HB 1900: Statute of Repose; Building Code; Contractor Repair Act; Inspection; Repair; Rejection of Claims; Limitations on Recovery

A BILL FOR AN ACT

RELATING TO REMEDIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 657-8, Hawaii Revised Statutes, is amended to read as follows:

     "§657-8  Limitation of action for damages based on construction to improve real property.  (a)  No action, whether in contract, tort, statute, or otherwise, to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of any deficiency or neglect in the planning, design, construction, supervision and administering of construction, and observation of construction relating to an improvement to real property shall be commenced more than ten years after the date of completion of the improvement.

     (b)  This section shall not be construed to extend any shorter period of limitation under this chapter, including the six-year statute of limitations under section 657-1 or the two-year statute of limitations for damages to persons or property under section 657-7, as applicable, subject to the ten-year statute of repose under subsection (a).

     (c)  This section shall not apply to actions for damages against owners or other persons having an interest in the real property or improvement based on their negligent conduct in the repair or maintenance of the improvement or to actions for damages against surveyors for their own errors in boundary surveys.  An improvement shall be deemed substantially complete upon the earliest of the following:

     (1)  The issuance of a certificate of occupancy; or

     (2)  The filing of an affidavit of publication and notice of completion within the circuit court of the judicial circuit where the property is situated in compliance with section 507-43(f).

If the improvement consists of multiple buildings or improvements, each building or improvement shall be considered as a separate improvement for the purpose of determining the limitations period set forth in this section.

     (d)  This section shall not be construed to prevent, limit, or extend any shorter period of limitation applicable to sureties provided for in any contract or bond or any other statute, nor to extend or add to the liability of any surety beyond that for which the surety agreed to be liable by contract or bond.

     (e)  Nothing in this section shall exclude or limit the liability provisions as set forth in the products liability laws.

     (f)  No action, whether in contract, tort, statute, or otherwise, based on a violation of the applicable building code shall be commenced unless the violation is a material violation of the applicable building code.

     [(f)] (g)  For the purposes of this section:

     "Date of completion" means the time when there has been substantial completion of the improvement or the improvement has been abandoned.

     "Improvement" has the same meaning as in section 507-41.

     "Material violation" means a building code violation that exists within a completed building, structure, or facility that may reasonably result or has resulted in physical harm to a person or significant damage to the performance of a building or its systems."

     SECTION 2.  Section 672E-3, Hawaii Revised Statutes, is amended to read as follows:

     "§672E-3  Notice of claim of construction defect.  (a)  A claimant, no later than ninety days before filing an action against a contractor, shall serve the contractor with a written notice of claim.  The notice of claim shall:

     (1)  State that the claimant asserts a claim against the contractor for a construction defect in the design, construction, or remodeling, or any combination thereof, of a dwelling or premises; and

     (2)  Describe the claim in detail sufficient to determine the circumstances constituting the alleged construction defect and damages resulting from the construction defect.  The description shall specifically identify the alleged defect or problem; provided that a general statement that a construction defect may exist shall be insufficient.

The notice of claim shall not constitute a claim under any applicable insurance policy and shall not give rise to a duty of any insurer to provide a defense under any applicable insurance policy unless and until the process described in section 672E-5 is completed.  Nothing in this chapter shall in any way interfere with or alter the rights and obligations of the parties under any liability policy.

     (b)  If available to the claimant, the claimant shall provide to the contractor, with the notice of claim, evidence that depicts the nature and cause of the construction defect and the nature and extent of the repairs necessary to repair the defect, including the following information if obtained by the claimant:  photographs, videotapes, and any testing performed.

     (c)  Each individual claimant or putative class member shall comply with this chapter, which includes permitting inspection under section 672E-4 of each dwelling or premises that is the subject of the claim.  No person shall be permitted to join a class action under this chapter unless the person has first complied with this chapter.

     [(c)] (d)  A contractor served with a written notice of claim shall serve any other appropriate subcontractor with notice of the claim.  The contractor's notice shall include the claimant's written notice of claim.

     [(d)] (e)  After serving the notice of claim, a claimant shall give to the contractor reasonable prior notice and an opportunity to observe if any testing is done."

     SECTION 3.  Section 672E-4, Hawaii Revised Statutes, is amended to read as follows:

     "§672E-4  Rejection of claim; opportunity to repair construction defect.  (a)  The contractor rejects a claimant's claim of construction defects by:

     (1)  Serving the claimant with a written rejection of the claim; or

     (2)  Failing to respond pursuant to subsection (b)(1) or (2) to the notice of claim within thirty days after service.

     (b)  The contractor, within thirty days after service of the notice of claim, shall serve the claimant and any other contractor that has received the notice of claim with a written response to the alleged construction defect that:

     (1)  Offers to settle without inspecting the construction defect by:

          (A)  Monetary payment;

          (B)  Making repairs; or

          (C)  Both subparagraphs (A) and (B); or

     (2)  Proposes to inspect the premises of the alleged construction defect that is the subject of the claim.

     (c)  Within thirty days following any proposal for inspection under subsection (b)(2), the claimant shall accept a contractor's proposal to inspect.  After accepting the contractor's proposal to inspect, the claimant and contractor shall agree on a time and date for the inspection, which shall occur within thirty days of the claimant's acceptance of the contractor's proposal to inspect, unless the claimant and contractor agree to a later date.  The claimant shall provide reasonable access to the dwelling or premises during normal working hours to:

     (1)  Inspect the premises;

     (2)  Document any alleged construction defects; and

     (3)  Perform any testing required to evaluate the nature, extent, and cause of the asserted construction defect, and the nature and extent of any repair or replacement that may be necessary to remedy the asserted construction defect;

provided that if the claimant is an association under chapter 514B, the claimant shall have forty-five days to provide access.  If access to an individual condominium unit is necessary, and the association is unable to obtain access, then the association shall have a reasonable time to provide access.  If destructive testing is required, the contractor shall give advance notice of tests and return the premises to its pre-testing condition.  If inspection or testing reveals a condition that requires additional testing to fully and completely evaluate the nature, cause, and extent of the construction defect, the contractor shall provide notice to the claimant of the need for additional testing.  The claimant shall provide additional access to the dwelling or premises.  If a claim is asserted on behalf of owners of multiple dwellings, or multiple owners of units within a multi-family complex, the contractor shall be entitled to inspect each of the dwellings or units.

     [(d)  Inspections and testing performed pursuant to this section shall be completed within nine months of the contractor's request to inspect, unless the parties agree or the court orders otherwise.

     (e)] (d)  Within fourteen days following the inspection and testing, the contractor shall serve on the claimant a written:

     (1)  Offer to fully or partially remedy the construction defect at no cost to the claimant.  The offer shall include a description of construction necessary to remedy the construction defect and a timetable for the completion of the additional construction;

     (2)  Offer to settle the claim by monetary payment;

     (3)  Offer for a combination of repairs and monetary payment; or

     (4)  Statement that the contractor will not proceed further to remedy the construction defect.

     [(f)  Upon receipt of the offer made under subsection (b)(1) or (e)(1), (2), or (3), the claimant may, within thirty or forty-five days, whichever applies pursuant to section 672E-5(a), accept the offer and authorize the contractor to proceed with any repairs offered under subsection (b)(1) or (e)(1) or (3), or deny the offer.

     (g)] (e)  Any offer of settlement under this section shall reference this section, and shall state that a claimant's failure to respond with a written notice of acceptance or rejection within thirty or forty-five days, whichever applies pursuant to section 672E-5(a), shall mean that the offer is rejected.  Failure to serve a written offer or statement under this section shall be deemed a statement that the contractor will not proceed further."

     SECTION 4.  Section 672E-6, Hawaii Revised Statutes, is amended to read as follows:

     "§672E-6  Offer of settlement.  (a)  Any time after the service of the notice of claim, any party may serve an offer of settlement.

     (b)  If the offer is accepted, the parties shall be deemed to have resolved the claim in whole or in part pursuant to the offer.

     (c)  An offer not accepted within the time period required under section 672E-5, or ten days after service for any subsequent offers, shall be deemed withdrawn and evidence thereof shall not be admissible except to determine entitlement to recovery of attorneys' fees and costs[.  If the judgment or award obtained in a subsequent proceeding is not more favorable than the offer, the offeree shall pay the costs incurred by the offeror after the making of the offer.  The fact that an offer is made and not accepted does not preclude a subsequent offer.] and the reasonableness of the contractor's offer of settlement for purposes of subsection (d).

     (d)  If a claimant rejects a contractor's reasonable offer of settlement, the claimant's cost of repair recovery shall be limited to the reasonable value of the repair determined as of the date of the offer and the amount of the offered monetary payment.  Any additional damages caused by the alleged construction defect shall not be limited by this section."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

Report Title:

Statute of Repose; Building Code; Contractor Repair Act; Inspection; Repair; Rejection of Claims; Limitations on Recovery

Description:

Prohibits actions based on a building code violation unless the violation was a material violation of the building code.  Specifies that claimants must comply with the Contractor Repair Act and bars persons from joining a class action for failure to comply with the Contractor Repair Act.  Repeals the requirement that inspections and testing be completed within nine months.  Deletes duplicative language for when persons may accept a settlement offer.  Limits the amount a claimant can recover if the claimant rejects a contractor's reasonable proposal for inspection or a reasonable offer to remedy.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

Relating to remedies.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 657-8, Hawaii Revised Statutes, is amended to read as follows:

     "§657-8  Limitation of action for damages based on construction to improve real property.  (a)  No action, whether in contract, tort, statute, or otherwise, to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of any deficiency or neglect in the planning, design, construction, supervision and administering of construction, and observation of construction relating to an improvement to real property shall be commenced no more than ten years after the date of completion of the improvement[.], subject to the statute of repose provisions under this chapter.

     (b)  [This section shall not be construed to extend any shorter period of limitation under this chapter, including the six-year statute of limitations under section 657-1 or the two-year statute of limitations for damages to persons or property under section 657-7, as applicable, subject to the ten-year statute of repose under subsection (a).

     (c)]  This section shall not apply to actions for damages against owners or other persons having an interest in the real property or improvement based on their negligent conduct in the repair or maintenance of the improvement or to actions for damages against surveyors for their own errors in boundary surveys.  An improvement shall be deemed substantially complete upon the earliest of the following:

     (1)  The issuance of a certificate of occupancy; or

     (2)  The filing of an affidavit of publication and notice of completion within the circuit court of the judicial circuit where the property is situated in compliance with section 507-43(f).

If the improvement consists of multiple buildings or improvements, each building or improvement shall be considered as a separate improvement for the purpose of determining the limitations period set forth in this section.

     [(d)] (c)  This section shall not be construed to prevent, limit, or extend any shorter period of limitation applicable to sureties provided for in any contract or bond or any other statute, nor to extend or add to the liability of any surety beyond that for which the surety agreed to be liable by contract or bond.

     [(e)] (d)  Nothing in this section shall exclude or limit the liability provisions as set forth in the products liability laws.

     (e)  No action, whether in contract, tort, statute, or otherwise, based on a violation of the applicable building code shall be commenced unless the violation is a material violation of the applicable building code.

     (f)  For the purposes of this section:

     "Date of completion" means the time when there has been substantial completion of the improvement or the improvement has been abandoned.

     "Improvement" has the same meaning as in section 507-41.

     "Material violation" means a building code violation that exists within a completed building, structure, or facility that may reasonably result or has resulted in physical harm to a person or significant damage to the performance of a building or its systems."

     SECTION 2.  Section 672E-3, Hawaii Revised Statutes, is amended to read as follows:

     "§672E-3  Notice of claim of construction defect.  (a)  A claimant, no later than ninety days before filing an action against a contractor, shall serve the contractor with a written notice of claim.  The notice of claim shall:

     (1)  State that the claimant asserts a claim against the contractor for a construction defect in the design, construction, or remodeling, or any combination thereof, of a dwelling or premises; and

     (2)  Describe the claim [in detail] with particularity and specificity sufficient to determine the circumstances constituting the alleged construction defect [and damages resulting from the construction defect.  The description shall specifically identify the alleged defect or problem; provided that a].  A general statement that a construction defect may exist shall be insufficient.

The notice of claim shall not constitute a claim under any applicable insurance policy and shall not give rise to a duty of any insurer to provide a defense under any applicable insurance policy unless and until the process described in section 672E-5 is completed.  Nothing in this chapter shall in any way interfere with or alter the rights and obligations of the parties under any liability policy.

     (b)  If available to the claimant, the claimant shall provide to the contractor, with the notice of claim, evidence that depicts the nature and cause of the construction defect and the nature and extent of the repairs necessary to repair the defect, including the following information if obtained by the claimant:  photographs, videotapes, and any testing performed.

     (c)  Each individual claimant or putative class member shall comply with this chapter, which includes permitting inspection under section 672E-4 of each dwelling or premises that is the subject of the claim.  No person shall be permitted to join a class action under this chapter unless the person has first complied with this chapter.

     [(c)] (d)  A contractor served with a written notice of claim shall serve any other appropriate subcontractor with notice of the claim.  The contractor's notice shall include the claimant's written notice of claim.

     [(d)] (e)  After serving the notice of claim, a claimant shall give to the contractor reasonable prior notice and an opportunity to observe if any testing is done."

     SECTION 3.  Section 672E-4, Hawaii Revised Statutes, is amended to read as follows:

     "§672E-4  Rejection of claim; opportunity to repair construction defect.  (a)  The contractor rejects a claimant's claim of construction defects by:

     (1)  Serving the claimant with a written rejection of the claim; or

     (2)  Failing to respond pursuant to subsection (b)(1) or (2) to the notice of claim within thirty days after service.

     (b)  The contractor, within thirty days after service of the notice of claim, shall serve the claimant and any other contractor that has received the notice of claim with a written response to the alleged construction defect that:

     (1)  Offers to settle without inspecting the construction defect by:

          (A)  Monetary payment;

          (B)  Making repairs; or

          (C)  Both subparagraphs (A) and (B); or

     (2)  Proposes to inspect the premises of the alleged construction defect that is the subject of the claim.

     (c)  Within thirty days following any proposal for inspection under subsection (b)(2), the claimant shall [accept a contractor's proposal to inspect.  After accepting the contractor's proposal to inspect, the] provide access to inspect the premises.  The claimant and contractor shall agree on a time and date for the inspection, which shall occur within thirty days of the claimant's acceptance of the contractor's proposal [to inspect,] for inspection, unless the claimant and contractor agree to a later date.  The claimant shall provide reasonable access to the dwelling or premises during normal working hours to:

     (1)  Inspect the premises;

     (2)  Document any alleged construction defects; and

     (3)  Perform any testing required to evaluate the nature, extent, and cause of the asserted construction defect, and the nature and extent of any repair or replacement that may be necessary to remedy the asserted construction defect;

provided that if the claimant is an association under chapter 514B, the claimant shall have forty-five days to provide access.  If access to an individual condominium unit is necessary, and the association is unable to obtain access, then the association shall have a reasonable time to provide access.  If destructive testing is required, the contractor shall give advance notice of tests and return the premises to its pre-testing condition.  If inspection or testing reveals a condition that requires additional testing to fully and completely evaluate the nature, cause, and extent of the construction defect, the contractor shall provide notice to the claimant of the need for additional testing.  The claimant shall provide additional access to the dwelling or premises.  If a claim is asserted on behalf of owners of multiple dwellings, or multiple owners of units within a multi-family complex, the contractor shall be entitled to inspect each of the dwellings or units.

     [(d)  Inspections and testing performed pursuant to this section shall be completed within nine months of the contractor's request to inspect, unless the parties agree or the court orders otherwise.

     (e)] (d)  Within fourteen days following the inspection and testing, the contractor shall serve on the claimant a written:

     (1)  Offer to fully or partially remedy the construction defect at no cost to the claimant.  The offer shall include a description of construction necessary to remedy the construction defect and a timetable for the completion of the additional construction;

     (2)  Offer to settle the claim by monetary payment;

     (3)  Offer for a combination of repairs and monetary payment; or

     (4)  Statement that the contractor will not proceed further to remedy the construction defect.

     [(f)  Upon receipt of the offer made under subsection (b)(1) or (e)(1), (2), or (3), the claimant may, within thirty or forty-five days, whichever applies pursuant to section 672E-5(a), accept the offer and authorize the contractor to proceed with any repairs offered under subsection (b)(1) or (e)(1) or (3), or deny the offer.

     (g)] (e)  Any offer of settlement under this section shall reference this section, and shall state that a claimant's failure to respond with a written notice of acceptance or rejection within thirty or forty-five days, whichever applies pursuant to section 672E-5(a), shall mean that the offer is rejected.  Failure to serve a written offer or statement under this section shall be deemed a statement that the contractor will not proceed further."

     SECTION 4.  Section 672E-6, Hawaii Revised Statutes, is amended to read as follows:

     "§672E-6  Offer of settlement.  (a)  Any time after the service of the notice of claim, any party may serve an offer of settlement.

     (b)  If the offer is accepted, the parties shall be deemed to have resolved the claim in whole or in part pursuant to the offer.

     (c)  An offer not accepted within the time period required under section 672E-5, or ten days after service for any subsequent offers, shall be deemed withdrawn and evidence thereof shall not be admissible except to determine entitlement to recovery of attorneys' fees and costs[.  If the judgment or award obtained in a subsequent proceeding is not more favorable than the offer, the offeree shall pay the costs incurred by the offeror after the making of the offer.  The fact that an offer is made and not accepted does not preclude a subsequent offer.] and reasonableness of the contractor's offer of settlement in subsection (d).

     (d)  If a claimant rejects a contractor's reasonable offer of settlement, the claimant's cost of repair recovery shall be limited to the reasonable value of the repair determined as of the date of the offer and the amount of the offered monetary payment.  Any additional damages caused by the alleged construction defect shall not be limited by this section."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

Report Title:

Statute of Repose; Contractor Repair Act; Notice of Claim; Inspection; Repair; Rejection of Claims; Limitations on Recovery

Description:

Clarifies the applicability of the statute of repose for actions arising from construction defects.  Repeals the two-year limitation for actions arising from construction defects.  Clarifies the required contents of a notice of claim of construction defect served on a contractor.  Specifies that claimants must comply with the Contractor Repair Act and bars persons from joining a class for failure to comply with the Contractor Repair Act.  Amends the process and time frame for a claimant to accept a contractor's offer to settle or inspect.  Limits the amount a claimant can recover if the claimant rejects a contractor's reasonable proposal for inspection or a reasonable offer to remedy.  Clarifies the consequences of rejecting an offer of settlement.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  201-26

Honolulu, Hawaii

                , 2026

RE:   H.B. No. 1900

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 1900 entitled:

"A BILL FOR AN ACT RELATING TO REMEDIES,"

begs leave to report as follows:

     The purpose of this measure is to clarify the process for resolving construction defects.

     Your Committee received testimony in support of this measure from the Hawaiʻi Association of REALTORS and D.R. Horton Hawaii.  Your Committee received testimony in opposition to this measure from the Hawaii Insurers Council; Kasdan Turner Thomson Booth, LLLC; LippSmith LLP; Berding & Weil LLP; and two individuals.

     Your Committee finds that the lack of affordable housing in Hawaii has led to a crisis of increasing homelessness and migration of residents to the continental United States.  Your Committee further finds the rising costs of insurance for developers and improvers of real property have contributed to the increased cost of housing and are a direct result of litigation for construction defects.

     To mitigate the specter of increased costs from frivolous litigation, Act 308, Session Laws of Hawaii 2025 (Act 308), was enacted to provide greater clarity on the process for resolving construction defects under the Contractor Repair Act.  However, your Committee finds that further refinement is necessary to reduce the threat of unnecessary litigation.  This measure implements additional amendments to further the purposes sought under Act 308.

     Your Committee has amended this measure by:

     (1)  Reverting to the existing statutory language with respect to:

          (A)  The ten-year statute of repose for damages based on construction to improve real property;

          (B)  The effect of the ten-year statute of repose on other statutes of limitations;

          (C)  The contents of a notice of claim for construction defect; and

          (D)  The timeframe for a claimant to accept a proposal to inspect the premises for an asserted construction defect; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1900, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1900, H.D. 1, and be referred to your Committee on Judiciary & Hawaiian Affairs.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,