Hawaii Senate hears SB 179 to reform contractor repair act amid strong support and opposition

The Senate Committee on Commerce and Consumer Protection convened on February 6, 2025, to discuss Senate Bill 179, which aims to reform the contractor repair act in Hawaii. The meeting focused on the implications of the bill for construction defect claims and the housing market.

The bill seeks to clarify the statute of repose for construction defect actions, detailing the necessary contents of a notice claim served on contractors. It proposes amendments to the process and timeframe for claimants to accept settlement offers from contractors, while also limiting the recovery amount for claimants who reject reasonable proposals. Proponents argue that these changes are essential to reduce litigation and promote housing development in Hawaii.

Supporters of SB 179 included representatives from Voya Realtors, Pacific Resource Partnership, and D.R. Horton, who emphasized the need for reforms to address the rising number of construction defect lawsuits, which have surged from six cases before 2010 to 65 in recent years. D.R. Horton’s representative, Lee Tokuhara, highlighted the detrimental impact of prolonged litigation on housing development, asserting that the bill would help balance homeowners' rights with the need for builders to operate effectively.

Conversely, several organizations, including Kazdin Turner Thompson Booth, LLC, and Lipsmith LLP, voiced strong opposition to the bill. They argued that it undermines homeowners' rights by making it more difficult to recover costs for legitimate construction defects. Critics contended that the bill favors developers and could lead to increased costs for homeowners, as it shifts the burden of repairs onto them. They also expressed concerns about the potential for extended litigation processes and the erosion of existing warranties and consumer protections.

The meeting concluded with a summary of the testimony received, noting that 105 individuals and organizations supported the measure, while four opposed it. The committee members were invited to ask questions, indicating that further discussions on the bill's implications would continue. The outcome of this meeting could significantly impact the future of housing development and consumer rights in Hawaii.