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House codifies economic‑loss rule for construction defects, limits negligence claims
Summary
The House adopted a substitute to Senate Bill 220 codifying that contract remedies, not negligence, govern construction defects absent physical injury or intentional wrongdoing; the bill passed the House 64–9 and will go back to the Senate.
On March 3 the Utah House passed a substitute to Senate Bill 220, clarifying the causes of action available in construction-defect cases and largely preserving the economic-loss rule in state law.
Representative Urquhart (House sponsor) told the chamber the substitute clarifies that defects causing physical injury or property damage remain actionable in tort, but that construction defects themselves generally give rise to contractual remedies rather than negligence claims. He cited the state Supreme Court’s American Towers decision and said the substitute ‘‘codifies the status quo’’ so that parties pursue contractual damages for defective construction while intentional torts—such as fraud or intentional misrepresentation—remain available to plaintiffs.
Representative McKiff (Kiefer) offered Amendment No. 2 to specify that breach-of-contract claims apply whether the contract is written or oral and that express and implied warranties are included; it also clarifies assignability so subsequent owners can pursue contract remedies. Several members questioned how implied warranties and assignment operate in practice; sponsors and amendment proponents described assignment as a written transfer of rights and explained that statutes of repose and warranty periods still constrain long-run claims. Representative Urquhart cited Utah Code 78‑12‑21.53a to note a six‑year statute of ultimate repose for contractual claims, with exceptions where an express warranty establishes a different period.
Supporters argued the substitute balances the interests of homeowners and contractors by keeping consumer remedies for faulty workmanship while avoiding broad expansion of tort liability that could create indeterminate liability. Opponents raised concerns in earlier debate (reflected in floor questions) about whether homeowners or homeowners associations might lose remedy paths; sponsors and proponents said contractual remedies and assignment provisions preserve protections for subsequent owners and HOAs.
The House recorded a final vote of 64 yes and 9 no on the substitute; the bill will be referred back to the Senate for further consideration.
