HB 420: Contractor Repair Act; Statute of Repose; Notice of Claim; Inspection; Repair; Rejection of Claims; Construction Defect; Mediation; Statute of Limitations
- Session Year: 2025-2026
- House: House
- Latest Version Date: 2025-04-24
Current Status:
Passed
(2025-05-01: Transmitted to Governor.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Final Decking
Enacted
What does this bill do?
The bill clarifies that the 10-year rule that bars most construction-defect claims applies to contract, tort, and statutory claims and says an improvement is "substantially complete" when a certificate of occupancy is issued or a notice of completion is filed. It requires a written notice that names the contractor and describes the alleged defect, lets contractors inspect and test (to be completed within nine months), and requires them to offer repairs, money, or both, which the person making the claim may accept or reject within the stated period. The bill also requires the parties to try mediation (to be completed within 12 months) and lets a person file suit before a deadline expires while pausing the lawsuit while repairs or mediation proceed.
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
Clarifies that the statute of repose applies to contract, tort, and statutory claims. Clarifies the required contents of a notice of claim of a construction defect served on a contractor. Clarifies the process and time frame by which a claimant may accept or reject a contractor's offer to settle and authorize repairs. Clarifies the mediation process for construction defect claims. Clarifies the statute of limitation or repose for construction defect claims. (CD1)
Clarifies the applicability of the statute of repose to apply to contract, tort, and statutory claims. Clarifies the required contents of a notice of claim of a construction defect served on a contractor. Clarifies the process and time frame by which a claimant may accept or reject a contractor's offer to settle and authorize repairs. Clarifies the mediation process for construction defect claims. Clarifies the statute of limitation or response for construction defect claims. Effective 7/1/3000. (SD2)
Clarifies the applicability of the statute of repose to apply to contract, tort, and statutory claims. Clarifies the required contents of a notice of claim of a construction defect served on a contractor. Requires claimants to comply with provisions of the Contractor Repair Act before proceeding with or joining in a class action. Clarifies the process and time frame by which a claimant may accept or reject a contractor's offer to settle and authorize repairs. Effective 7/1/3000. (SD1)
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. Effective 7/1/3000. (HD3)
Clarifies the applicability of the statute of repose for actions arising from construction defects. Specifies that a plaintiff's failure to plead with particularity the claim of fraudulent concealment, if the plaintiff raises the defense, subjects the plaintiff to liability for the costs incurred by the defendant, including attorneys' fees and costs. Clarifies the required contents of a notice of claim of construction defect served on a contractor. Amends the process and time frame for a claimant to accept a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs. 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. Effective 7/1/3000. (HD2)
Clarifies the applicability of the statute of repose for actions arising from construction defects. Clarifies the required contents of a notice of claim of construction defect served on a contractor. Amends the process and time frame for a claimant to accept a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs. 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. Effective 7/1/3000. (HD1)
Clarifies the applicability of the statute of repose for actions arising from construction defects. Clarifies the required contents of a notice of claim of construction defect served on a contractor. Amends the process and time frame for a claimant to accept a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs. 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.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
420 |
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THIRTY-THIRD LEGISLATURE, 2025 |
H.D. 3 |
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STATE OF HAWAII |
S.D. 2 |
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C.D. 1 |
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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 two years after
the cause of action has accrued, but in any event not] 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).
[(b)]
(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.
[The term "improvement" as used in this section shall have
the same meaning as in section 507-41 and the phrase "date of
completion" as used in this section shall mean the time when there has been
substantial completion of the improvement or the improvement has been
abandoned. The filing of an affidavit of
publication and notice of completion with the circuit court where the property
is situated in compliance with section 507-43(f) shall be prima facie evidence
of the date of completion.] 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.
[(c)]
(e) Nothing in this section shall
exclude or limit the liability provisions as set forth in the products
liability laws.
(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."
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 [describe the
claim in detail and include the results of any testing done.]:
(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 [set forth] 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.
[(b)] (c) 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.
[(c)] (d) 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 [(b)(2),] (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 [provide access to:] 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 [such] access. If access to an individual condominium unit
is necessary, and the association is unable to obtain [such] 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.
[(d)] (e) 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.
[Such] 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) 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 [is]
shall not be admissible except to determine entitlement to
recovery of 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."
SECTION 5. Section 672E-7, Hawaii Revised Statutes, is amended to read as follows:
"[[]§672E-7[]] Mediation.
(a) If
the parties are unable to resolve the claim pursuant to section 672E‑5 or
672E‑6, all parties shall attempt to resolve the dispute through
mediation, even if mediation is not otherwise ordered or mandated by contract
or by law[.]; provided that the parties shall not be required to
attempt to resolve the dispute through mediation more than once.
(b) Mediation shall be completed within twelve months of the filing of the notice of the claim, unless the parties agree or the court orders otherwise."
SECTION 6. Section 672E-8, Hawaii Revised Statutes, is amended to read as follows:
"[[]§672E-8[]] Statute of limitations on actions exception. If an applicable statute of limitation or
repose would preclude an action after the notice of claim has been served but
before the dispute is resolved under this chapter, the claimant may file an
action against the contractor but the action shall be immediately stayed
pending the contractor's opportunity to repair under section 672E-4, or
submission of the dispute to mediation under section 672E-7[.];
provided that no action shall be filed pursuant to this section more than six
months before the end of the applicable limitation or repose period. This section shall not be construed to revive
a statutory period of limitations on actions that have expired prior to the
date on which a claimant's written notice of claim is served. After the sending of the initial notice of
claim, a claimant and a contractor, by written mutual agreement, may alter the
procedure for the notice of claim under this section."
SECTION 7. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect upon its approval.
Report Title:
Contractor Repair Act; Statute of Repose; Notice of Claim; Inspection; Repair; Rejection of Claims; Construction Defect; Mediation; Statute of Limitations
Description:
Clarifies that the statute of repose applies to contract, tort, and statutory claims. Clarifies the required contents of a notice of claim of a construction defect served on a contractor. Clarifies the process and time frame by which a claimant may accept or reject a contractor's offer to settle and authorize repairs. Clarifies the mediation process for construction defect claims. Clarifies the statute of limitation or repose for construction defect claims. (CD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
420 |
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THIRTY-THIRD LEGISLATURE, 2025 |
H.D. 3 |
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STATE OF HAWAII |
S.D. 2 |
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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 two years after
the cause of action has accrued, but in any event not] 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 chapter 657, 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).
[(b)]
(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.
[The term "improvement" as used in this section shall have
the same meaning as in section 507-41 and the phrase "date of
completion" as used in this section shall mean the time when there has been
substantial completion of the improvement or the improvement has been
abandoned. The filing of an affidavit of
publication and notice of completion with the circuit court where the property
is situated in compliance with section 507-43(f) shall be prima facie evidence
of the date of completion.] 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.
[(c)]
(e) Nothing in this section shall
exclude or limit the liability provisions as set forth in the products
liability laws.
(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 defined in section 507-41."
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 [describe the
claim in detail and include the results of any testing done.]:
(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 [set forth] 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.
[(b)] (c) 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.
[(c)] (d) 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 [(b)(2),] (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 [provide access to:] 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 [such] access. If access to an individual condominium unit
is necessary, and the association is unable to obtain [such] 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.
[(d)] (e) 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.
[Such] 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), (e)(1), (e)(2), or (e)(3), the claimant, within thirty or forty-five days, whichever applies pursuant to section 672E‑5(a), may accept the offer and authorize the contractor to proceed with any repairs offered under subsection (b)(1), (e)(1), or (e)(3), or deny the offer.
(g) 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 [is]
shall not be admissible except to determine entitlement to
recovery of 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."
SECTION 5. Section 672E-7, Hawaii Revised Statutes, is amended to read as follows:
"[[]§672E-7[]] Mediation.
(a) If
the parties are unable to resolve the claim pursuant to section 672E‑5 or
672E‑6, all parties shall attempt to resolve the dispute through
mediation, even if mediation is not otherwise ordered or mandated by contract
or by law[.]; provided that the parties shall not be required to
attempt to resolve the dispute through mediation more than once.
(b) Mediation shall be completed within twelve months of the filing of the notice of the claim, unless the parties agree or the court orders otherwise."
SECTION 6. Section 672E-8, Hawaii Revised Statutes, is amended to read as follows:
"[[]§672E-8[]] Statute of limitations on actions exception. If an applicable statute of limitation or
repose would preclude an action after the notice of claim has been served but
before the dispute is resolved under this chapter, the claimant may file an
action against the contractor but the action shall be immediately stayed
pending the contractor's opportunity to repair under section 672E-4, or
submission of the dispute to mediation under section 672E-7[.];
provided that no action shall be filed pursuant to this section more than six
months before the end of the applicable limitation or repose period. This section shall not be construed to revive
a statutory period of limitations on actions that have expired prior to the
date on which a claimant's written notice of claim is served. After the sending of the initial notice of
claim, a claimant and a contractor, by written mutual agreement, may alter the
procedure for the notice of claim under this section."
SECTION 7. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect on July 1, 3000.
Report Title:
Statute of Repose; Contractor Repair Act; Notice of Claim; Inspection; Repair; Rejection of Claims; Construction Defect; Mediation; Statute of Limitations
Description:
Clarifies the applicability of the statute of repose to apply to contract, tort, and statutory claims. Clarifies the required contents of a notice of claim of a construction defect served on a contractor. Clarifies the process and time frame by which a claimant may accept or reject a contractor's offer to settle and authorize repairs. Clarifies the mediation process for construction defect claims. Clarifies the statute of limitation or response for construction defect claims. Effective 7/1/3000. (SD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
420 |
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THIRTY-THIRD LEGISLATURE, 2025 |
H.D. 3 |
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STATE OF HAWAII |
S.D. 1 |
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A BILL FOR AN ACT
RELATING TO REMEDIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the existing language of the Contractor Repair Act and the statute of repose, section 657-8, Hawaii Revised Statutes, has led to inconsistent application in the courts, which at times has permitted incomplete or inadequate claims to go forward prematurely. Therefore, it is the intent of the legislature to amend the Contractor Repair Act to ensure that its implementation serves both homeowners and homebuilders in promoting early and efficient resolution of construction defect claims.
Accordingly, the purpose of this Act is to:
(1) Clarify that the statute of repose applies to contract, tort, and statutory claims;
(2) Clarify the required contents of a notice of claim of a construction defect served on a contractor;
(3) Require a claimant to satisfy the notice, offer, and inspection requirements under the statute of repose before proceeding with or joining a class action; and
(4) Clarify the process and time frame by which a claimant may accept or reject a contractor's offer to settle and authorize repairs.
SECTION 2. Section 657-8, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(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 two years after the cause of action has accrued, but in any event not more than ten years after the date of completion of the improvement."
SECTION 3. 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 [describe the
claim in detail and include the results of any testing done.]:
(1) State that the claimant asserts a claim against the contractor for a construction defect in the design, construction, or remodeling 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 [set forth] 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 expert reports, photographs, videotapes, and any testing performed, if obtained by the claimant.
(c) Each individual claimant or 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 brought under this chapter unless that person has first complied with the requirements of this chapter.
[(b)] (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.
[(c)] (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 4. 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 [(b)(2),] (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 [provide access to:] 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 [such] access. If access to an individual condominium unit
is necessary, and the association is unable to obtain [such] 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 dwellings 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) 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.
[Such] 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.
(e) Upon receipt of the offer made under subsection (b)(1), (d)(1), (d)(2), or (d)(3), the claimant, within thirty or forty-five days, whichever applies pursuant to section 672E‑5(a), may accept the offer and authorize the contractor to proceed with any repairs offered under subsection (b)(1), (d)(1), or (d)(3), or deny the offer.
(f) 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 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 3000.
Report Title:
Statute of Repose; Contractor Repair Act; Notice of Claim; Inspection; Repair; Rejection of Claims
Description:
Clarifies the applicability of the statute of repose to apply to contract, tort, and statutory claims. Clarifies the required contents of a notice of claim of a construction defect served on a contractor. Requires claimants to comply with provisions of the Contractor Repair Act before proceeding with or joining in a class action. Clarifies the process and time frame by which a claimant may accept or reject a contractor's offer to settle and authorize repairs. Effective 7/1/3000. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
420 |
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THIRTY-THIRD LEGISLATURE, 2025 |
H.D. 3 |
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STATE OF HAWAII |
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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 two years after the cause of action has accrued, but
in any event not] 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 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. [The term
"improvement" as used in this section shall have the same meaning as
in section 507-41 and the phrase "date of completion" as used in this
section shall mean the time when there has been substantial completion of the
improvement or the improvement has been abandoned. The filing of an affidavit of publication and
notice of completion with the circuit court where the property is situated in
compliance with section 507-43(f) shall be prima facie evidence of the date of
completion.] 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 purposes of determining the limitations period set forth in this section.
(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.
[(c)] (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 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 [describe]:
(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 and include the results of any testing done.] with
particularity and specificity sufficient to determine the circumstances
constituting the alleged construction defect.
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 set forth 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.
[(b)] (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.
[(c)] (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 [(b)(2),] (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 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 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 [such] access. If access to an individual condominium unit
is necessary, and the association is unable to obtain [such] 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) 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. [Such] 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.
(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 [is]
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 on July 1, 3000.
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. Effective 7/1/3000. (HD3)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
420 |
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THIRTY-THIRD LEGISLATURE, 2025 |
H.D. 2 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO REMEDIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Hawaii is in a major housing crisis, which continues to worsen, and has been further exacerbated by the impacts of the August 2023 Maui wildfires. Residents of Hawaii face the highest housing costs in the nation and the median single-family home and condominium prices have more than tripled since the 1990s. A substantial contributing factor to the high cost of housing is the cost of anticipated litigation and insurance requirements necessary to protect against future claims, which disincentivizes the construction of homes. Developers or improvers of real property are required to insure against deficiencies of improvements. The proliferation of construction defect litigation results in increased housing prices directly, through passed-on insurance costs, and indirectly, through lower levels of housing supply. This has been exacerbated in recent years with the practice of filing unrestricted construction defect complaints, which can be filed with no identified defect, and complaints that do not allow a developer or improver of real property to inspect or remedy potential defects. This results in settlements that often do not benefit the homeowner, higher insurance costs, and lower housing production.
The legislature finds that the current language contained in the Contractor Repair Act and the statute of repose have failed in their purpose to assist the parties in the early resolution of claims and provide a clear framework for resolution of construction defect claims. The lack of clarity has also reduced the effectiveness of these laws by making it more difficult for all parties to resolve construction defect disputes fairly, resulting in inconsistent rulings and prolonging the dispute-resolution process.
Therefore, the purpose of this Act is to:
(1) Clarify the applicability of the statute of repose for actions arising from construction defects;
(2) Specify that a plaintiff's failure to plead with particularity the claim of fraudulent concealment, if the plaintiff raises the defense, subjects the plaintiff to liability for costs incurred by the defendant;
(3) Clarify the required contents of a notice of claim of construction defect served on a contractor;
(4) Amend the process and time frame for a claimant to accept a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs;
(5) Limit the amount a claimant can recover if the claimant rejects a contractor's reasonable proposal for inspection or a reasonable offer to remedy; and
(6) Clarify the consequences of rejecting an offer of settlement.
SECTION 2. 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 two years after the cause of action has accrued, but in
any event [not] no more than ten years after the date of
completion of the improvement.
(b)
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. [The term
"improvement" as used in this section shall have the same meaning as
in section 507-41 and the phrase "date of completion" as used in this
section shall mean the time when there has been substantial completion of the
improvement or the improvement has been abandoned. The filing of an affidavit of publication and
notice of completion with the circuit court where the property is situated in
compliance with section 507-43(f) shall be prima facie evidence of the date of
completion.] An improvement shall
be deemed substantially complete upon the earliest of the following:
(1) The issuance of a temporary certificate of occupancy;
(2) The issuance of a certificate of occupancy; or
(3) 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 purposes of determining the limitations period set forth in this section.
(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.
[(c)] (d) Nothing in this section shall exclude or
limit the liability provisions as set forth in the products liability laws.
(e) If a plaintiff invokes the doctrine of fraudulent concealment to toll the limitation under subsection (a) and the plaintiff fails to plead with particularity the claim of fraudulent concealment, then the plaintiff shall be liable for the costs incurred by the defendant, including attorneys' fees and costs directly related to responding to the pleading.
(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.
(g) For 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 has resulted in physical harm to a person or significant damage to the performance of a building or its systems; provided that, without limiting the foregoing, it shall not be deemed a "material violation" of an applicable building code if:
(1) The person or party that is alleged to have violated the building code obtained the required building permits;
(2) The local government or public agency with authority to enforce the building code approved the plans;
(3) The construction project passes all required inspections under the code; and
(4) There is no personal injury or damage to property other than the property that is the subject of the permits, plans, and inspections, unless the person or party knew or should have known that the material violation existed during construction."
SECTION 3. 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 [describe]:
(1) State that the claimant asserts a claim against the contractor for a construction defect in the design, construction, or remodeling of a dwelling or premises; and
(2) Describe
the claim, with particularity, specificity, and in detail [and
include the results of any testing done.] sufficient to determine the
circumstances constituting the alleged construction defect and damages
resulting from the construction defect.
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 set forth 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, actual 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: expert reports, photographs, videotapes, and any testing performed.
(c) Each individual claimant or 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.
[(b)] (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.
[(c)] (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 4. 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 (b)(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 provide access to:] the claimant
shall accept a contractor's proposal.
After accepting the contractor's proposal for inspection, 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 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 [such] access. If access to an individual condominium unit
is necessary, and the association is unable to obtain [such] 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) 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. [Such] 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.
(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 5. 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 is not
admissible except to determine entitlement to recovery of attorneys' fees
and costs[.] 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.
(e) If the judgment or award obtained in a
subsequent proceeding is not more favorable than the offer[,] of
settlement, the offeree shall pay the costs incurred by the offeror after
the making of the offer[.] and the offeree shall not be entitled to
recover attorneys' fees and costs incurred after the offer was made. The fact that an offer is made and not
accepted does not preclude a subsequent offer."
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 3000.
Report Title:
Contractor Repair Act; Notice of Claim; Inspection; Repair; Rejection of Claims; Limitations on Recovery; Statute of Repose
Description:
Clarifies the applicability of the statute of repose for actions arising from construction defects. Specifies that a plaintiff's failure to plead with particularity the claim of fraudulent concealment, if the plaintiff raises the defense, subjects the plaintiff to liability for the costs incurred by the defendant, including attorneys' fees and costs. Clarifies the required contents of a notice of claim of construction defect served on a contractor. Amends the process and time frame for a claimant to accept a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs. 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. Effective 7/1/3000. (HD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
420 |
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THIRTY-THIRD LEGISLATURE, 2025 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO REMEDIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Hawaii is in a major housing crisis, which continues to worsen, and has been further exacerbated by the impacts of the August 2023 Maui wildfires. Residents of Hawaii face the highest housing costs in the nation and the median single-family home and condominium prices have more than tripled since the 1990s. A substantial contributing factor to the high cost of housing is the cost of anticipated litigation and insurance requirements necessary to protect against future claims, which disincentivizes the construction of homes. Developers or improvers of real property are required to insure against deficiencies of improvements. The proliferation of construction defect litigation results in increased housing prices directly, through passed-on insurance costs, and indirectly, through lower levels of housing supply. This has been exacerbated in recent years with the practice of filing unrestricted constructed defect complaints, which can be filed with no identified defect, and complaints that do not allow a developer or improver of real property to inspect or remedy potential defects. This results in settlements that often do not benefit the homeowner, higher insurance costs, and lower housing production.
The legislature finds that the current language contained in the Contractor Repair Act and the statute of repose have failed in their purpose to assist the parties in the early resolution of claims and provide a clear framework for resolution of construction defect claims. The lack of clarity has also reduced the effectiveness of these laws by making it more difficult for all parties to resolve construction defect disputes fairly, resulting in inconsistent rulings and prolonging the dispute-resolution process.
Therefore, the purpose of this Act is to:
(1) Clarify the statute of repose to make it clear that it applies to contract, tort, and statutory claims, fraudulent concealment is not a defense with respect to the repose period, and require a violation of a building code to be material to be actionable;
(2) Clarify the required contents of a notice of claim of construction defect served on a contractor;
(3) Amend the process and time frame for a claimant to accept a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs;
(4) Limit the amount a claimant can recover if the claimant rejects a contractor's reasonable proposal for inspection or a reasonable offer to remedy; and
(5) Clarify the consequences of rejecting an offer of settlement.
SECTION 2. 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 two years after the cause of action has accrued, but in
any event [not] no more than ten years after the date of
completion of the improvement.
(b)
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. [The term
"improvement" as used in this section shall have the same meaning as
in section 507-41 and the phrase "date of completion" as used in this
section shall mean the time when there has been substantial completion of the
improvement or the improvement has been abandoned. The filing of an affidavit of publication and
notice of completion with the circuit court where the property is situated in
compliance with section 507-43(f) shall be prima facie evidence of the date of
completion.] An improvement shall
be deemed substantially complete upon the earliest of the following:
(1) The issuance of a temporary certificate of occupancy;
(2) The issuance of a certificate of occupancy; or
(3) The filing of an affidavit of publication and notice of completion within the circuit court 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 purposes of determining the limitations period set forth in this section.
(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.
[(c)] (d) Nothing in this section shall exclude or
limit the liability provisions as set forth in the products liability laws.
(e) The doctrine of fraudulent concealment, as used for a defense to statute of limitations, shall not apply to the ten-year limitations period set forth in subsection (a).
(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.
(g) For 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 has resulted in physical harm to a person or significant damage to the performance of a building or its systems; provided that, without limiting the foregoing, it shall not be deemed a "material violation" of an applicable building code if:
(1) The person or party that is alleged to have violated the building code obtained the required building permits;
(2) The local government or public agency with authority to enforce the building code approved the plans;
(3) The construction project passes all required inspections under the code; and
(4) There is no personal injury or damage to property other than the property that is the subject of the permits, plans, and inspections, unless the person or party knew or should have known that the material violation existed during construction."
SECTION 3. 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 [describe]:
(1) State that the claimant asserts a claim against the contractor for a construction defect in the design, construction, or remodeling of a dwelling or premises; and
(2) Describe
the claim, with particularity, specificity, and in detail [and
include the results of any testing done.] sufficient to determine the
circumstances constituting the alleged construction defect and damages
resulting from the construction defect.
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 set forth 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, actual 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: expert reports, photographs, videotapes, and any testing performed.
(c) Each individual claimant or 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.
[(b)] (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.
[(c)] (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 4. 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 (b)(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 provide access to:] the claimant
shall accept a contractor's proposal.
After accepting the contractor's proposal for inspection, 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 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 [such] access. If access to an individual condominium unit
is necessary, and the association is unable to obtain [such] 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) 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. [Such] 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.
(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 5. 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 is not
admissible except to determine entitlement to recovery of attorneys' fees
and costs[.] 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.
(e) If the judgment or award obtained in a
subsequent proceeding is not more favorable than the offer[,] of
settlement, the offeree shall pay the costs incurred by the offeror after
the making of the offer[.] and the offeree shall not be entitled to
recover attorneys' fees and costs incurred after the offer was made. The fact that an offer is made and not
accepted does not preclude a subsequent offer."
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 3000.
Report Title:
Contractor Repair Act; Notice of Claim; Inspection; Repair; Rejection of Claims; Limitations on Recovery; Statute of Repose
Description:
Clarifies the applicability of the statute of repose for actions arising from construction defects. Clarifies the required contents of a notice of claim of construction defect served on a contractor. Amends the process and time frame for a claimant to accept a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs. 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. Effective 7/1/3000. (HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
420 |
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THIRTY-THIRD LEGISLATURE, 2025 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to REMEDIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Hawaii is in a major housing crisis, which continues to worsen, and has been further exacerbated by the impacts of the August 2023 Maui wildfires. Residents of Hawaii face the highest housing costs in the nation and the median single-family home and condominium prices have more than tripled since the 1990s. A substantial contributing factor to the high cost of housing is the cost of anticipated litigation and insurance requirements necessary to protect against future claims, which disincentivizes the construction of homes. Developers or improvers of real property are required to insure against deficiencies of improvements. The proliferation of construction defect litigation results in increased housing prices directly, through passed-on insurance costs, and indirectly, through lower levels of housing supply. This has been exacerbated in recent years with the practice of filing unrestricted constructed defect complaints, which can be filed with no identified defect, and complaints that do not allow a developer or improver of real property to inspect or remedy potential defects. This results in settlements that often do not benefit the homeowner, higher insurance costs, and lower housing production.
The legislature finds that the current language contained in the Contractor Repair Act, codified in chapter 672E, Hawaii Revised Statutes, and the statute of repose, section 657-8, Hawaii Revised Statutes, have failed in their purpose to assist the parties in the early resolution of claims and provide a clear framework for resolution of construction defect claims. The lack of clarity has also reduced the effectiveness of these statutes by making it more difficult for all parties to resolve construction defect disputes fairly, resulting in inconsistent rulings and prolonging the dispute-resolution process.
Therefore, the purpose of this Act is to:
(1) Clarify the statute of repose to make it clear that it applies to contract, tort, and statutory claims, fraudulent concealment is not a defense with respect to the repose period, and require a violation of a building code to be material to be actionable;
(2) Clarify the required contents of a notice of claim of construction defect served on a contractor;
(3) Amend the process and time frame for a claimant to accept a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs;
(4) Limit the amount a claimant can recover if the claimant rejects a contractor's reasonable proposal for inspection or a reasonable offer to remedy; and
(5) Clarify the consequences of rejecting an offer of settlement.
SECTION 2. 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 two years after the cause of action has accrued, but in
any event [not] no more than ten years after the date of
completion of the improvement.
(b)
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. [The term
"improvement" as used in this section shall have the same meaning as
in section 507-41 and the phrase "date of completion" as used in this
section shall mean the time when there has been substantial completion of the
improvement or the improvement has been abandoned. The filing of an affidavit of publication and
notice of completion with the circuit court where the property is situated in
compliance with section 507-43(f) shall be prima facie evidence of the date of
completion.] An improvement shall
be deemed substantially complete upon the earliest of the following:
(1) The issuance of a temporary certificate of occupancy;
(2) The issuance of a certificate of occupancy; or
(3) The filing of an affidavit of publication and notice of completion within the circuit court 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 purposes of determining the limitations period set forth in this section.
(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.
[(c)] (d) Nothing in this section shall exclude or
limit the liability provisions as set forth in the products liability laws.
(e) The doctrine of fraudulent concealment, as used for a defense to statute of limitations, shall not apply to the ten-year limitations period set forth in subsection (a).
(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.
(g) For 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 has resulted in physical harm to a person or significant damage to the performance of a building or its systems; provided that, without limiting the foregoing, it shall not be deemed a "material violation" of an applicable building code if the person or party that is alleged to have violated the building code obtained the required building permits, the local government or public agency with authority to enforce the building code approved the plans, the construction project passes all required inspections under the code, and there is no personal injury or damage to property other than the property that is the subject of the permits, plans, and inspections, unless the person or party knew or should have known that the material violation existed during construction."
SECTION 3. 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 [describe]:
(1) State that the claimant asserts a claim against the contractor for a construction defect in the design, construction, or remodeling of a dwelling or premises; and
(2) Describe
the claim, with particularity, specificity, and in detail [and
include the results of any testing done.] sufficient to determine the
circumstances constituting the alleged construction defect and damages
resulting from the construction defect.
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 set forth 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, actual 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: expert reports, photographs, videotapes, and any testing performed.
(c) Each individual claimant or 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.
[(b)] (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.
[(c)] (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 4. 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 (b)(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 provide access to:] the claimant
shall accept a contractor's proposal.
After accepting the contractor's proposal for inspection, 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 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 [such] access. If access to an individual condominium unit
is necessary, and the association is unable to obtain [such] 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) 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. [Such] 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.
(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 5. 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 is not
admissible except to determine entitlement to recovery of attorneys' fees
and costs[.] 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.
(e) If the judgment or award obtained in a
subsequent proceeding is not more favorable than the offer[,] of
settlement, the offeree shall pay the costs incurred by the offeror after
the making of the offer[.] and the offeree shall not be entitled to
recover attorneys' fees and costs incurred after the offer was made. The fact that an offer is made and not
accepted does not preclude a subsequent offer."
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 2025.
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INTRODUCED BY: |
_____________________________ |
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Report Title:
Contractor Repair Act; Notice of Claim; Inspection; Repair; Rejection of Claims; Limitations on Recovery; Statute of Repose
Description:
Clarifies the applicability of the statute of repose for actions arising from construction defects. Clarifies the required contents of a notice of claim of construction defect served on a contractor. Amends the process and time frame for a claimant to accept a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs. 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.
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Date
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Status
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| May 1, 2025 | Transmitted to Governor. |
| May 2, 2025 | Received notice of passage on Final Reading in House (Hse. Com. No. 821). |
| May 1, 2025 | Received notice of Final Reading (Sen. Com. No. 888). |
| Apr 30, 2025 | Passed Final Reading as amended in CD 1 with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Pierick excused (2). |
| Apr 30, 2025 | Passed Final Reading, as amended (CD 1). Ayes, 25; Aye(s) with reservations: none . 0 No(es): none. 0 Excused: none. |
| Apr 24, 2025 | 48 Hrs. Notice (as amended CD 1) 04-30-25 |
| Apr 24, 2025 | Reported from Conference Committee as amended CD 1 (Conf. Com. Rep. No. 41). |
| Apr 24, 2025 | Forty-eight (48) hours notice Wednesday, 04-30-25. |
| Apr 24, 2025 | Reported from Conference Committee (Conf Com. Rep. No. 41) as amended in (CD 1). |
| Apr 23, 2025 | The Conference Committee recommends that the measure be Passed, with Amendments. The votes were as follows: 5 Ayes: Representative(s) Evslin, Matayoshi, Tarnas, Miyake, Pierick; Ayes with reservations: none; 0 Noes: none; and 0 Excused: none. |
| Apr 23, 2025 | The Conference committee recommends that the measure be PASSED, WITH AMENDMENTS. The votes of the Senate Conference Managers were as follows: 4 Aye(s): Senator(s) Keohokalole, Rhoads, Fukunaga, Richards; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Awa. |
| Apr 22, 2025 | Conference committee meeting scheduled for 04-23-25 1:35PM; Conference Room 224. |
| Apr 17, 2025 | Received notice of Senate conferees (Sen. Com. No. 826). |
| Apr 17, 2025 | Senate Conferees Appointed: Keohokalole Chair; Rhoads Co-Chair; Fukunaga, Richards, Awa. |
| Apr 15, 2025 | Received notice of appointment of House conferees (Hse. Com. No. 732). |
| Apr 14, 2025 | House Conferees Appointed: Evslin, Matayoshi, Tarnas Co-Chairs; Miyake, Pierick. |
| Apr 11, 2025 | Received notice of disagreement (Hse. Com. No. 704). |
| Apr 10, 2025 | House disagrees with Senate amendment (s). |
| Apr 8, 2025 | Returned from Senate (Sen. Com. No. 632) in amended form (SD 2). |
| Apr 8, 2025 | Report adopted; Passed Third Reading, as amended (SD 2). Ayes, 25; Aye(s) with reservations: none . Noes, 0 (none). Excused, 0 (none). Transmitted to House. |
| Apr 4, 2025 | 48 Hrs. Notice 04-08-25. |
| Apr 4, 2025 | Reported from JDC (Stand. Com. Rep. No. 1840) with recommendation of passage on Third Reading, as amended (SD 2). |
| Apr 3, 2025 | The committee(s) on JDC recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in JDC were as follows: 5 Aye(s): Senator(s) Rhoads, Gabbard, Chang, San Buenaventura, Awa; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none. |
| Mar 28, 2025 | The committee(s) on JDC will hold a public decision making on 04-03-25 10:01AM; Conference Room 016 & Videoconference. |
| Mar 21, 2025 | Report adopted; Passed Second Reading, as amended (SD 1) and referred to JDC. |
| Mar 21, 2025 | Reported from CPN (Stand. Com. Rep. No. 1336) with recommendation of passage on Second Reading, as amended (SD 1) and referral to JDC. |
| Mar 19, 2025 | The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in CPN were as follows: 4 Aye(s): Senator(s) Keohokalole, Fukunaga, McKelvey, Awa; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Richards. |
| Mar 14, 2025 | The committee(s) on CPN deferred the measure until 03-19-25 10:00AM; Conference Room 229 & Videoconference. |
| Mar 7, 2025 | The committee(s) on CPN has scheduled a public hearing on 03-14-25 9:30AM; Conference Room 229 & Videoconference. |
| Mar 6, 2025 | Referred to CPN, JDC. |
| Mar 6, 2025 | Passed First Reading. |
| Mar 6, 2025 | Received from House (Hse. Com. No. 233). |
| Mar 4, 2025 | Passed Third Reading as amended in HD 3 with Representative(s) Belatti, Garcia, Reyes Oda, Shimizu voting aye with reservations; Representative(s) Muraoka voting no (1) and Representative(s) Pierick, Ward excused (2). Transmitted to Senate. |
| Feb 28, 2025 | Forty-eight (48) hours notice Tuesday, 03-04-25. |
| Feb 28, 2025 | Reported from JHA (Stand. Com. Rep. No. 1162) as amended in HD 3, recommending passage on Third Reading. |
| Feb 26, 2025 | The committee on JHA recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 9 Ayes: Representative(s) Tarnas, Poepoe, Hashem, Takayama, Todd; Ayes with reservations: Representative(s) Belatti, Perruso, Garcia, Shimizu; Noes: none; and 2 Excused: Representative(s) Cochran, Kahaloa. |
| Feb 21, 2025 | Bill scheduled to be heard by JHA on Wednesday, 02-26-25 2:00PM in House conference room 325 VIA VIDEOCONFERENCE. |
| Feb 14, 2025 | Report adopted; referred to the committee(s) on JHA as amended in HD 2 with Representative(s) Alcos, Perruso, Shimizu voting aye with reservations; Representative(s) Garcia, Muraoka, Pierick voting no (3) and Representative(s) Cochran, Matayoshi, Poepoe, Ward excused (4). |
| Feb 14, 2025 | Reported from CPC (Stand. Com. Rep. No. 787) as amended in HD 2, recommending referral to JHA. |
| Feb 12, 2025 | The committee on CPC recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 5 Ayes: Representative(s) Chun, Ilagan, Ichiyama, Kong, Marten; Ayes with reservations: none; 2 Noes: Representative(s) Iwamoto, Pierick; and 3 Excused: Representative(s) Matayoshi, Lowen, Tam. |
| Feb 10, 2025 | Bill scheduled to be heard by CPC on Wednesday, 02-12-25 2:00PM in House conference room 329 VIA VIDEOCONFERENCE. |
| Feb 6, 2025 | Passed Second Reading as amended in HD 1 and referred to the committee(s) on CPC with Representative(s) Shimizu voting aye with reservations; Representative(s) Garcia, Muraoka voting no (2) and Representative(s) Ward excused (1). |
| Feb 6, 2025 | Reported from HSG (Stand. Com. Rep. No. 220) as amended in HD 1, recommending passage on Second Reading and referral to CPC. |
| Jan 31, 2025 | The committee on HSG recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 7 Ayes: Representative(s) Evslin, Miyake, Grandinetti, Kila, La Chica, Pierick; Ayes with reservations: Representative(s) Muraoka; Noes: none; and 2 Excused: Representative(s) Cochran, Kitagawa. |
| Jan 28, 2025 | Bill scheduled to be heard by HSG on Friday, 01-31-25 9:15AM in House conference room 430 VIA VIDEOCONFERENCE. |
| Jan 21, 2025 | Referred to HSG, CPC, JHA, referral sheet 1 |
| Jan 17, 2025 | Introduced and Pass First Reading. |
| Jan 16, 2025 | Pending introduction. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Apr 30, 2025 | Final Reading | House Floor |
Passed |
|
| Apr 30, 2025 | Final Reading | Senate Floor |
Passed |
|
| Apr 8, 2025 | Third Reading | Senate Floor |
Passed |
|
| Apr 3, 2025 | The committee(s) on JDC recommend(s) that the measure be PASSED, WITH AMENDMENTS | Senate Standing Committee on Judiciary |
Passed |
|
| Mar 19, 2025 | The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS | Senate Standing Committee on Commerce and Consumer Protection |
Passed |
|
| Mar 4, 2025 | Third Reading | House Floor |
Passed |
|
| Feb 26, 2025 | The committee on JHA recommend that the measure be PASSED, WITH AMENDMENTS | House Standing Committee on Judiciary & Hawaiian Affairs |
Passed |
|
| Feb 12, 2025 | The committee on CPC recommend that the measure be PASSED, WITH AMENDMENTS | House Standing Committee on Consumer Protection & Commerce |
Passed |
|
| Jan 31, 2025 | The committee on HSG recommend that the measure be PASSED, WITH AMENDMENTS | House Standing Committee on Housing |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| A-Plus Seamless Raingutters, Inc. | ** Support | |
| A-Plus Seamless Raingutters, Inc. | ** Support | |
| A-Plus Seamless Raingutters, Inc. | *** Support | Apr 2, 2025 |
| AARP Hawaiʻi | ** Against | |
| Alii Glass & Metal, Inc. | *** Support | Feb 3, 2025 |
| Aliʻi Glass & Metal, Inc. | ** Support | |
| Alliant Insurance Services, Inc. | ** Support | |
| Alliant Insurance Services, Inc. | ** Support | |
| Ashford + Wriston | *** Support | Feb 3, 2025 |
| Associa Hawaii | ** Support | |
| Austin, Tsutsumi & Associates, Inc. | ** Support | |
| Austin, Tsutsumi & Associates, Inc. | *** Support | Mar 14, 2025 |
| Bergeman Group | ** Against | |
| Bruce Matson Company, Inc. | ** Support | |
| Building Industry Association of Hawaii | ** Support | |
| Case Lombardi A Law Corporation | ** Support | |
| Case Lombardi A Law Corporation | ** Support | |
| Case Lombardi, A Law Corporation | ** Support | |
| Castle & Cooke Hawaii | ** Support | |
| Chamber of Commerce Hawaii | ** Support | |
| Commercial Sheetmetal Co., Inc. | ** Support | |
| Commercial Sheetmetal Co. Inc. | ** Support | |
| Commercial Sheetmetal Co., Inc. | ** Support | |
| Commercial Sheetmetal Co., Inc. | ** Support | |
| D.R. Horton Hawaii | ** Support | |
| Damon Key Leong Kupchak Hastert A Law Corporation | ** Support | |
| First Hawaiian Bank | *** Support | Mar 14, 2025 |
| Fred Lau Hawaiian Landscape Company Inc. | ** Support | |
| Fred Lau Hawaiian Landscape | *** Support | Feb 3, 2025 |
| Fred Lau Hawaiian Landscape Co. Inc. | *** Support | Apr 2, 2025 |
| Fred Lau Hawaiian Landscape Company, Inc. | ** Support | |
| Free Access Coalition | ** Against | |
| Gentry Homes, Ltd. | ** Support | |
| Gray Hong Nojima | *** Support | Apr 2, 2025 |
| Gray Hong Nojima (implied by email) | *** Support | Feb 12, 2025 |
| Gray-Hong-Nojima & Associates | ** Support | |
| Haseko Development, Inc. | ** Support | |
| Hawaii Credit Union League | ** Support | |
| Hawaii Fence Builders | ** Support | |
| Hawaii Fence Builders | *** Support | Mar 14, 2025 |
| Hawaii HomeOwnership Center | ** Support | |
| Hawaii Insurers Council | ** Support | |
| Hawaii Laborers and Employers Cooperation and Education Trust | ** Support | |
| Hawaii LECET | *** Support | Mar 14, 2025 |
| Hawaii Operating Engineers Industry Stabilization Fund Political Action Committee | ** Support | |
| Hawaiian Landscape Company Inc. | *** Support | Mar 14, 2025 |
| Hawaiiana Management Company, Ltd. | ** Support | |
| Hawaiiana Management Company, Ltd. | ** Support | |
| Hawaiʻi Association of REALTORS | ** Support | |
| Hawaiʻi Construction Alliance | ** Support | |
| Hawaiʻi Regional Council of Carpenters | ** Support | |
| Hawaiʻi YIMBY | ** Support | |
| Holomua Collaborative | ** Support | |
| Honolulu Fire Protection | ** Support | |
| Housing Hawaiʻi's Future | ** Support | |
| Inspired Closets Hawaii | ** Support | |
| Inspired Closets Hawaii / MCLOSETS HAWAII | *** Support | Mar 14, 2025 |
| Island Flooring | ** Support | |
| Island Flooring | ** Support | |
| Island Insurance | *** Against | Mar 14, 2025 |
| Jayar Construction Inc. | ** Support | |
| Jayar Construction, Inc. | ** Support | |
| Kadsen Turner Thomson Booth, LLLC | ** Against | |
| Kahiwelo | *** Against | Mar 14, 2025 |
| Kahiwelo HOA | ** Against | |
| Kapolei Chamber of Commerce | ** Support | |
| Kasdan Turner Thomson Booth, LLLC | ** Support | |
| Kasdan Turner Thomson Booth LLLC | *** Against | Mar 14, 2025 |
| Kasdan Turner Thomson Booth, LLLC | ** Against | |
| KY International | ** Support | |
| Land Use Research Foundation of Hawaii | ** Support | |
| Level 5 Drywall | ** Support | |
| LippSmith LLP | ** Against | |
| M2K Construction | *** Support | Feb 3, 2025 |
| Malachi Cleaning, Inc. | ** Support | |
| Mutual Housing Association of Hawaiʻi, Inc. | ** Support | |
| Mutual Housing Association of Hawaiʻi | ** Support | |
| Mutual Housing Association of Hawai`i, Inc. | *** Support | Feb 12, 2025 |
| Mutual Housing Association of Hawaiʻi, Inc. | ** Support | |
| Mutual Housing Association of Hawaiʻi, Inc. | ** Support | |
| Mutual Housing Association of Hawai‘i, Inc. | *** Support | Mar 14, 2025 |
| NAIOP Hawaii | ** Support | |
| Newport Pacific Cabinets, Inc. | ** Support | |
| Newport Pacific Cabinets, Inc. | *** Support | Apr 2, 2025 |
| Nordic PCL Construction, Inc. | ** Support | |
| Operating Engineers Local 3 | *** Support | Apr 2, 2025 |
| PACIFIC RESOURCE PARTNERSHIP | ** Support | |
| Palehua Townhouse Association | ** Against | |
| Palehua Townhouse Association | ** Support | |
| Paradigm Construction LLC | ** Support | |
| Paradigm Hawaii (ParadigmHI) | *** Support | Feb 3, 2025 |
| Plumbers & Fitters UA Local 675 | *** Support | Apr 2, 2025 |
| R&C Roofing Contractors | ** Support | |
| R. M. Towill Corporation | ** Support | |
| Raynor Hawaii Overhead Doors and Gates Inc. | ** Support | |
| Raynor Hawaii Overhead Doors and Gates Inc. | ** Support | |
| Raynor Hawaii Overhead Doors and Gates Inc. | *** Support | Mar 14, 2025 |
| Royal Contracting Co. Ltd. | ** Support | |
| Royal Contracting Co Ltd | *** Support | Apr 2, 2025 |
| Royal Contracting Co. Ltd. | ** Support | |
| Royal Contracting Co., Ltd. | *** Support | Mar 14, 2025 |
| Sinclair Drywall, Inc. | ** Support | |
| Stanford Carr Development, LLC | ** Support | |
| Subcontractors Association of Hawaii | *** Support | Mar 14, 2025 |
| TNH Plumbing, Inc. | ** Support | |
| Tru-Door Hawaii | ** Support | |
| Vinyl Tech and Masonry, Inc. | ** Support | |
| Vinyl Tech & Masonry, Inc. | ** Support | |
| Vinyl Tech and Masontry, Inc. | ** Support | |
| Vinyl Tech and Masonry, Inc. | ** Support | |
| VinylTech and Masonry, Inc. | *** Support | Feb 26, 2025 |
| Young Democrats of Hawaiʻi | ** Support | |
| Young Democrats of Hawaiʻi | ** Support | |
| Young Democrats of Hawai‘i | *** Support | Mar 14, 2025 |
| Young Democrats of Hawai’i | *** Support | Feb 26, 2025 |
| Z Contractors Inc. | ** Support |
CONFERENCE COMMITTEE REP. NO. 41
Honolulu, Hawaii
, 2025
RE: H.B. No. 420
H.D. 3
S.D. 2
C.D. 1
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Madam and Sir:
Your Committee on Conference on the disagreeing vote of the House of Representatives to the amendments proposed by the Senate in H.B. No. 420, H.D. 3, S.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO REMEDIES,"
having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.
The purpose of this measure is to amend the procedures and limitations for resolving disputes regarding construction defects. Specifically, this measure:
(1) With respect to the statute of limitation and repose for actions for damages based on construction defects:
(A) Clarifies that the statute applies to actions based in contract, tort, statute, or otherwise;
(B) Repeals the two-year limitation on actions;
(C) Specifies that the statute shall not be construed to extend any shorter period of limitation in any other limitations statute; and
(D) Clarifies when improvements are deemed substantially complete; and
(2) With respect to the procedures under the Contractor Repair Act:
(A) Clarifies the required contents of a notice of claim of a construction defect served on a contractor and specifies that certain evidence may need to be provided with the notice of claim;
(B) Clarifies a claimant's obligations when a contractor proposes to inspect the premises of the alleged construction defect;
(C) Specifies the timeframe for when inspections and testing must be completed;
(D) Clarifies the procedures for accepting an offer to repair;
(E) Specifies mediation requirements; and
(F) Clarifies the exception to the statute of limitations under the Contractor Repair Act.
Your Committee on Conference has amended this measure by:
(1) Changing the effective date to upon approval; and
(2) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.
As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of H.B. No. 420, H.D. 3, S.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as H.B. No. 420, H.D. 3, S.D. 2, C.D. 1.
Respectfully submitted on behalf of the managers:
|
ON THE PART OF THE SENATE |
|
ON THE PART OF THE HOUSE |
|
____________________________ JARRETT KEOHOKALOLE Chair |
|
____________________________ LUKE A. EVSLIN Co-Chair |
|
____________________________ KARL RHOADS Co-Chair |
|
____________________________ SCOT Z. MATAYOSHI Co-Chair |
|
|
|
____________________________ DAVID A. TARNAS Co-Chair |
|
|
|
|
STAND. COM. REP. NO. 1840
Honolulu, Hawaii
RE: H.B. No. 420
H.D. 3
S.D. 2
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Sir:
Your Committee on Judiciary, to which was referred H.B. No. 420, H.D. 3, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO REMEDIES,"
begs leave to report as follows:
The purpose and intent of this measure is to:
(1) Clarify the applicability of the statute of repose to apply to contract, tort, and statutory claims;
(2) Clarify the required contents of a notice of claim of a construction defect served on a contractor;
(3) Require claimants to comply with provisions of the Contractor Repair Act before proceeding with or joining in a class action; and
(4) Clarify the process and time frame by which a claimant may accept or reject a contractor's offer to settle and authorize repairs.
Your Committee received testimony in support of this measure from the Hawaiʻi Association of REALTORS; Fred Lau Hawaiian Landscape Company, Inc.; Newport Pacific Cabinets, Inc.; Paradigm Construction LLC; Mutual Housing Association of Hawaiʻi, Inc.; Hawaiiana Management Company, Ltd.; Hawaii Laborers and Employers Cooperation and Education Trust; NAIOP Hawaii; Jayar Construction, Inc.; Housing Hawaiʻi's Future; Building Industry Association of Hawaii; Nordic PCL Construction, Inc.; Gentry Homes, Ltd.; Hawaii Operating Engineers Industry Stabilization Fund Political Action Committee; Castle & Cooke Hawaii; Palehua Townhouse Association; Alliant Insurance Services, Inc.; Z Contractors Inc.; Island Flooring; Hawaii Insurers Council; Chamber of Commerce Hawaii; Holomua Collaborative; Young Democrats of Hawaiʻi; Hawaiʻi YIMBY; Hawaiʻi Regional Council of Carpenters; Inspired Closets Hawaii; Kapolei Chamber of Commerce; Hawaii Credit Union League; Case Lombardi A Law Corporation; Commercial Sheetmetal Co., Inc.; Pacific Resource Partnership; D.R. Horton Hawaii; Royal Contracting Co. Ltd.; A-Plus Seamless Raingutters, Inc.; KY International; Tru-Door Hawaii; Vinyl Tech and Masontry, Inc.; and numerous individuals.
Your Committee received testimony in opposition to this measure from Kadsen Turner Thomson Booth, LLLC; LippSmith LLP; and four individuals.
Your Committee received comments on this measure from one individual.
Your Committee finds that it is important to ensure that the court maintains the proper authority when resolving litigation relating to construction defects. This measure will promote fairness to litigants and ensure efficient use of judicial resources during disputes resulting from construction defects.
In light of the concerns raised in testimony, your Committee has amended this measure by:
(1) Deleting legislative findings;
(2) Clarifying that the ten-year statute of repose applies to all actions, whether in contract, tort, statute, or otherwise, and that the standard statute of limitations periods apply to those actions;
(3) Clarifying that an improvement is substantially complete upon the earliest of the issuance of a certificate of occupancy or 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), Hawaii Revised Statutes (HRS);
(4) Requiring each building or improvement be considered as a separate improvement for the purpose of determining the limitations period if the improvement consists of multiple buildings or improvements;
(5) Adding definitions for "date of completion" and "improvement";
(6) Clarifying that a notice of a claim of construction defect may be for any combination of defects in the design, construction, or remodeling of a dwelling or premises;
(7) Deleting language that would have required homeowners to provide expert reports with the notice of a claim of construction defect;
(8) Deleting language that would have:
(A) Required each individual claimant or class member for a claim of construction defect to comply with chapter 672E, HRS; and
(B) Prohibited a person from being permitted to join a class action brought under chapter 672E, HRS, unless that person first complied with the requirements of chapter 672E, HRS;
(9) Requiring inspections and testing performed pursuant to section 672E-4, HRS, to be completed within nine months of the contractor's request to inspect, unless the parties agree or the court orders otherwise;
(10) Inserting language specifying that an offer of settlement not accepted within the applicable time period pursuant to section 672E-5, HRS, or ten days after service for any subsequent offers, is deemed withdrawn and evidence thereof shall not be admissible except to determine entitlement to recovery of costs;
(11) Inserting language clarifying that parties required to attempt to resolve a claim through mediation are not required to attempt to resolve the dispute through mediation more than once;
(12) Inserting language requiring mediation pursuant to section 672E-7, HRS, to be completed within twelve months of the filing of the notice of the claim, unless the parties agree or the court orders otherwise;
(13) Inserting language restricting the pre-filing of lawsuits under section 672E-8, HRS, to no more than six months before the end of the applicable limitation or repose period;
(14) Inserting a savings clause; and
(15) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.
As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 420, H.D. 3, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 420, H.D. 3, S.D. 2.
Respectfully submitted on behalf of the members of the Committee on Judiciary,
|
|
|
________________________________ KARL RHOADS, Chair |
|
|
|
|
STAND. COM. REP. NO. 1336
Honolulu, Hawaii
RE: H.B. No. 420
H.D. 3
S.D. 1
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Sir:
Your Committee on Commerce and Consumer Protection, to which was referred H.B. No. 420, H.D. 3, entitled:
"A BILL FOR AN ACT RELATING TO REMEDIES,"
begs leave to report as follows:
The purpose and intent of this measure is to:
(1) Clarify the applicability of the Statute of Repose for actions arising from construction defects;
(2) Repeal the two-year limitation for actions arising from construction defects;
(3) Clarify the required contents of a notice of claim of construction defect served on a contractor;
(4) Specify that claimants must comply with the Contractor Repair Act and bar persons from joining a class in a class action for failure to comply with the Contractor Repair Act;
(5) Amend the process and time frame for a claimant to accept a contractor's offer to settle or inspect;
(6) Limit the amount a claimant can recover if the claimant rejects a contractor's reasonable proposal for inspection or a reasonable offer to remedy; and
(7) Clarify the consequences of rejecting an offer of settlement.
Your Committee received testimony in support of this measure from the Hawaiʻi Association of REALTORS; Hawaii Regional Council of Carpenters; D.R. Horton Hawaii; Gentry Homes, Ltd.; Castle & Cooke Homes Hawaii; Hawaii HomeOwnership Center; NAIOP Hawaii; Associa Hawaii; Young Democrats of Hawaiʻi; Housing Hawaiʻi's Future; Mutual Housing Association of Hawaiʻi; Hawaii Laborers & Employers Cooperation and Education Trust; Austin, Tsutsumi & Associates, Inc.; Sinclair Drywall, Inc.; Hawaiiana Management Company, Ltd.; Royal Contracting Co. Ltd.; Jayar Construction Inc.; Raynor Hawaii Overhead Doors and Gates Inc.; Z Contractors Inc.; Fred Lau Hawaiian Landscape Company Inc.; R&C Roofing Contractors; Level 5 Drywall; Hawaii Fence Builders; TNH Plumbing, Inc.; Inspired Closets Hawaii; A-Plus Seamless Raingutters, Inc.; KY International, Inc.; Tru-Door Hawaii, Inc.; Gray-Hong-Nojima & Associates; Vinyl Tech & Masonry, Inc.; Commercial Sheetmetal Co., Inc.; Alliant Insurance Services, Inc.; International Union of Operating Engineers Local 3; Building Industry Association of Hawaii; Hawaii Credit Union League; Pacific Resource Partnership; Newport Pacific Cabinets, Inc.; Subcontractors Association of Hawaii; Chamber of Commerce Hawaii; Case Lombardi A Law Corporation; Holomua Collaborative; Hawaiʻi YIMBY; Land Use Research Foundation of Hawaii; and numerous individuals.
Your Committee received testimony in opposition to this measure from the Hawaii Insurers Council; LippSmith LLP; Bergeman Group; Kasdan Turner Thomson Booth, LLLC; Free Access Coalition; Kahiwelo HOA; and numerous individuals.
Your Committee received comments on this measure from AARP Hawaiʻi and one individual.
Your Committee finds that the Contractor Repair Act was enacted with the intent to encourage a cooperative, good-faith process between builders and homeowners to resolve legitimate claims of construction defects. The existing legal framework, however, has had a chilling effect on the construction industry due to excessive legal claims against new developments, resulting in increased construction costs, higher insurance premiums, and restrictive lending conditions, further exacerbating the State's current housing shortage.
Your Committee further finds that the public welfare of the State depends on a healthy and thriving construction industry, but when legal threats curtail development, making it riskier and more expensive, fewer job opportunities are available and create economic uncertainty for local carpenters and tradespeople. This measure seeks to ensure that legitimate construction defects are addressed efficiently, promoting fairness and stability in the construction industry. Accordingly, your Committee believes that the intent of this measure provides a fair and equitable dispute resolution process for resolving construction defect claims.
Your Committee notes, however, the many issues raised in the testimony on this measure, and the approaches of other measures introduced during the 2025 Regular Session that also address the underlying intent to improve the Contractors Repair Act. Specifically, your Committee notes Senate Bill No. 1650, Regular Session of 2025, a substantially similar measure, and finds that its contents are preferable. Accordingly, this measure is a vehicle for further consideration and discussion as it advances through the legislative process.
Your Committee has amended this measure by deleting its contents and inserting the contents of S.B. No. 1650 (2025), a substantively similar measure that:
(1) Clarifies that the Statute of Repose applies to contract, tort, and statutory claims;
(2) Specifies the required contents in a notice of claim of construction defect served on a contractor;
(3) Requires a claimant to provide actual evidence of the nature and cause of the construction defect, the extent of necessary repairs, and the notice of the claim; and
(4) Amends the process and time frame for a claimant to accept a contractor's proposal to inspect and authorize the contractor to proceed with repairs.
As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 420, H.D. 3, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 420, H.D. 3, S.D. 1, and be referred to your Committee on Judiciary.
Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,
|
|
|
________________________________ JARRETT KEOHOKALOLE, Chair |
|
|
|
|
STAND. COM. REP. NO. 1162
Honolulu, Hawaii
, 2025
RE: H.B. No. 420
H.D. 3
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Madame:
Your Committee on Judiciary & Hawaiian Affairs, to which was referred H.B. No. 420, H.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO REMEDIES,"
begs leave to report as follows:
The purpose of this measure is to:
(1) Clarify the applicability of the statute of repose for actions arising from construction defects;
(2) Specify that a plaintiff's failure to plead with particularity the claim of fraudulent concealment, if the plaintiff raises the defense, subjects the plaintiff to liability for the costs incurred by the defendant, contents of a notice of claim of construction defect served on a contractor;
(3) Clarify the required contents of a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs;
(4) Limit the amount a claimant can recover if the claimant rejects a contractor's reasonable proposal for inspection or a reasonable offer to remedy; and
(5) Clarify the consequences of rejecting an offer of settlement.
Your Committee received testimony in support of this measure from the Gentry Homes, Ltd.; Hawaii Laborers & Employers Cooperation and Education Trust; Hawaiʻi Regional Council of Carpenters; Honolulu Fire Protection; Bruce Matson Company, Inc.; Hawaii Operating Engineers Industry Stabilization Fund Political Action Committee; Z Contractors, Inc.; Hawaiʻi Association of REALTORS; Mutual Housing Association of Hawaiʻi, Inc.; Paradigm Construction LLC; Newport Pacific Cabinets, Inc.; Tru-Door Hawaii; General Contractors Association of Hawaii; Young Democrats of Hawaiʻi; Case Lombardi A Law Corporation; Hawaiiana Management Company, Ltd.; Royal Contracting Co. Ltd.; Vinyl Tech and Masonry, Inc.; Hawaii Fence Builders; Holomua Collaborative; Island Flooring; Housing Hawaiʻi's Future; Commercial Sheetmetal Co. Inc.; Pacific Resource Partnership; D.R. Horton Hawaii; Plumbing & Mechanical Contractors Association of Hawaii; Chamber of Commerce Hawaii; Hawaiʻi Construction Alliance; Building Industry Association of Hawaii; International Union of Operating Engineers Local 3 District 17; Hawaiʻi YIMBY; Kapolei Chamber of Commerce; and numerous individuals.
Your Committee received testimony in opposition to this measure from LippSmith LLP; Kasdan Turner Thomson Booth, LLLC; Law Offices of Philip S. Nerney, LLLC; and one individual.
Your Committee finds that the original intent of the Contractor Repair Act was to create a cooperative process between builders and homeowners, allowing defects to be identified and repaired without immediately resorting to lawsuits. However, existing law has led to an increase in litigation that discourages builders from undertaking new housing projects. This measure will help protect the State's workers and jobs and protect homeowners by ensuring timely repairs.
Your Committee has amended this measure by:
(1) Deleting language establishing a two-year period of limitation for initiating actions after the cause of action has accrued for damages arising out of any deficiency or neglect in construction, while clarifying the remaining limitation is subject to the existing statute of repose provisions;
(2) Deleting the issuance of a temporary certificate of occupancy from the points in time that determines whether an improvement is substantially complete;
(3) Deleting language that awarded defendants costs incurred when a plaintiff invokes the doctrine of fraudulent concealment to toll the limitation and the plaintiff fails to plead with particularity the claim of fraudulent concealment;
(4) Clarifying the definition of "material violation" by:
(A) Including building code violations that may reasonably result in physical harm; and
(B) Deleting the proviso that specified when conduct is not a material violation;
(5) Specifying, for purposes of a notice of claim of construction defect, that the claimant describe the claim with particularity and specificity sufficient to determine the circumstances without need for describing damages;
(6) Clarifying that the claimant need only provide evidence of the defect, rather than actual evidence, and deleting expert reports from the specified evidence;
(7) Clarifying that the Contractor Repair Act applies to putative class members;
(8) Specifying that no person may join a class action under the Contractor Repair Act unless the person has complied with the Contractor Repair Act;
(9) Clarifying that a claimant shall provide access to inspect the premises within thirty days of a contractor's proposal to inspect;
(10) Repealing language that awarded costs to an offerer if a judgment or award obtained in a subsequent proceeding was not more favorable than the offer;
(11) Specifying that any additional damage caused by the alleged construction defect is not limited by an offer of settlement; and
(12) 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 Judiciary & Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 420, H.D. 2, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 420, H.D. 3.
Respectfully submitted on behalf of the members of the Committee on Judiciary & Hawaiian Affairs,
|
|
|
____________________________ DAVID A. TARNAS, Chair |
|
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|
|
STAND. COM. REP. NO. 787
Honolulu, Hawaii
, 2025
RE: H.B. No. 420
H.D. 2
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Madame:
Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 420, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO REMEDIES,"
begs leave to report as follows:
The purpose of this measure is to:
(1) Clarify the statute of repose to make it clear that it applies to contract, tort, and statutory claims, fraudulent concealment is not a defense with respect to the repose period, and require a violation of a building code to be material to be actionable;
(2) Clarify the required contents of a notice of claim of construction defect served on a contractor;
(3) Amend the process and time frame for a claimant to accept a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs;
(4) Limit the amount a claimant can recover if the claimant rejects a contractor's reasonable proposal for inspection or a reasonable offer to remedy; and
(5) Clarify the consequences of rejecting an offer of settlement.
Your Committee received testimony in support of this measure from the International Union of Operating Engineers Local 3; Hawaiʻi Regional Council of Carpenters; General Contractors Association of Hawaii; Holomua Collaborative; Hawaii Laborers & Employers Cooperation and Education Trust; Chamber of Commerce Hawaii; Mutual Housing Association of Hawaiʻi, Inc.; Malachi Cleaning, Inc.; Hawaiʻi Association of REALTORS; R. M. Towill Corporation; Paradigm Construction LLC; A-Plus Seamless Raingutters, Inc.; Z Contractors Inc.; KY International Inc.; Stanford Carr Development, LLC; Newport Pacific Cabinets, Inc.; Hawaii Operating Engineers Industry Stabilization Fund Political Action Committee; Building Industry Association of Hawaii; Hawaiʻi YIMBY; Sinclair Drywall, Inc.; Island Flooring; Castle & Cooke Homes Hawaii, Inc.; Tru-Door Hawaii; Vinyl Tech and Masonry, Inc.; Hawaii Fence Builders; Kapolei Chamber of Commerce; Gentry Homes, Ltd.; Housing Hawaiʻi's Future; D.R. Horton Hawaii; Commercial Sheetmetal Co., Inc.; Haseko Development, Inc.; Pacific Resource Partnership; and numerous individuals. Your Committee received testimony in opposition to this measure from LippSmith LLP; Palehua Townhouse Association; Kasdan Turner Thomson Booth, LLLC; AARP Hawaiʻi; and six 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. This measure will deter broad and frivolous claims by requiring evidence of the defect and limiting recovery if an offer is unreasonably rejected.
Your Committee has amended this measure by:
(1) Deleting language that barred the defense of fraudulent concealment;
(2) Specifying that, if a plaintiff invokes the doctrine of fraudulent concealment to toll the limitation and the plaintiff fails to plead with particularity the claim of fraudulent concealment, then the plaintiff is liable for the costs incurred by the defendant, including attorneys' fees and costs directly related to responding to the claim; and
(3) 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. 420, H.D. 1, as amended herein, and recommends that it be referred to your Committee on Judiciary & Hawaiian Affairs in the form attached hereto as H.B. No. 420, H.D. 2.
Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,
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____________________________ SCOT Z. MATAYOSHI, Chair |
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STAND. COM. REP. NO. 220
Honolulu, Hawaii
, 2025
RE: H.B. No. 420
H.D. 1
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Madame:
Your Committee on Housing, to which was referred H.B. No. 420 entitled:
"A BILL FOR AN ACT RELATING TO REMEDIES,"
begs leave to report as follows:
The purpose of this measure is to:
(1) Clarify the statute of repose to make it clear that it applies to contract, tort, and statutory claims, fraudulent concealment is not a defense with respect to the repose period, and require a violation of a building code to be material to be actionable;
(2) Clarify the required contents of a notice of claim of construction defect served on a contractor;
(3) Amend the process and time frame for a claimant to accept a contractor's offer to settle or inspect and authorize the contractor to proceed with repairs;
(4) Limit the amount a claimant can recover if the claimant rejects a contractor's reasonable proposal for inspection or a reasonable offer to remedy; and
(5) Clarify the consequences of rejecting an offer of settlement.
Your Committee received testimony in support of this measure from Pacific Resource Partnership; General Contractors Association of Hawaii; Aliʻi Glass & Metal, Inc.; Hawaii Laborers & Employers Cooperation and Education Trust; Hawaii Regional Council of Carpenters; Hawaiʻi Association of REALTORS; Housing Hawaiʻi's Future; R. M. Towill Corporation; Mutual Housing Association of Hawaiʻi, Inc.; Paradigm Construction LLC; Hawaiʻi YIMBY; Holomua Collaborative; Gentry Homes, Ltd.; D.R. Horton Hawaii; Kasdan Turner Thomson Booth, LLLC; Kapolei Chamber of Commerce; Operating Engineers Local 3; Raynor Hawaii Overhead Doors and Gates Inc.; Case Lombardi, A Law Corporation; KY International, Inc.; Damon Key Leong Kupchak Hastert A Law Corporation; Island Flooring; Z Contractors, Inc.; A-Plus Seamless Raingutters, Inc.; and numerous individuals. Your Committee received testimony in opposition to this measure from one individual.
Your Committee finds that the intent of the Contractor Repair Act was to foster a cooperative, good-faith process between builders and homeowners to address legitimate construction defects. However, the existing system has gone astray of that original intent. Excessive legal claims against new developments have had far-reaching consequences, including increased construction costs, higher insurance premiums, and more restrictive lending conditions. This measure intents to restore a fair dispute-resolution process for resolving construction defects, which will promote a more sustainable and affordable housing market in Hawaii.
Your Committee has amended this measure by:
(1) Changing the effective date to July 1, 3000, to encourage further discussion; and
(2) Making technical, nonsubstantive amendments for clarity, consistency, and style.
As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 420, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 420, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.
Respectfully submitted on behalf of the members of the Committee on Housing,
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____________________________ LUKE A. EVSLIN, Chair |
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Date
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Testimony PDF
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| Apr 2, 2025 | HB420_SD1_TESTIMONY_JDC_04-03-25_.PDF |
| Mar 14, 2025 | HB420_HD3_TESTIMONY_CPN_03-14-25_.PDF |
| Feb 26, 2025 | HB420_HD2_TESTIMONY_JHA_02-26-25_.PDF |
| Feb 12, 2025 | HB420_HD1_TESTIMONY_CPC_02-12-25_.PDF |
| Feb 3, 2025 | HB420_TESTIMONY_HSG_01-31-25_.PDF |
Discussed in Hearing
2MIN
Conference Committee
1MIN
House Floor
29MIN
House Standing Committee on Judiciary & Hawaiian Affairs
27MIN
House Standing Committee on Consumer Protection & Commerce
23MIN
House Standing Committee on Housing
Bill Author
