Bill Text: IA SF532 | 2019-2020 | 88th General Assembly | Enrolled

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Bill Title: A bill for an act relating to notice and opportunity to repair construction defects in new construction, and including effective date and applicability provisions. (Formerly SSB 1146.) Effective 4-15-19.

Spectrum: Committee Bill

Status: (Passed) 2019-04-15 - Signed by Governor. S.J. 949. [SF532 Detail]

Download: Iowa-2019-SF532-Enrolled.html

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Senate File 532 - Enrolled
Senate File 532
AN ACT
RELATING TO NOTICE AND OPPORTUNITY TO REPAIR CONSTRUCTION
DEFECTS IN NEW CONSTRUCTION, AND INCLUDING EFFECTIVE DATE
AND APPLICABILITY PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. NEW SECTION . 686.1 Definitions.
As used in this chapter, unless the context otherwise
requires:
1. “Action” means any civil action or arbitration proceeding
for damages or indemnity asserting a claim for injury to
property, real or personal, arising out of the unsafe or
defective condition of an improvement to real property based on
tort, breach of contract, or express or implied warranty.
2. “Association” means an entity or homeowners association
created for the purposes of managing the operations of a
community as set forth in a declaration of covenants or
declaration of submission of property to horizontal property
regime filed of record in the county that the property is
located.
3. “Claimant” means a private owner, a subsequent private
owner, or an association, who asserts a claim in a class action
for damages against a general contractor or subcontractor
concerning a construction defect. “Claimant” shall not include
a public corporation as defined in section 573.1.
4. “Construction defect” means an alleged or actual unsafe
or defective condition of an improvement to real property.

Senate File 532, p. 2
5. “General contractor” means a person who does work or
furnishes materials by contract, express or implied, with an
owner.
6. “Owner” means the legal or equitable titleholder of
record to real property or the holder of a leasehold interest.
7. “Serve” , “served” , or “service” means delivery by
certified mail with a United States postal service record
of evidence of delivery or attempted delivery to the last
known address of the addressee, by hand delivery with written
evidence of delivery, or by delivery by any courier with
written evidence of delivery.
8. “Subcontractor” means a person furnishing material
or performing labor upon any building, erection, or other
improvement to land, except those having contracts directly
with the owner.
Sec. 2. NEW SECTION . 686.2 Action —— compliance.
1. A claimant shall not file an action without first
complying with the requirements of this chapter. If a claimant
files an action alleging a construction defect without first
complying with the requirements of this chapter, on timely
motion by a party to the action, the court shall stay the
action, without prejudice, and the action shall not proceed
until the claimant has complied with the requirements.
2. An action filed prior to the expiration of the
statute of limitations set forth in section 614.1, which is
stayed pursuant to this section and for which the statute of
limitations runs during the time the claimant is complying with
this statute, shall not be deemed barred by the applicable
statute of limitation for the pending action if the claimant
complies with the requirements of this chapter and the action
is otherwise allowed to proceed.
Sec. 3. NEW SECTION . 686.3 Notice and opportunity to
repair.
1. Prior to commencing an action alleging a construction
defect, the claimant shall, at least one hundred twenty days
before filing an action, serve written notice of claim on the
general contractor and subcontractor. The notice of claim
shall refer to this chapter and must describe the claim in
reasonable detail sufficient to determine the general nature of

Senate File 532, p. 3
each alleged construction defect, a description of the damage
or loss resulting from the defect, if known, and any work or
inspections completed to determine the cause of the damage
or loss or correct the construction defect. This subsection
does not preclude a claimant from filing an action sooner than
one hundred twenty days, after service of written notice as
expressly provided in subsection 6, 7, or 8.
2. a. Within sixty days after service of the notice
of claim, the person served with the notice of claim under
subsection 1 is entitled to perform a reasonable inspection
of the property or of each unit subject to the claim to
assess each alleged construction defect. The claimant shall
provide the person served with notice under subsection 1 and
the person’s general contractors, subcontractors, or agents
reasonable access to the property during normal working hours
to inspect the property to determine the nature and cause of
each alleged construction defect and the nature and extent
of any repairs or replacements necessary to remedy each
construction defect. The person served with notice under
subsection 1 shall reasonably coordinate the timing and manner
of any and all inspections with the claimant to minimize the
number of inspections. The inspection may include reasonable
destructive testing by mutual agreement under the following
terms and conditions:
(1) If the person served with notice under subsection 1
determines that destructive testing is necessary to determine
the nature and cause of the alleged construction defects, the
person shall notify the claimant in writing.
(2) The notice shall describe the destructive testing
to be performed, the person selected to do the testing, the
estimated anticipated damage and repairs to or restoration of
the property resulting from the testing, the estimated amount
of time necessary for the testing and to complete the repairs
or restoration, and the financial responsibility offered for
covering the costs of repairs or restoration.
(3) The testing shall be done at a mutually agreeable time.
(4) The claimant or a representative of the claimant may be
present to observe the destructive testing.
b. If the claimant refuses to agree and permit reasonable

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destructive testing, the claimant shall have no claim for
damages which could have been avoided or mitigated had
destructive testing been allowed when requested and had a
feasible remedy been promptly implemented.
3. The general contractor or subcontractor may serve a
copy of the notice of claim to each subcontractor or general
contractor whom the general contractor or subcontractor
reasonably believes is responsible for a construction defect
specified in the notice of claim and shall note the specific
construction defect for which the subcontractor or general
contractor is alleged to be responsible. The notice described
in this subsection shall not be construed as an admission of
any kind. A general contractor or subcontractor may inspect
the property in the manner described in subsection 2.
4. Within thirty days after service of the notice of
claim pursuant to subsection 3, the general contractor or
subcontractor must serve a written response to the general
contractor or subcontractor who served the notice of claim.
The written response shall include a report, if any, of
the scope of any inspection of the property, the findings
and results of the inspection, a statement of whether the
subcontractor or general contractor is willing to make repairs
to the property or whether the claim is disputed, a description
of any repairs the subcontractor or general contractor is
willing to make to remedy the alleged construction defect, and
a timetable for the completion of the repairs. This response
may also be served on the initial claimant by the general
contractor or subcontractor.
5. Within seventy-five days after service of the notice of
claim, the person who was served the notice under subsection 1
shall serve a written response to the claimant. The response
shall be served to the attention of the person who signed the
notice of claim, unless otherwise designated in the notice
of claim. The written response must provide for one of the
following:
a. A written offer to remedy the alleged construction defect
at no cost to the claimant, a description of the proposed
repairs necessary to remedy the construction defect, and a
timetable for the completion of such repairs.

Senate File 532, p. 5
b. A written offer to compromise and settle the claim by
monetary payment, that will not obligate the person’s insurer,
and a timetable for making payment.
c. A written offer to compromise and settle the claim by
a combination of repairs and monetary payment that will not
obligate the person’s insurer, and which includes a detailed
description of the proposed repairs and a timetable for the
completion of such repairs and making payment.
d. A written statement that the person disputes the claim
and will not remedy the construction defect or compromise and
settle the claim.
e. A written offer of a monetary payment, including
insurance proceeds, to be determined by the person and the
person’s insurer, which the claimant may accept or reject.
6. If the person served with a notice of claim pursuant
to subsection 1 disputes the claim and will neither remedy
the construction defect nor compromise and settle the claim,
or does not respond to the claimant’s notice of claim within
the time provided in subsection 5, the claimant may, without
further notice, proceed with an action against that person for
the claim described in the notice of claim. Nothing in this
chapter shall be construed to preclude a partial settlement or
compromise of the claim as agreed to by the parties and, in
that event, the claimant may, without further notice, proceed
with an action on the unresolved portions of the claim.
7. A claimant who receives a timely settlement offer shall
accept or reject the offer by serving written notice of such
acceptance or rejection on the person making the offer within
forty-five days after receiving the settlement offer. If
a claimant initiates an action without first accepting or
rejecting the offer, the court shall stay the action upon
timely motion until the claimant complies with this subsection.
8. If the claimant timely and properly accepts the offer
to repair an alleged construction defect, the claimant shall
provide the offeror and the offeror’s agents reasonable access
to the claimant’s property during normal working hours to
perform the repair by the agreed-upon timetable as stated
in the offer. If the offeror does not make the payment or
repair the construction defect within the agreed time and in

Senate File 532, p. 6
the agreed manner, except for reasonable delays beyond the
control of the offeror, including but not limited to weather
conditions, delivery of materials, claimant’s actions, or
issuance of any required permits, the claimant may, without
further notice, proceed with an action against the offeror
based upon the claim in the notice of claim. If the offeror
makes payment or repairs to the defect within the agreed
time and in the agreed manner, the claimant is barred from
proceeding with an action for the claim described in the notice
of claim or as otherwise provided in the accepted settlement
offer.
9. This section does not prohibit or limit a claimant from
making any necessary emergency repairs to the property as are
required to protect the health, safety, and welfare of any
person.
10. Any offer or failure to offer, pursuant to subsection 5,
to remedy a construction defect or to compromise and settle the
claim by monetary payment does not constitute an admission of
liability with respect to the defect and is not admissible in
an action that is subject to this chapter.
11. This section does not relieve the person who is served
a notice of claim under subsection 1 from complying with all
contractual provisions of any liability insurance policy as
a condition precedent to coverage for any claim under this
section.
Sec. 4. NEW SECTION . 686.4 Multiple construction defects.
The procedures in this chapter apply to each construction
defect. However, a claimant may include multiple defects in
one notice of claim. A claimant may amend the initial list of
construction defects to identify additional or new construction
defects as the defects become known to the claimant. The court
shall allow the action to proceed to trial only as to alleged
construction defects that were noticed and for which the
claimant has complied with this chapter and as to construction
defects reasonably related to, or caused by, the construction
defects previously noticed. Nothing in this section shall
preclude subsequent or further actions.
Sec. 5. NEW SECTION . 686.5 Limitations of chapter.
This chapter does not do any of the following:

Senate File 532, p. 7
1. Bar or limit any rights, including the right of specific
performance to the extent such right would be available in the
absence of this chapter, any causes of action, or any theories
on which liability may be based, except as specifically
provided in this chapter.
2. Bar or limit any defense, or create any new defense,
except as specifically provided in this chapter.
3. Create any new rights, causes of action, or theories on
which liability may be based.
Sec. 6. NEW SECTION . 686.6 Effect of arbitration clauses.
To the extent that an arbitration clause in a contract for
the sale, design, or construction of real property conflicts
with this chapter, this chapter shall control.
Sec. 7. NEW SECTION . 686.7 Application.
1. This chapter applies to construction defects in new
construction. This chapter does not apply to construction
defects in renovations or remodels.
2. This chapter only applies to actions brought pursuant to
a class action.
Sec. 8. EFFECTIVE DATE. This Act, being deemed of immediate
importance, takes effect upon enactment.
Sec. 9. APPLICABILITY. This Act applies to actions for
which litigation has not commenced prior to the effective date
of this Act.
______________________________ ______________________________
CHARLES SCHNEIDER LINDA UPMEYER
President of the Senate Speaker of the House
I hereby certify that this bill originated in the Senate and
is known as Senate File 532, Eighty-eighth General Assembly.
______________________________
W. CHARLES SMITHSON
Secretary of the Senate
Approved _______________, 2019 ______________________________
KIM REYNOLDS
Governor