
6 SHALL PROVIDE THE CONTRACTOR AND ITS SUBCONTRACTORS, AGENTS,
7 EXPERTS AND CONSULTANTS REASONABLE AND TIMELY ACCESS TO THE
8 DWELLING TO COMPLETE THE REPAIRS WITHIN THE TIMETABLE SET FORTH
9 UNDER THIS SECTION.
10 (K) AGREEMENT BETWEEN CLAIMANT AND CONTRACTOR.--FOLLOWING
11 SERVICE UNDER SUBSECTION (A), A CLAIMANT AND A CONTRACTOR MAY
12 ALTER THE PROCEDURES UNDER THIS ACT, INCLUDING THE TOLLING OF
13 THE STATUTE OF LIMITATIONS, BY MUTUAL WRITTEN AGREEMENT.
14 (L) LIMITATION OF LIABILITY.--IN AN ACTION INVOLVING A
15 CONSTRUCTION DEFECT, A CONTRACTOR SHALL NOT BE LIABLE FOR
16 DAMAGES CAUSED BY:
17 (1) NORMAL SHRINKAGE DUE TO DRYING OR SETTLEMENT OF
18 CONSTRUCTION COMPONENTS WITH THE TOLERANCE OF BUILDING
19 STANDARDS.
20 (2) THE CONTRACTOR'S REASONABLE RELIANCE ON WRITTEN
21 INFORMATION RELATING TO THE DWELLING THAT WAS OBTAINED FROM
22 OFFICIAL GOVERNMENT RECORDS OR PROVIDED BY A GOVERNMENT
23 ENTITY.
24 (3) REFUSAL OF THE CLAIMANT TO ALLOW THE CONTRACTOR OR
25 THE CONTRACTOR'S AGENTS TO PERFORM THEIR WARRANTY SERVICE
26 WORK.
27 SECTION 6. ADDITIONAL CONSTRUCTION DEFECTS.
28 A CONSTRUCTION DEFECT THAT IS DISCOVERED AFTER A CLAIMANT HAS
29 SERVED NOTICE UNDER SECTION 3(A) (RELATING TO NOTICE AND
30 OPPORTUNITY TO REPAIR) MAY BE ALLEGED IN AN ACTION PROVIDED THE
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1 CLAIMANT COMPLIES WITH THE REQUIREMENTS OF SECTION 5 (RELATING
2 TO PROCEDURE) WITH RESPECT TO THE DEFECT.
3 SECTION 7. RIGHT OF ACTION FOR ASSOCIATION.
4 (A) GENERAL RULE.--AN ASSOCIATION MAY BRING AN ACTION
5 AGAINST A CONTRACTOR TO RECOVER DAMAGES RESULTING FROM
6 CONSTRUCTION DEFECTS IN ANY OF THE COMMON ELEMENTS OR LIMITED
7 COMMON ELEMENTS OF A COMMON INTEREST COMMUNITY.
8 (B) RESTRICTIONS.--THE ACTION MAY BE MAINTAINED ONLY AFTER:
9 (1) A MAJORITY OF THE BOARD OF DIRECTORS OF THE
10 ASSOCIATION AND THE CONTRACTOR HAVE MET IN PERSON AND
11 CONFERRED IN A GOOD FAITH ATTEMPT TO RESOLVE THE
12 ASSOCIATION'S CLAIM, OR THE CONTRACTOR HAS DEFINITIVELY
13 DECLINED OR IGNORED THE REQUESTS TO MEET WITH THE BOARD OF
14 DIRECTORS OF THE ASSOCIATION. NOTICE OF A MEETING UNDER THIS
15 PARAGRAPH SHALL BE PROVIDED TO ALL BOARD MEMBERS AND TO THE
16 CONTRACTOR.
17 (2) THE ASSOCIATION HAS COMPLIED WITH SECTION 5
18 (RELATING TO PROCEDURE).
19 SECTION 8. DESTRUCTIVE TESTS.
20 NO ASSOCIATION MAY EMPLOY A PERSON TO PERFORM DESTRUCTIVE
21 TESTS TO DETERMINE ANY DAMAGE OR INJURY TO A UNIT, COMMON
22 ELEMENT OR LIMITED COMMON ELEMENT CAUSED BY A CONSTRUCTION
23 DEFECT UNLESS REASONABLE PRIOR NOTICE AND OPPORTUNITY TO OBSERVE
24 THE TESTS ARE GIVEN TO THE CONTRACTOR AGAINST WHOM AN ACTION MAY
25 BE BROUGHT AS A RESULT OF THE TEST.
26 SECTION 9. CONTRACTOR EMPLOYED BY ASSOCIATION.
27 THE BOARD OF DIRECTORS OF AN ASSOCIATION MAY, WITHOUT GIVING
28 NOTICE TO THE UNIT OWNERS, EMPLOY A CONTRACTOR AND SUCH OTHER
29 PERSONS AS ARE NECESSARY TO MAKE SUCH IMMEDIATE REPAIRS TO A
30 UNIT OR COMMON ELEMENT WITHIN THE ASSOCIATION AS ARE REQUIRED TO
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1 PROTECT THE HEALTH, SAFETY AND WELFARE OF THE UNITS' OWNERS.
2 SECTION 10. CONSTRUCTION.
3 NOTHING IN THIS ACT SHALL BE CONSTRUED AS ESTABLISHING A
4 CAUSE OF ACTION ON BEHALF OF ANY CLAIMANT OR CONTRACTOR.
5 SECTION 11. NOTICE REQUIRED AT TIME OF CONTRACTING.
6 (A) FORM OF NOTICE.--UPON ENTERING INTO A CONTRACT TO
7 CONSTRUCT A DWELLING, THE CONTRACTOR SHALL GIVE THE OWNER OR
8 BUYER A WRITTEN NOTICE WORDED SUBSTANTIALLY AS FOLLOWS:
9 NOTICE CONCERNING CONSTRUCTION DEFECTS
10 PENNSYLVANIA LAW CONTAINS IMPORTANT REQUIREMENTS YOU MUST
11 FOLLOW BEFORE YOU MAY FILE ANY ACTION FOR DEFECTIVE
12 CONSTRUCTION AGAINST THE CONTRACTOR WHO CONSTRUCTED YOUR
13 DWELLING. PENNSYLVANIA LAW REQUIRES YOU TO DELIVER TO THE
14 CONTRACTOR A WRITTEN NOTICE BY CERTIFIED MAIL OF ANY
15 CONSTRUCTION CONDITIONS THAT YOU BELIEVE ARE DEFECTIVE,
16 WITH AN OPPORTUNITY TO REPAIR, BEFORE YOU FILE ANY
17 ACTION, AND YOU MUST PROVIDE YOUR CONTRACTOR:
18 (1) THE OPPORTUNITY TO MAKE AN OFFER TO REPAIR OR
19 PAY FOR THE ALLEGED DEFECTS.
20 (2) WITH ANY EVIDENCE IN YOUR POSSESSION THAT
21 DESCRIBED THE DEFECT. IF YOU DO NOT DISCLOSE SUCH
22 EVIDENCE YOU WILL NOT BE ALLOWED TO USE THE EVIDENCE IN
23 ANY ACTION.
24 YOU ARE NOT OBLIGATED TO ACCEPT ANY OFFER MADE BY THE
25 CONTRACTOR, BUT FAILURE TO ACCEPT A REASONABLE OFFER, AS
26 DETERMINED BY A COURT OR OTHER TRIER OF FACT, MAY LIMIT
27 YOUR RECOVERABLE DAMAGES. THERE ARE STRICT DEADLINES AND
28 PROCEDURES UNDER STATE LAW, AND FAILURE TO FOLLOW THEM
29 MAY AFFECT OR IMPAIR YOUR ABILITY TO FILE AN ACTION OR TO
30 SEEK RECOVERY FOR ANY DEFECTS. THERE MAY ALSO BE
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1 REQUIREMENTS WHICH MUST BE FOLLOWED IN A WRITTEN
2 WARRANTY. IT IS RECOMMENDED THAT YOU CONSULT WITH AN
3 ATTORNEY OF YOUR CHOOSING BEFORE ENTERING INTO ANY
4 AGREEMENT.
5 (B) ADDITIONAL REQUIREMENTS.--THE NOTICE REQUIRED UNDER
6 SUBSECTION (A) SHALL BE IN 10-POINT BOLD TYPE OR GREATER AND
7 SHALL BE INCLUDED WITHIN THE CONTRACT BETWEEN THE CONTRACTOR AND
8 POTENTIAL CLAIMANT.
9 (C) FAILURE TO INCLUDE NOTICE.--FAILURE TO INCLUDE THE
10 NOTICE SHALL DEPRIVE THE CONTRACTOR OF THE BENEFITS OF THIS ACT.
11 SECTION 12. APPLICABILITY.
12 THIS ACT SHALL APPLY AS FOLLOWS:
13 (1) THIS ACT SHALL NOT AFFECT A CONTRACTOR'S RIGHT TO
14 SEEK CONTRIBUTION, INDEMNITY OR RECOVERY AGAINST A
15 SUBCONTRACTOR, SUPPLIER OR DESIGN PROFESSIONAL FOR ANY CLAIM
16 MADE AGAINST THE CONTRACTOR BY A CLAIMANT.
17 (2) THIS ACT SHALL APPLY REGARDLESS OF THE DATE OF SALE
18 OR SUBSTANTIAL COMPLETION OF A DWELLING, CONSISTENT WITH 42
19 PA.C.S. § 5536 (RELATING TO CONSTRUCTION PROJECTS).
20 (3) THIS ACT SHALL NOT RESTRICT, MODIFY OR ALTER OR
21 OTHERWISE INTERFERE WITH THE OBLIGATIONS, TERMS OR CONDITIONS
22 OF AN INSURANCE POLICY.
23 (4) THIS ACT SHALL NOT APPLY TO AN INSURER ASSERTING A
24 CLAIM AGAINST A CONTRACTOR FOR PAYMENTS MADE BY THE INSURER
25 PURSUANT TO AN INSURANCE POLICY COVERING THE DWELLING. A
26 CLAIM UNDER THIS PARAGRAPH SHALL NOT BE PREJUDICED, REDUCED
27 OR OTHERWISE MODIFIED BECAUSE OF THE FAILURE OF THE CLAIMANT
28 TO COMPLY WITH THIS ACT.
29 SECTION 13. EFFECTIVE DATE.
30 THIS ACT SHALL TAKE EFFECT IN 60 DAYS.
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