HB2854 - 482R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 12, chapter 8, Arizona Revised Statutes, is amended by adding article 15, to read:

ARTICLE 15. RESIDENTIAL STRUCTURE CONSTRUCTION STANDARDS ACTIONS

START_STATUTE12-1371. Definitions

In this article, unless the context otherwise requires:

1. "Actual moisture barrier" means any component or material that is actually installed and that serves to any degree as a barrier against moisture, whether or not intended as a barrier against moisture.

2. "Claimant" or "homeowner" includes the individual owners of single family homes, individual unit owners of attached dwellings, in the case of a common interest development, any association as defined in section 12‑1361, original purchasers and subsequent purchasers.

3. "Close of escrow" means the date of the close of escrow between the builder and the original homeowner. With respect to claims by an association, as defined in section 12-1361, "close of escrow" means the date of substantial completion, as described in section 12-552, subsection E, or the date the builder relinquishes control over the association's ability to decide whether to initiate a claim under this article, whichever is later.

4. "Contractor" has the same meaning prescribed in section 32-1101.

5. "Designed moisture barrier" means an installed moisture barrier that is specified in the plans and specifications, contract documents or manufacturer's recommendations.

6. "Required", when referring to standards, includes the adopted building code, manufacturer's installation instructions and industry standards.

7. "Structure" means any residential dwelling, other building or improvement located on a lot or within a common area.

8. "Unintended water" means water that passes beyond, around or through a component or the material that is designed to prevent that passage. END_STATUTE

START_STATUTE12-1372. Standards for residential construction

A. In any action seeking recovery of damages arising out of or related to deficiencies in the residential construction, design, specifications, surveying, planning, supervision, testing or observation of construction, a seller as defined in section 12-1361, a builder, a general contractor, a subcontractor, a material supplier, an individual product manufacturer or a design professional, is liable for the violation of the standards described in this section, except as specifically set forth in this article. This article applies to original construction and conversions intended to be sold as an individual dwelling unit and common areas.

B. With respect to water issues:

1. A door shall not allow unintended water to pass beyond, around or through the door or its required, designed or actual moisture barriers, if any.

2. Windows, patio doors, deck doors and their systems shall not allow water to pass beyond, around or through the window, patio door or deck door or its required, designed or actual moisture barriers, including internal barriers within the systems themselves. For the purposes of this paragraph, "systems" include windows, window assemblies, framing, substrate, flashings and trim, if any.

3. Windows, patio doors, deck doors and their systems shall not allow excessive condensation to enter the structure and cause damage to another component. For the purposes of this paragraph, "systems" include windows, window assemblies, framing, substrate, flashings and trim, if any.

4. Roofs, roofing systems, chimney caps and ventilation components shall not allow water to enter the structure or to pass beyond, around or through the required, designed or actual moisture barriers, including internal barriers located within the systems themselves. For the purposes of this paragraph, "systems" include framing, substrate and sheathing, if any.

5. Decks, deck systems, balconies, balcony systems, exterior stairs and stair systems shall not allow water to pass into the adjacent structure. For the purposes of this paragraph, "systems" include framing, substrate, flashing and sheathing, if any.

6. Decks, deck systems, balconies, balcony systems, exterior stairs and stair systems shall not allow unintended water to pass within the systems themselves and cause damage to the systems. For the purposes of this paragraph, "systems" include framing, substrate, flashings and sheathing, if any.

7. Foundation systems and slabs shall not allow water or vapor to enter into the structure so as to cause damage to another building component.

8. Foundation systems and slabs shall not allow water or vapor to enter into the structure so as to limit the installation of the type of flooring materials typically used for the particular application.

9. Hardscape, including paths and patios, irrigation systems, landscaping systems and drainage systems, that is installed as part of the original construction shall not be installed in such a way as to cause water or soil erosion to enter into or come in contact with the structure so as to cause damage to another building component.

10. Stucco, exterior siding, exterior walls, including exterior framing and other exterior wall finishes and fixtures and the systems of those components and fixtures, including pot shelves, horizontal surfaces, columns and plant-ons, shall be installed in such a way so as not to allow unintended water to pass into the structure or to pass beyond, around or through the required, designed or actual moisture barriers of the system, including any internal barriers located within the system itself. For the purposes of this paragraph, "systems" include framing, substrate, flashings, trim, wall assemblies and internal wall cavities, if any.

11. Stucco, exterior siding and exterior walls shall not allow excessive condensation to enter the structure and cause damage to another component.

12. Retaining and site walls and their associated drainage systems shall not allow unintended water to pass beyond, around or through its required, designed or actual moisture barriers, including any internal barriers, so as to cause damage. This standard does not apply to those portions of any wall or drainage system that are designed to have water flow beyond, around or through them.

13. Retaining walls and site walls and their associated drainage systems shall only allow water to flow beyond, around or through the areas designated by design.

14. The lines and components of the plumbing system, sewer system and utility systems shall not leak.

15. Plumbing lines, sewer lines and utility lines shall not corrode so as to impede the useful life of the systems.

16. Sewer systems shall be installed in such a way as to allow the designated amount of sewage to flow through the system.

17. Showers, baths and related waterproofing systems shall not leak water into the interior of walls, flooring systems or the interior of other components.

18. The waterproofing system behind or under ceramic tile and tile countertops shall not allow water into the interior of walls, flooring systems or other components so as to cause damage. Ceramic tile systems shall be designed and installed so as to deflect intended water to the waterproofing system.

C. With respect to structural issues:

1. Foundations, load bearing components and slabs shall not contain significant cracks or significant vertical displacement.

2. Foundations, load bearing components and slabs shall not cause the structure, in whole or in part, to be structurally unsafe or result in significant cracks in hard flooring, drywall, stucco or masonry.

3. Foundations, load bearing components and slabs and underlying soils shall be constructed so as to materially comply with the design criteria set by applicable government building codes, regulations and ordinances for chemical deterioration or corrosion resistance in effect at the time of original construction.

4. A structure shall be constructed so as to materially comply with the design criteria for earthquake and wind load resistance, as set forth in the applicable government building codes, regulations and ordinances in effect at the time of original construction.

D. With respect to soil issues:

1. Soils and engineered retaining walls shall not cause, in whole or in part, damage to the structure built on the soil or engineered retaining wall.

2. Soils and engineered retaining walls shall not cause, in whole or in part, the structure to be structurally unsafe.

3. Soils shall not cause, in whole or in part, the land on which there is no built structure to become unusable for the purpose represented at the time of original sale by the builder or for the purpose for which that land is commonly used.

E. With respect to fire protection issues:

1. A structure shall be constructed so as to materially comply with the design criteria of the applicable government building codes, regulations and ordinances for fire protection of the occupants in effect at the time of the original construction.

2. Fireplaces, chimneys, chimney structures and chimney termination caps shall be constructed and installed in such a way so as not to cause an unreasonable risk of fire outside the fireplace enclosure or chimney.

3. Electrical and mechanical systems shall be constructed and installed in such a way so as not to cause an unreasonable risk of fire.

F. With respect to plumbing and sewer issues, plumbing and sewer systems shall be installed to operate properly and shall not materially impair the use of the structure by its inhabitants.

G. With respect to electrical system issues, electrical systems shall operate properly and shall not materially impair the use of the structure by its inhabitants.

H. With respect to issues regarding other areas of construction the standards are as follows:

1. Exterior pathways, driveways, hardscape, sidewalls, sidewalks and patios installed by the original builder shall not contain cracks that display significant vertical displacement or that are excessive.

2. Stucco, exterior siding and other exterior wall finishes and fixtures, including pot shelves, horizontal surfaces, columns and plant-ons, shall not contain significant cracks or separations.

I. Heating, if any, shall be installed so as to be capable of maintaining a room temperature of seventy degrees Fahrenheit at a point three feet above the floor in any living space.

J. Living space air conditioning, if any, shall be provided in a manner consistent with the size and efficiency design criteria specified in the air conditioning contractors of America manual J residential load calculation or its successor.

K. Attached structures shall be constructed to comply with interunit noise transmission standards set by the applicable government building codes, ordinances or regulations in effect at the time of the original construction. If there is no applicable code, ordinance or regulation, this subsection does not apply.

L. Irrigation systems and drainage shall operate properly so as not to damage landscaping or other external improvements.

M. Untreated wood posts shall not be installed in contact with soil so as to cause unreasonable decay to the wood based on the finish grade at the time of original construction.

N. Untreated steel fences and adjacent components shall be installed so as to prevent unreasonable corrosion.

O. Paint and stains shall be applied in such a manner so as not to cause deterioration of the building surfaces for the length of time specified by the paint or stain manufacturers' representations, if any.

P. Roofing materials shall be installed so as to avoid materials falling from the roof.

Q. The landscaping systems shall be installed in such a manner so as to survive for not less than one year.

R. Ceramic tile and tile backing shall be installed in such a manner that the tile does not detach.

S. Dryer ducts shall be installed and terminated pursuant to manufacturer installation requirements.

T. Structures shall be constructed in such a manner so as not to impair the occupants' safety because they contain public health hazards as determined by a duly authorized public health official, health agency or governmental entity having jurisdiction. This subsection does not limit recovery for any damages caused by a violation of any other subsection of this section on the grounds that the damages do not constitute a health hazard.

U. To the extent not otherwise covered by this section, manufactured products, including windows, doors, roofs, plumbing products and fixtures, fireplaces, electrical fixtures, heating, ventilating and air conditioning units, countertops, cabinets, paint and appliances shall be installed so as not to interfere with the products' useful life, if any. If no useful life representation is made, or if the representation is less than one year, the period shall be no less than one year. If a manufactured product is damaged as a result of a violation of the standards prescribed in this section, damage to the product is a recoverable element of damages. This subsection does not limit recovery if there has been damage to another building component caused by a manufactured product during the manufactured product's useful life. This article does not apply in any action seeking recovery solely for a defect in a manufactured product located within or adjacent to a structure. For the purposes of this subsection:

1. "Manufactured product" means a product that is completely manufactured offsite.

2. "Useful life" means a representation of how long a product is warranted or represented, through its limited warranty or any written representations, to last by its manufacturer, including recommended or required maintenance. If there is no representation by a manufacturer, a builder shall install manufactured products so as not to interfere with the product's utility. END_STATUTE

START_STATUTE12-1373. Intent of standards

The standards set forth in this article are intended to address every function or component of a structure. To the extent that a function or component of a structure is not addressed by these standards, it is actionable under this article if it causes damage. END_STATUTE

START_STATUTE12-1374. Warranty covering fit and finish items

A. As to fit and finish items, a builder shall provide a home buyer with a minimum one-year express written limited warranty covering the fit and finish of the building components listed in subsection B of this section.

B. Except as otherwise provided by the standards specified in section 12-1372, the express warranty required by this section shall cover the fit and finish of cabinets, mirrors, flooring, interior and exterior walls, countertops, paint finishes and trim but shall not apply to damage to those components caused by defects in other components governed by the other provisions of this article.

C. Any fit and finish matters covered by the express warranty required by this section are not subject to this article.

D. If a builder fails to provide the express warranty required by this section, the warranty for these items shall be for a period of one year. END_STATUTE

START_STATUTE12-1375. Obligation of homeowner to follow reasonable maintenance obligations

A homeowner is obligated to follow all reasonable maintenance obligations and schedules communicated in writing to the homeowner by the builder and product manufacturers, as well as commonly accepted maintenance practices. A failure by a homeowner to follow these obligations, schedules and practices may subject the homeowner to the affirmative defenses contained in section 12-1383. END_STATUTE

START_STATUTE12-1376. Applicability to other entities involved in construction process

This article applies to sellers, builders, general contractors, subcontractors, material suppliers, individual product manufacturers and design professionals to the extent that the sellers, builders, general contractors, subcontractors, material suppliers, individual product manufacturers and design professionals caused, in whole or in part, a violation of a particular standard as the result of an act or omission, negligence, breach of implied warranty or a breach of contract. In addition to the affirmative defenses set forth in section 12-1383, a seller, builder, general contractor, subcontractor, material supplier, design professional, individual product manufacturer or other entity may also offer common law and contractual defenses as applicable to any claimed violation of a standard. All actions by a claimant, seller, builder or general contractor to enforce an express contract or any provision of an express contract, implied warranty and indemnity against a general contractor, subcontractor, material supplier, individual product manufacturer or design professional are preserved. Nothing in this article modifies the law pertaining to no joint and several liability for builders, general contractors, subcontractors, material suppliers, individual product manufacturers and design professionals that contribute to any specific violation of this article, except that a seller, builder and general contractor are liable to a claimant for any uncollectible judgment against a seller, builder, general contractor, subcontractor, material supplier, individual product manufacturer and design professional. END_STATUTE

START_STATUTE12-1377. Applicability

This article applies only to new residential units where the purchase agreement with the buyer was signed by the seller on or after January 1, 2000. END_STATUTE

START_STATUTE12-1378. Limitations of actions; definition

A. The date of substantial completion as described in section 12-552, subsection E or the date that the seller relinquishes control over the purchaser's or association's ability to decide to initiate a claim under this article, whichever is later, is the initiation date for the statute of repose for bringing an action to recover damages for a violation of this article.

B. Existing law regarding tolling of the statute of limitations applies to the time periods for filing an action or making a claim under this article, including the tolling provision contained in section 12-1363, subsection J. If a seller arranges for a contractor to perform a repair pursuant to section 12-1363, as to the seller, the time period for calculating the statute of limitation shall pertain to the substantial completion of the original construction and not to the date of repairs under this article. Causes of action and damages to which this article does not apply are not limited by this section.

C. For the purposes of this section, "action" includes an action for indemnity brought against a person arising out of that person's performance or furnishing of services or materials referred to in this article. END_STATUTE

START_STATUTE12-1379. Showing required for claim

In order to make a claim for violation of the standards set forth in section 12-1372, a claimant must only demonstrate, in accordance with the applicable evidentiary standard, that the home does not meet the applicable standard, subject to the affirmative defenses set forth in section 12-1383. No further showing of causation or damages is required to meet the burden of proof regarding a violation of a standard set forth in this article if the violation arises out of, pertains to or is related to the original construction or conversion. END_STATUTE

START_STATUTE12-1380. Other causes of action

This article does not provide an exclusive remedy. In addition to the rights under this article, this article does not apply to any action by a claimant to enforce an implied warranty, contract or express contractual provision or any action for fraud, personal injury or violation of a statute. Damages awarded for the items set forth in section 12-1381 in such other cause of action shall be reduced by the amounts recovered pursuant to section 12-1381 for violation of the standards set forth in this article. END_STATUTE

START_STATUTE12-1381. Damages and fees

A. The claimant is entitled to recover damages, including the following:

1. The reasonable value of repairing any violation of the standards set forth in this article to current codes.

2. The reasonable cost of repairing any damages caused by the repair efforts.

3. The reasonable cost of repairing and rectifying any damages resulting from the failure of the home to meet the standards.

4. The reasonable cost of removing and replacing any improper repair by the sellers, builders, general contractors, subcontractors, material suppliers, individual product manufacturers and design professionals.

5. Reasonable relocation and storage expenses.

6. Lost business income if the home was used as a principal place of a business licensed to be operated from the home.

7. Exemplary damages on proper proof.

8. All other damages recoverable by contract, statute or law.

B. Notwithstanding any other statute, if a claimant is ultimately awarded any damages for any claims made under this article, the court or arbitrator shall award the claimant all incurred fees and costs, including attorney fees and costs, expert fees and costs, investigative costs, testing costs and documentation costs, and all other fees and costs recoverable by contract, statute or law. END_STATUTE

START_STATUTE12-1382. Original purchasers and successors-in-interest

The provisions, standards, rights and obligations set forth in this article are binding on all original purchasers and their successors‑in‑interest. For the purposes of this article, original purchasers, subsequent purchasers, associations and others having the rights set forth in article 14 of this chapter shall be considered to be original purchasers and shall have standing to enforce the provisions, standards, rights and obligations set forth in this article. END_STATUTE

START_STATUTE12-1383. Affirmative defenses

A. A seller, builder, general contractor, subcontractor, material supplier, individual product manufacturer or design professional under the principles of comparative fault pertaining to affirmative defenses may be excused, in whole or in part, from any obligation, damage, loss or liability if the seller, builder, general contractor, subcontractor, material supplier, individual product manufacturer or design professional can demonstrate any of the following affirmative defenses in response to a claimed violation:

1. The violation is caused by an unforeseen act of nature that caused the structure not to meet the standard. For the purposes of this paragraph "unforeseen act of nature" means a weather condition, earthquake or manmade event such as war, terrorism or vandalism in excess of the design criteria expressed by the applicable building codes, regulations and ordinances in effect at the time of original construction.

2. The extent the violation is caused by a homeowner's unreasonable failure to minimize or prevent those damages in a timely manner, including the failure of the homeowner to allow reasonable and timely access for inspections and repairs pursuant to section 12-1363. This includes the failure to give timely notice to the builder after discovery of a violation but does not include damages due to the untimely or inadequate response of a builder to the homeowner's claim.

3. The violation is caused by the homeowner or the homeowner's agent, employee, general contractor, subcontractor, independent contractor or consultant by virtue of the failure to follow the builder's or manufacturer's recommendations or commonly accepted homeowner maintenance obligations. In order to rely on this defense as it relates to a builder's recommended maintenance schedule, the builder shall show that the homeowner had written notice of these schedules and recommendations and that the recommendations and schedules were reasonable at the time they were issued.

4. The violation is caused by the homeowner's, the homeowner's agent or an independent third party's alterations, ordinary wear and tear, misuse, abuse or neglect or by the structure's use for something other than its intended purpose.

5. The time period for filing actions bars the claimed violation.

6. The particular violation is one for which the builder has obtained a valid release.

7. The builder's repair was successful in correcting the particular violation of the applicable standard and compliant with applicable codes.

B. As to any causes of action to which this section does not apply, all applicable affirmative defenses are preserved. END_STATUTE