Homebuilding Revitalization Act would protect innocent owners and honest builders

Editor's Note: Sandy Levy is a Seattle-based attorney the firm Levy von Beck & Associates who has worked heroically with us for the past few years to pass a Homebuilding Revitalization Act that would protect innocent homeowners and honest builders from the horrific damage caused by negligent, shady contractors. The following is a polished transcript of the remarks he delivered today before the Senate Labor, Commerce, & Consumer Protection Committtee on SB 6701, the 2010 version of the Homebuilding Revitalization Act.

Thank you, Madam Chair.

I want to address Senator King, who told a story... There are two things that could have happened that would have been different, and would have protected both the architect and the builder. If an architect is asked to design something that the architect thinks is fatally flawed, all the architect needs to do is write a letter that says, I accept no responsibility for this fatal and flawed design.

The contractor, under law, can also require the owner to accept sole and complete responsibility for a flawed design. That's one letter, one paragraph, eliminates all liability. That's one way that they can deal with it.

But let's say that nevertheless, the owner wants to insist on this and causes litigation. Under existing law, the aggrieved contractor, or the aggrieved architect, has no right to recover attorneys' fees. Under this bill - Section 9 - in a judicial proceeding under this section, it says the court the court may award reasonable attorneys' fees and costs to the prevailing party.

So, where you have an irresponsible owner who tries to take advantage of a contractor, now suddenly, there's actually a remedy.

And the attorneys' fees situation is a substantial remedy and a deterrent to irresponsible action by a homeowner.

As most of the senators here understand, we've been at this for years. Senator Honeyford asked me several years ago, Shouldn't the focus of attention be on the inspectors? And you know, you wrote in a provision - or the committee did - several years ago, and the municipal inspectors came in and said they just won't inspect anymore. They don't want liability.

Now, there's only one potential innocent party in a construction contract situation. That's the owner, who doesn't have the professional expertise (and, if he buys a completed house, has no ability to inspect what's behind the walls). He's not allowed to open walls, he's not allowed to do any inspection that does any damage. That buyer buys a house innocently and has no means of affording himself protection. This bill simply equalizes that playing field.

And to me, it's very interesting today. I feel like the homeowners are like the franchise auto dealers dealing with General Motors and the other manufacturers. We're caught as homeowners - the engine drivers of the economy - buying the products, but we don't have any rights. We have no right to enforce the building codes in the State of Washington.

So the State of Washington might require that a house be safe, secure, not leak... but if it doesn't, and it was approved by the building inspectors, the homeowners have no right of recourse. On the other hand, the builders have a hundred percent recourse. Why? Because by contract, right now, they require all their subcontractors to indemnify them. One hundred percent. By contract.

By contrast, current builders - when they contract to sell a home to a Washington buyer - typically, they require the homeowner to waive all implied warranties under the law. And by contract they can require them to agree to a thirty day statute of limitations if they want, and they can force them to agree to standards of poor quality built into the contract, so that the only thing that constitutes a defect is something that causes the house to fall down, and then the warranty period is very limited. The builder, on the other hand, can require his contractors to indemnify him and pay him attorneys' fees.

Also, the builders can require by contract, that all the subs and all of their key employees go through a training program. Homeowners have no such rights.

Even if, as the builders say, this has some impact on the construction industry, why should the homeowners who innocently buy homes be the ones to have to support the construction industry remodel program?

[That's] what the homeowners have to do, when they have to pay out of their own pocket to fix the houses they bought, which should have been built in accordance with the building codes and in a workmanlike way in the first place.

Thank you.