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| Georgia General Assembly |
HB121.html
House Bill 121
By:
Representatives Stancil of the 16th, Scheid of the 17th
and Pinholster of the 15th
A BILL TO BE
ENTITLED
AN ACT
To amend Chapter 3 of Title 8 of the Official Code of
Georgia Annotated, relating to housing generally, so as to enact the "Georgia
Homeowner Protection Act"; to provide for a short title; to define certain
terms; to provide that the requirements of this Act shall not be applicable
within the jurisdiction of a county or municipality until adopted by the
governing authority of the county or municipality; to prohibit the sale of new
homes that are not covered by certain policies of home warranty insurance; to
require proof of home warranty insurance coverage prior to the issuance of a
building permit for a proposed new home; to provide for the contents of policies
of home warranty insurance; to provide for actions for breach of a home warranty
insurance policy, including a direct action by the owner against the provider of
the home warranty insurance policy; to provide for related matters; to provide
for an effective date; to repeal conflicting laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF
GEORGIA:
SECTION 1.
Chapter 3 of Title 8 of the Official Code of Georgia
Annotated, relating to housing generally, is amended by adding at the end
thereof a new article, to be designated as Article 7, to read as
follows:
"ARTICLE
7
8_3_340.
This article shall be
known and may be cited as the 'Georgia Homeowner Protection Act.'
8_3_341.
As used in this
article, the term:
(1) 'New home' means a
self-contained dwelling unit that is newly constructed, detached, and intended
for residential occupancy and any appurtenances thereto, including without
limitation driveways, landscaping, fences, and storage
sheds.
(2) 'Owner' means a person who purchases a new
home or contracts with a residential builder to construct a new home and
includes:
(A) A person who purchases a life interest
in a new home; and
(B) A subsequent purchaser of a new
home.
(3) 'Owner builder' means a person who builds
for personal use on self-owned property, is not engaged in the business of
building, and has not constructed a new home within the past 18
months.
(4) 'Person' means any individual, firm,
corporation, partnership, association, or other legal
entity.
(5) 'Residential builder' means a person who
engages in, arranges for, or manages all or substantially all of the
construction of a new home.
(6) 'Vendor' means a
person who sells that person´s ownership in a new home that is not used as
that person´s personal residence.
8_3_342.
The requirements
of this article shall not be applicable within the jurisdiction of a county or
municipality of this state until adopted by ordinance or resolution of the
governing authority of the county or municipality.
8_3_343.
(a) No person,
other than an owner builder, may offer for sale or sell a new home unless the
home is covered by a policy of home warranty insurance in favor of the owner
that meets the requirements of Code Section 8_3_344 and is provided by a person
who is authorized to transact insurance in this state pursuant to Chapter 3 of
Title 33.
(b) No county or municipality may issue a
building permit for a proposed new home unless the applicant provides evidence,
in a form satisfactory to the county or municipality,
that:
(1) The proposed new home will be covered by a
policy of home warranty insurance that meets the requirements of Code Section
8_3_344 and is provided by a person who is authorized to transact insurance in
this state pursuant to Chapter 3 of Title 33; or
(2)
The proposed new home is not subject to the requirements of this article.
8_3_344.
(a) Any policy
of home warranty insurance issued pursuant to this article must provide coverage
in favor of the owner for breach of the following warranties provided by a
residential builder and vendor of a new home to the owner of a new home, to the
extent of labor, materials, and design supplied, used, or arranged by the
residential builder or vendor:
(1) The new home is
reasonably fit for habitation;
(2) The new home has
been constructed from materials that are of good quality and reasonably fit for
the intended purpose;
(3) The new home has been
designed and constructed with ordinary competence, skill, and care;
and
(4) The residential builder and vendor have
disposed of all excess materials and refuse from the site of the new
home.
(b) Any policy of home warranty insurance issued
pursuant to this article must:
(1) Provide coverage
for loss in relation to materials for a period of not less than two years after
the commencement date of the policy of home warranty
insurance;
(2) Provide coverage for loss arising from
water penetration for a period of not less than five years after the
commencement date of the policy of home warranty
insurance;
(3) Provide coverage for a loss arising
from structural damage for a period of not less than ten years after the
commencement date of the policy of home warranty insurance;
and
(4) Provide that any annual deductible shall be
not more than $500.00.
The commencement date of a
policy of home warranty insurance is the date on which the new home is
substantially complete or the date on which the owner takes possession of the
new home, whichever is later.
(c)(1) A policy of home
warranty insurance issued pursuant to this article shall not contain any term
which purports to waive, exclude, limit, or qualify the terms prescribed in
subsection (a) or (b) of this Code section or any exclusions from coverage; and
any such term or exclusion shall be void and of no
effect.
(2) Despite any express term in a policy of
home warranty insurance issued pursuant to this article, the policy of home
warranty insurance shall continue to have effect after completion of the sale
and transfer of title to the first owner and any subsequent
owner.
(3) A policy of home warranty insurance is
enforceable even if there is no privity of contract between the owner and the
provider of the policy of home warranty insurance.
(d)
Nothing in this article shall be construed to affect a manufacturer´s
warranty on separately manufactured components supplied with or forming a part
of a new home, including without limitation appliances, windows, floor
coverings, and heating, ventilation, and air-conditioning equipment, or to
prevent a person from providing a policy of home warranty insurance that
includes terms that are more protective of an owner than those provided for in
this Code section.
(e) Nothing in this article shall
be construed to exclude, qualify, or limit any other term, express or implied,
or relieve any person of liability to which that person would otherwise be
subject.
8_3_345.
(a) An
action for breach of a policy of home warranty insurance issued pursuant to this
article must be commenced within six years after the breach occurs. An owner
may bring an action for breach of a policy of home warranty insurance directly
against the provider of such policy and shall recover reasonable costs and
attorneys fees if the owner is the prevailing party in such an
action.
(b)(1) The protections provided in Code
Section 8-3-344 are for the benefit of whoever may be the owner of the new home
from time to time until expiration of the period within which an action may be
brought for breach of those protections, and such owner is deemed to have given
good consideration for the benefit of those protections and to be the only
person entitled to recover damages for their
breach.
(2) Notwithstanding any provision of paragraph
(1) of this subsection to the contrary, if the ownership of the new home changes
during the course of an action for breach of any of the protections provided for
in Code Section 8_3_344, the new owner is entitled to be substituted as
plaintiff and to enforce all rights that the former owner could have
enforced."
SECTION 2.
This Act shall become effective on January 1, 2002.
SECTION 3.
All laws and parts of laws in conflict with this Act are
repealed.