Amendment SSA1-SB448

SB448-SSA1,3,7 (b) "Contractor" means a person who enters into a written or oral contract with a consumer to construct or remodel a dwelling.

SB448-SSA1,3,12 (c) "Dwelling" means any premises or portion of a premises that is used as a home or a place of residence and that part of the lot or site on which the dwelling is situated that is devoted to residential use. "Dwelling" includes other existing structures on the immediate residential premises such as driveways, sidewalks, swimming pools, terraces, patios, fences, porches, garages, and basements.

SB448-SSA1,3,14 (d) "Remodel" means to alter or reconstruct a dwelling. "Remodel" does not include maintenance work.

SB448-SSA1,3,19 (2) Notice required at time of contracting. (a) Before entering into a written contract to construct or remodel a dwelling, or, if the parties enter into an oral contract, as soon as reasonably possible, but before commencing any work to construct or remodel a dwelling, the contractor shall give the consumer a copy of the brochure prepared under s. 895.07 (13) and a notice worded substantially as follows:

SB448-SSA1,3,21 NOTICE CONCERNING CONSTRUCTION DEFECTS

SB448-SSA1,4,7 Wisconsin law contains important requirements you must follow before you may file a lawsuit for defective construction against the contractor who constructed your dwelling or completed your remodeling project or against a window or door supplier or manufacturer. For example, section 895.07 (2) and (3) of the Wisconsin statutes requires you to deliver to the contractor a written notice of any construction conditions you allege are defective before you file your lawsuit, and you must provide your contractor or window or door supplier the opportunity to make an offer to repair or pay for the construction defects. You are not obligated to accept any offer made by the contractor or window or door supplier, but failure to accept a reasonable offer may limit your recoverable damages. All parties are bound by applicable warranty provisions.

SB448-SSA1,4,9 (b) The notice required under par. (a) shall be conspicuous and in writing and may be included within the contract between the contractor and the consumer.

SB448-SSA1, s. 2 Section 2. 895.07 of the statutes is created to read:

SB448-SSA1,4,12 895.07 Claims against contractors and suppliers. (1) Definitions. In this section:

SB448-SSA1,4,13 (a) "Action" means a civil action or an arbitration under ch. 788.

SB448-SSA1,4,15 (b) "Claim" means a request or demand to remedy a construction defect caused by a contractor or supplier related to the construction or remodeling of a dwelling.

SB448-SSA1,4,18 (c) "Claimant" means the owner, tenant, or lessee of a dwelling, or an association, such as a condominium association or homeowners association, who has standing to sue a contractor or supplier regarding a construction defect.

SB448-SSA1,4,23 (d) "Construction defect," in those cases when the contractor or supplier has provided a warranty, means the definition of "defect" in the warranty. In all other cases, "construction defect" means a deficiency in the specifications, planning, supervision, construction, or remodeling of a dwelling that results from any of the following:

SB448-SSA1,4,24 1. Defective material.

SB448-SSA1,4,25 2. Violation of applicable codes.

SB448-SSA1,5,1 3. Failure to follow accepted trade standards for workmanlike construction.

SB448-SSA1,5,3 (e) "Contractor" means a person that enters into a written or oral contract with a potential claimant to construct or remodel a dwelling.

SB448-SSA1,5,8 (f) "Dwelling" means any premises or portion of a premises that is used as a home or a place of residence and that part of the lot or site on which the dwelling is situated that is devoted to residential use. "Dwelling" includes other existing structures on the immediate residential premises such as driveways, sidewalks, swimming pools, terraces, patios, fences, porches, garages, and basements.

SB448-SSA1,5,10 (g) "Remodel" means to alter or reconstruct a dwelling. "Remodel" does not include maintenance work.

SB448-SSA1,5,12 (h) "Serve" or "service" means personal service or delivery by certified mail, return receipt requested, to the last-known address of the addressee.

SB448-SSA1,5,14 (i) "Supplier" means a person that manufactures or provides windows or doors for a dwelling.

SB448-SSA1,5,16 (j) "Working day" means any day except Saturday, Sunday, and holidays designated in s. 230.35 (4) (a).

SB448-SSA1,6,4 (2) Notice and opportunity to repair. (a) No later than 90 working days before initiating an action against a contractor or supplier, a claimant shall serve written notice of claim on the contractor. Before initiating an action against a contractor or supplier, a claimant shall provide the contractor or supplier with the opportunity to respond to the claim and repair the construction defect under this section. The notice of claim shall state that the claimant asserts a construction defect claim. The notice of claim shall describe the claim in sufficient detail to explain the nature of the alleged construction defect and the results of the construction defect and shall offer the opportunity to correct the construction defect. The claimant shall include in the notice of claim a description of the alleged construction defect and include a comprehensive description of all evidence that the claimant knows or possesses, including expert reports, that substantiates the nature and cause of the alleged construction defect.

SB448-SSA1,6,8 (b) Within 15 working days after the claimant serves notice of claim under par. (a), or within 25 working days if the contractor makes a claim for contribution from a supplier under sub. (7) (a), each contractor that has received the notice of claim shall serve on the claimant any of the following:

SB448-SSA1,6,12 1. A written offer to remedy fully or partially the construction defect at no cost to the claimant. The offer shall include a description of any additional construction necessary to remedy the construction defect and a timetable for the completion of the construction.

SB448-SSA1,6,13 2. A written offer to settle the claim by monetary payment.

SB448-SSA1,6,14 3. A written offer including a combination of repairs and monetary payment.

SB448-SSA1,6,20 4. A written statement that the contractor rejects the claim, and the contractor shall state in the written response to the claim the reason for rejecting the claim and include a comprehensive description of all evidence the contractor knows or possesses, including expert reports, that substantiates the reason for rejecting the claim. The contractor shall also include in the written response to the claim any settlement offer received from a supplier.

SB448-SSA1,6,21 5. A proposal for the inspection of the dwelling under par. (c).

SB448-SSA1,7,18 (c) If a proposal for inspection is made under par. (b), the claimant shall, within 15 working days of receiving the contractor's proposal, provide the contractor and any supplier on whom a contribution claim has been made and its agents, experts, and consultants reasonable access to the dwelling to inspect the dwelling, document any alleged construction defects, and perform any testing required to evaluate fully the nature, extent, and cause of the claimed construction defects and the nature and extent of any repairs or replacements that may be necessary to remedy them. If destructive testing is required, the contractor shall give the claimant and all persons on whom a notice of claim or contribution claim has been served advance notice of the testing at least 5 working days before commencement of the testing and shall, after completion of the testing, return the dwelling to its pre-testing condition within a reasonable time after completion of the testing, at the contractor's expense. If any inspection or testing reveals a condition that requires additional testing to allow the contractor to evaluate fully the nature, cause, and extent of the construction defect, the contractor shall provide notice to the claimant and all persons on whom a notice of claim or contribution claim has been served of the need for the additional testing and the claimant shall provide reasonable access to the dwelling. If a claim is asserted on behalf of the owners of multiple dwellings, then the contractor shall be entitled to inspect each of the dwellings. The claimant shall either provide a specific day for the inspection upon reasonable notice for an inspection or require the contractor to request in writing a date for the inspection, at least 3 working days before the inspection.

SB448-SSA1,7,21 (d) Within 10 working days following completion of the inspection and receipt of all testing results under par. (c), the contractor shall serve on the claimant a notice that includes any of the offers or statements under par. (b) 1. to 4.

SB448-SSA1,8,5 (e) If the claimant rejects a settlement offer made by the contractor, the claimant shall, within 15 working days after receiving the offer, serve written notice of that rejection to the contractor. The notice shall include the reasons for the claimant's rejection of the contractor's offer. If the claimant believes that the settlement offer omits reference to any portion of the claim, or was unreasonable, the claimant's written notice shall include those items that the claimant believes were omitted and set forth the reasons why the claimant believes the settlement offer is unreasonable. The contractor shall forward the claimant's response to a supplier upon whom a contribution claim has been made.

SB448-SSA1,8,9 (f) Upon receipt of a claimant's rejection and the reasons for the rejection, the contractor shall, within 5 working days after receiving the rejection, make a supplemental offer of repair or monetary payment to the claimant or serve on the claimant written notice that no additional offer will be made.

SB448-SSA1,8,20 (g) If the claimant rejects the supplemental offer made by the contractor under par. (f) to remedy the construction defect or to settle the claim by monetary payment or a combination of each, the claimant shall serve written notice of the claimant's rejection on the contractor within 15 working days after receipt of the supplemental offer. The notice shall include the reasons for the claimant's rejection of the contractor's supplemental settlement offer. If the claimant believes the contractor's supplemental settlement offer is unreasonable, the claimant shall set forth in detail all reasons why the claimant believes the supplemental settlement offer is unreasonable. If the contractor declines to make a supplemental offer, or if the claimant rejects the supplemental offer, the claimant may bring an action against the contractor for the claim described in the notice of claim without further notice.

SB448-SSA1,9,3 (h) If a claimant accepts any offer made under this subsection, and the contractor or supplier does not proceed to make the agreed upon monetary payment or remedy the construction defect within the agreed upon timetable, the claimant may bring an action against the contractor for the claim described in the notice of claim without further notice. The claimant may file the contractor's offer and claimant's acceptance in the circuit court action, and the offer and acceptance create a rebuttable presumption that a binding and valid settlement agreement has been created and should be enforced by the court.

SB448-SSA1,9,7 (i) If a claimant accepts a contractor's offer to repair a construction defect described in a notice of claim, the claimant shall provide the contractor and its agents, experts, and consultants reasonable access to the dwelling to perform and complete the construction by the timetable stated in the settlement offer.

SB448-SSA1,9,11 (j) If a claimant receives a written statement that the contractor rejects the claim, or if the contractor does not respond to the claimant's notice, the claimant may bring an action against the contractor for the claim described in the notice of claim without further notice.

SB448-SSA1,9,24 (k) If a claimant rejects a reasonable offer or reasonable supplemental offer or fails to comply in good faith with the requirements under this subsection, or does not permit the contractor to repair the construction defect pursuant to an accepted offer of settlement, the claimant may not recover an amount in excess of the fair market value of the cost of the repairs or the amount of a monetary offer of settlement. The trier of fact shall determine the reasonableness of an offer of settlement. If the claimant has rejected a reasonable offer or reasonable supplemental offer or fails to comply in good faith with the requirements of this subsection, and any other law allows the claimant to recover punitive damages, costs, and attorney fees, then the claimant may not recover those punitive damages, or the costs or attorney fees incurred after the date of its rejection. However, if the trier of fact determines that the contractor did not make a reasonable offer or supplemental offer or comply in good faith with the requirements of this subsection, the claimant may pursue claims under any other law that allows the claimant to recover punitive damages, costs, and attorney fees.

SB448-SSA1,10,8 (L) If the claimant has served a contractor with a notice of claim relating to a construction defect and the contractor has rejected or not responded to the claim, the claimant shall, before filing an action against the supplier for a construction defect, serve the supplier with a copy of the notice of claim and provide the supplier with the opportunity to respond to the claim and repair the construction defect in the same manner as provided a contractor under this subsection.

SB448-SSA1,10,22 (3) Action; dismissal without prejudice. If the claimant files an action but fails to comply with the requirements of sub. (2) (a) and the contractor or supplier establishes that the claimant was provided the notice and brochure under s. 101.148 (2), the circuit court shall dismiss the action without prejudice. If the claimant files an action but fails to comply with the requirements of sub. (2) (a) and the contractor or supplier cannot establish that the claimant was provided the notice and brochure under s. 101.148 (2), the circuit court shall stay the action and order the parties to comply with the requirements of sub. (2) (a) and s. 101.148 (2). Before filing an action against a supplier seeking contribution for a claim that a claimant has served on a contractor, the contractor shall serve the supplier with a notice of contribution claim under sub. (7). If the contractor files an action against a supplier but fails to serve the notice of contribution claim from the claimant, the circuit court shall stay the action until the contractor has complied with the requirements of this subsection and sub. (7).

SB448-SSA1,10,25 (4) Warranty terms. The claimant and contractor or supplier are bound by any contractor or supplier warranty terms pertaining to products or services supplied for the dwelling.

SB448-SSA1,11,9 (5) Additional construction defects and notice and opportunity to repair. A construction defect that is discovered after an initial claim or contribution claim notice has been provided may not be alleged in an action until the claimant or contractor has given the contractor or supplier that performed the original construction work or provided supplies written notice of the new claim or contribution claim regarding the alleged new construction defect based on the claimant's or contractor's most current records. The contractor or supplier shall have an opportunity to resolve the notice of the new claim or contribution claim in the manner provided in subs. (2) and (7).

SB448-SSA1,11,14 (6) Action of associations. (a) In this subsection, "association" means a homeowner's association, condominium association under s. 703.02 (1m), unit owner's association, or a nonprofit corporation created to own and operate portions of a planned community that may assess unit owners for the costs incurred in the performance of the association's obligations.

SB448-SSA1,11,19 (b) A person may not provide or offer to provide anything of value, directly or indirectly, to a property manager of an association or to a member or officer of an association to induce the property manager, member, or officer to encourage the association to file or discourage the association from filing a claim for damages arising from a construction defect.

SB448-SSA1,11,23 (c) A property manager retained by an association or a member or officer of an association may not accept anything of value, directly or indirectly, in exchange for encouraging to file or discouraging from filing a claim for damages on behalf of the association arising from a construction defect.

SB448-SSA1,11,25 (d) A person who knowingly violates par. (b) or (c) may be fined not more than $500 or imprisoned not more than 30 days, or both.

SB448-SSA1,12,4 (e) An association may bring an action against a contractor or supplier to recover damages that result from construction defects in any of the common elements or limited common elements of a condominium, as defined in s. 703.02 (2) and (10) or to the extent it has standing to sue on behalf of its members.

SB448-SSA1,12,11 (7) Contribution. (a) A contractor may not seek contribution from a supplier for a claim that a claimant makes against the contractor unless the contractor provides the supplier with a written notice of the claimant's claim and the contribution claim within 5 working days after the contractor's receipt of the claim, except that a contractor may make a contribution claim later than 5 days after the contractor's receipt of the initial claim if the contractor has not done any of the following:

SB448-SSA1,12,12 1. Taken any action to repair the defect.

SB448-SSA1,12,13 2. Performed destructive testing.

SB448-SSA1,12,14 3. Authorized the claimant to take any action to repair the defect.

SB448-SSA1,12,15 4. Interfered with or altered the property that is the subject of the claim.

SB448-SSA1,12,17 5. Taken steps that would preclude a supplier's ability to offer to remedy the defect by making repairs.

SB448-SSA1,12,21 (b) The contractor shall include in the notice of claim a description of the alleged construction defect and include a comprehensive description of all evidence that the contractor knows or possesses, including expert reports, that substantiates the nature and cause of the alleged construction defect.

SB448-SSA1,12,24 (c) Within 15 working days after a supplier has received notice that a contractor is seeking contribution under par. (a), the supplier shall serve the contractor with any of the following:

SB448-SSA1,13,4 1. A written offer to remedy fully or partially the construction defect at no cost to the claimant. The offer shall include a description of any additional construction necessary to remedy the construction defect and a timetable for the completion of the construction.

SB448-SSA1,13,5 2. A written offer to settle the claim by monetary payment.

SB448-SSA1,13,6 3. A written offer including a combination of repairs and monetary payment.

SB448-SSA1,13,10 4. A written statement that the supplier rejects the claim, and the supplier shall state in the written response to the claim the reason for rejecting the claim and include a comprehensive description of all evidence the supplier knows or possesses, including expert reports, that substantiates the reason for rejecting the claim.

SB448-SSA1,13,12 5. A proposal for the inspection of the dwelling, following the procedures under par. (e).

SB448-SSA1,13,15 (d) The contractor shall forward the supplier's response to the claimant. The supplier and contractor shall use their best efforts to coordinate their responses to claims and contribution claims.

SB448-SSA1,14,12 (e) If a supplier proposes to inspect the dwelling that is the subject of the contribution claim, the contractor and claimant shall, within 15 working days after receiving the supplier's proposal, provide the supplier and its agents, experts, and consultants reasonable access to the dwelling to inspect the dwelling, document any alleged construction defects, and perform any testing required to evaluate fully the nature, extent, and cause of the claimed construction defects and the nature and extent of any repairs or replacements that may be necessary to remedy them. If destructive testing is required, the supplier shall give the contractor and claimant and all persons on whom a notice of claim or contribution claim has been served advance notice of the testing at least 5 working days before commencement of the testing and shall, after completion of the testing, return the dwelling to its pre-testing condition within a reasonable time after completion of the testing, at the supplier's expense. If any inspection or testing reveals a condition that requires additional testing to allow the supplier to evaluate fully the nature, cause, and extent of the construction defect, the supplier shall provide notice to the contractor and claimant and all persons on whom a notice of claim or contribution claim has been served of the need for the additional testing and the contractor and claimant shall provide reasonable access to the dwelling. If a claim is asserted on behalf of the contractor of multiple dwellings, then the supplier shall be entitled to inspect each of the dwellings. The contractor and claimant shall provide a specific day for the inspection upon reasonable notice for an inspection or require the supplier to request in writing a date for the inspection, at least 3 working days before the inspection.

SB448-SSA1,14,15 (f) Within 10 working days following completion of the inspection and receipt of all testing results under par. (e), the supplier shall serve on the contractor a notice that includes any of the offers or statements under par. (c) 1. to 4.

SB448-SSA1,14,23 (g) If the contractor rejects a settlement offer made by the supplier, the contractor shall, within 15 working days after receiving the offer, send written notice of that rejection to the supplier. The notice shall include the reasons for the contractor's rejection of the supplier's offer. If the contractor believes that the settlement offer omits reference to any portion of the claim, or was unreasonable, the contractor's written notice shall include those items that the contractor believes were omitted and set forth the reasons why the contractor believes the settlement offer is unreasonable.

SB448-SSA1,15,2 (h) Upon receipt of a contractor's rejection and the reasons for the rejection, the supplier shall, within 5 working days of receiving the rejection, make a supplemental offer of repair or monetary payment to the contractor or serve on the contractor written notice that no additional offer will be made.

SB448-SSA1,15,13 (i) If the contractor rejects the supplemental offer made by the supplier to remedy the construction defect or to settle the claim by monetary payment or a combination of each, the contractor shall, within 15 working days after receiving the offer, serve written notice of the contractor's rejection on the supplier. The notice shall include the reasons for the contractor's rejection of the supplier's supplemental settlement offer. If the contractor believes the supplier's supplemental settlement offer is unreasonable, the contractor shall set forth the reasons why the contractor believes the supplemental settlement offer is unreasonable. If supplier declines to make a supplemental offer, or if the contractor rejects the supplemental offer, the contractor may bring an action against the supplier for the claim described in the notice of claim without further notice.

SB448-SSA1,15,21 (j) If a contractor accepts any offer made under this subsection, and the supplier does not proceed to make the monetary payment or remedy the construction defect within the agreed upon timetable, the contractor may bring an action against the supplier for the claim described in the notice of claim without further notice. The contractor may also file the supplier's offer and contractor's acceptance in the circuit court action, and the offer and acceptance create a rebuttable presumption that a binding and valid settlement agreement has been created and should be enforced by the court.

SB448-SSA1,16,2 (k) If a contractor accepts a supplier's offer to repair a construction defect described in a notice of claim, the contractor, when appropriate, and the claimant shall provide the supplier and its agents, experts, and consultants reasonable access to the dwelling to perform and complete the construction by the timetable stated in the settlement offer.

SB448-SSA1,16,16 (L) If a contractor rejects a reasonable offer, including any reasonable supplemental offer, made as provided under this subsection or does not permit the supplier to repair the construction defect pursuant to an accepted offer of settlement, the contractor may not recover an amount in excess of the fair market value of the cost of the repairs, or the amount of a monetary offer of settlement. The trier of fact shall determine the reasonableness of an offer of settlement. If the contractor has rejected a reasonable offer, including any reasonable supplemental offer, and any other law allows the contractor to recover punitive damages, costs, or attorney fees, then the contractor may not recover those punitive damages, or any costs or attorney fees incurred after the date of its rejection. However, if the trier of fact determines that the supplier did not make a reasonable offer or supplemental offer or comply in good faith with the requirements of this subsection, the contractor may pursue claims under any other law that allows the contractor to recover punitive damages, costs, and attorney fees.

SB448-SSA1,16,20 (m) A contractor who is seeking contribution from a supplier and who elects to inspect a dwelling under sub. (2) (b) shall serve the supplier written notice of the inspection date and dwelling address, and whether destructive testing is contemplated, at least 5 working days before the inspection.

SB448-SSA1,16,22 (8) Failure to respond to notice. If a person fails to respond to any notice served under this section, then any offer made in that notice is rejected.

SB448-SSA1,17,3 (9) Limitation period. If, during the pendency of the notice, inspection, offer, acceptance, or repair process, an applicable limitation period would otherwise expire, the limitation period is tolled pending completion of the notice of claim process described in this section. This subsection shall not be construed to revive a limitation period that has expired before the date on which a claimant's written notice of claim is served or extend any applicable statute of repose.

SB448-SSA1,17,7 (10) Alteration of procedure. After service of the initial notice of claim and initial contribution claim, a claimant, a contractor, and a supplier may, by written mutual agreement, alter the procedure for the notice of claim process described in this section.

SB448-SSA1,17,10 (11) Application to others. This section does not apply to a contractor's or supplier's right to seek contribution, indemnity, or recovery against any party other than a supplier for a claim made against a contractor or supplier.

SB448-SSA1,17,13 (12) Homeowner repairs. Without giving notice under this section, a homeowner may make immediate repairs to a dwelling to protect the health or safety of its occupants.

SB448-SSA1,17,16 (13) Brochure. The department of commerce shall prepare a brochure explaining the process under this section and shall provide that brochure to contractors.

SB448-SSA1, s. 3 Section 3. Initial applicability.

SB448-SSA1,17,19 (1) This act first applies to actions commenced on the effective date of this subsection.

SB448-SSA1, s. 4 Section 4. Effective date.

SB448-SSA1,17,22 (1) This act takes effect on the first day of the 6th month beginning after publication.

SB448-SSA1,17,23 (End)