Attn: Montana Builders and New Home Buyers - Are You Ready to Comply with House Bill 451 on October 1, 2009?

Attn: Montana Builders and New Home Buyers
Are You Ready to Comply with House Bill 451 on October 1, 2009?

I attended a course for Supervising Real Estate Brokers yesterday with one of the state's top real estate attorneys, Zane Sullivan. We work a lot with local builders and new home construction so I was especially interested in the information he provided on HB 451 that goes into effect on October 1, 2009.

The law was designed to require builders to provide certain disclosures on new homes, and also a written warranty.

Builders are now required to provide the following in writing:

1.) General Liability Policy: a disclosure that the general contractor has a current general liability policy;

2.) Workers Compensation: a disclosure that the general contractor has a workers' compensation policy or is an independent contractor without employees;

3.) Billing Cycle: a provision setting out the billing cycle establishing the payment schedule to be followed by the owner;

4.) Change Orders: a provision establishing procedures for handling change orders by the owner;

5.) Inspections: a statement of all inspections and tests that the general contractor will perform or have performed prior to, during, or upon completion of construction and a statement that the owner is entitled to receive the results of any tests conducted by the general contractor or conducted at the general contractor's request;

6.) Additional Inspections: a statement that the owner is entitled at the owner's expense to have any inspections and tests conducted that the owner considers necessary; and

7.) Written Warranty:a statement that the general contractor is providing an express warranty that is valid for a period of at least 1 year from completion of the construction project.

The builder's warranty must provide:

• detailed descriptions of those components that are included or excluded from the warranty,
• the length of the warranty, and
• any specialty warranty provisions or time periods relating to certain components.
• the requirements that must be adhered to by the buyer, including the time and method for reporting warranty claims, in order for the warranty provision to become applicable.

Most reputable builders already provide the information that is required in the legistlation but this will make it mandatory for all builders in the state.

HB 451 is available in full on the State's Website.