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Arizona Homeowners Bill of Rights, Proposition 201 (2008)

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Arizona Proposition 201, known by its supporters as the Homeowners Bill of Rights, was on the November ballot in Arizona as a citizen-initiated state statute. It was defeated.

The measure, which was sponsored by the Valley Labor Union, aimed to establish a minimum 10-year warranty on new homes, mandatory disclosures of financial arrangements and pricing, and new rights on fixing home defects and returns of deposits. The initiative's supporters filed about 260,000 signatures on June 30 with the Arizona Secretary of State, versus a requirement of 153,000 signatures.[1]

Election results

Arizona Homeowners Bill of Rights
ResultVotesPercentage
Defeatedd No1,655,41078%
Yes 467,866 22%

Results according to the Arizona Secretary of State.[2]

Text of measure

Short title

The official short title for Proposition 201 was:

This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.

HOMEOWNERS' BILL OF RIGHTS. Ten-year warranty on new homes. Right to demand correction of construction defects or compensation. Homeowners participate in selecting contractors to do repair work. They can sue if no agreement with the builder. No liability for builders' attorney and expert fees but homeowner can recover these costs. Homeowners can sometimes recover compensatory and consequential damages. Disclosure of builders' relationships with financial institutions. Model homes must reflect what is actually for sale. Right to cancel within 100 days and get back most of the deposit. Prohibiting sellers' agents from participating in false mortgage applications.[3]

Full text

The full text of the legislation proposed by Proposition 201 is available here.


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This historical ballot measure article requires the text of the measure to be added to the page.

Details

Specifically, the measure called for:

  • A 10-year warranty on a new home's materials and workmanship;
  • Extending the statute of limitations for bringing a court action to 10 years from eight;
  • Giving an aggrieved homeowner the right to choose among three contractors with complaint-free records to fix any repairs that might be needed in the home;
  • Rewriting the rules on attorney fees; homeowners could sue without worry of being held responsible for builders' attorney costs.

Taxpayer's perspective from NTU

Proposition 201 was a union-backed measure to impose new requirements on home warranties, with the hope of creating more union jobs. Opponents believed the measure would open the door to costly litigation, as well as higher prices for home building and repair.

Support

The Sheet and Metal workers union sponsored the initiative.[4]

"This is an attempt to put some balance in the picture," said Richard McCracken, attorney for the measure's sponsor, the Sheet Metal Workers' International Association, Local Union 359.[5]

Supporting Arguments

Main arguments put forward in support of Proposition 201 included:

  • Prop. 201 would guarantee a 10 year warranty on new homes
  • The measure would make home builders correct construction defects or compensate the homeowner
  • Would guarantee that homeowners can participate in choosing contractors to do repair work
  • Would give buyers the right to cancel within 100 days and get back most of their deposits

Opposition

The Home Builders Association of Central Arizona formed an opposition committee, on the grounds that the proposal would lead to an unnecessary increase in litigation and that the sole purpose was to increase employment opportunities for union members.[6]

Arizonans Against Lawsuit Abuse asserted that the measure would encourage frivolous lawsuits by allowing homeowners sue without fear of having to pay a builder’s legal fees if they lose.

Opposing Arguments

Main arguments expressed against the initiative included:

  • Prop. 201 would prohibit two parties from agreeing to resolve their disputes without going to court and hiring attorneys.
  • Prop 201 would forbid the defendants from recovering any attorney's fees, even if the case was frivolous or if they win.
  • Prop. 201 would allow prospective buyers to file lawsuits. They will not even have to own the home to file a lawsuit.
  • Prop 201 assured that all disputes, either large or small, go to court, raising costs for everyone.

Path to the Ballot

See also: Laws governing the initiative process in Arizona

On August 9, the Arizona Republic reported that the initiative would be on the ballot despite not having enough signatures to automatically qualify. According to Arizona law, if estimates based on a random sampling of a petition's signatures exceed 105 percent of the number needed to qualify for the ballot, then the measure automatically qualifies. Estimates that fall between 95 and 105 percent are supposed to be validated by each county; however, several county recorders report that they would be unable to do so by the deadline. A 1983 Supreme Court decision ruled that measures which could not be validated in a timely manner must be placed on the ballot.[7]

Lawsuit

On July 23, the Homebuilders Association filed a lawsuit seeking to keep Proposition 201 off the ballot on the grounds that the ballot title for the proposition was "rife with errors and intentionally misleading."[8]

Late on August 13, Judge Sam Myers acknowledged that at least one portion of Proposition 201 was improperly drafted. And that error was repeated in the copies of the measure that were attached to the petitions circulated to get the signatures to put the measure on the November ballot.

But Myers said state law required only that initiative petitions be in "substantial compliance" with legal requirements.

Potentially more significant, Myers said that Lisa Hauser, an attorney representing the home builders, presented no evidence that any of the circulators were misled.

More Litigation

On August 12, Lisa Hauser, an attorney for home builders, told Maricopa County Superior Court Judge Sam Myers that the initiative did not comply with legal requirements. She said while some legal issues were technical, like the lack of a formal title, others were substantive.

Hauser noted in particular the new language being proposed by the Sheet Metal Workers International Association, which was financing Proposition 201, was not in capital letters. Instead, she said, it was in lowercase — a typographical technique generally reserved for parts of state law that are not proposed for change.

She also said the legally required summary prepared by backers improperly ignored the fact that one provision of the initiative could affect commercial construction.

Andrew Kahn, representing the union, conceded making a "typographical error" in the text of the initiative, which, by law, must be attached to every petition seeking to put a measure on the ballot. But he told Myers that signers were not misled.

See also

External links

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