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H. 4336
STATUS INFORMATION
General Bill
Sponsors: Reps. Jefferson, Breeland, Harvin, Clyburn, Haskins and Hosey
Document Path: l:\council\bills\nbd\11866ac08.doc
Introduced in the House on January 8, 2008
Currently residing in the House Committee on Labor, Commerce and Industry
Summary: Home Lemon Law
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number
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12/5/2007 House Prefiled
12/5/2007 House Referred to Committee on Labor, Commerce and Industry
1/8/2008 House Introduced and read first time HJ-36
1/8/2008 House Referred to Committee on Labor, Commerce and Industry
HJ-37
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, TO ENACT THE "SOUTH CAROLINA HOME LEMON LAW" SO AS TO ADD CHAPTER 18 TO TITLE 37 TO ESTABLISH REMEDIES FOR HOME WARRANTY DEFECTS, INCLUDING REPAIR, HOME REPLACEMENT, OR REFUND OF HOME PURCHASE PRICE, TO ESTABLISH PROCEDURES FOR PURSUING SUCH REMEDIES, TO REQUIRE THE DEPARTMENT OF CONSUMER AFFAIRS TO CONDUCT CONTESTED CASE HEARINGS ON ANY DEFECT ISSUES NOT RESOLVED BY THE PARTIES, TO PROVIDE AFFIRMATIVE DEFENSES, TO REQUIRE A HOMEOWNER TO EXHAUST THESE REMEDIES BEFORE BRINGING A CIVIL ACTION, TO REQUIRE WARRANTIES AND DISCLOSURE OF REPLACEMENT OR REFUND OF THE HOME, TO REQUIRE THE DEPARTMENT TO ESTABLISH A TOLL-FREE NUMBER TO PROVIDE INFORMATION CONCERNING REMEDIES UNDER THIS CHAPTER, AND TO REQUIRE THE DEPARTMENT TO PUBLISH AN ANNUAL REPORT IDENTIFYING HOMES REQUIRED TO BE REPLACED OR REFUNDED, AND TO AUTHORIZE ADMINISTRATIVE PENALTIES FOR VIOLATIONS OF THE CHAPTER; AND TO REPEAL ARTICLE 5, CHAPTER 59, TITLE 40 RELATING TO THE SOUTH CAROLINA NOTICE AND OPPORTUNITY TO CURE CONSTRUCTION DWELLING DEFECTS ACT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 37 of the 1976 Code is amended by adding:
Section 37-18-10. This chapter may be cited as the 'South Carolina Home Lemon Law'.
Section 37-18-20. As used in this chapter:
(1) 'Department' means the Department of Consumer Affairs.
(2) 'Contractor' means a person who, for compensation, engages in the construction, remodeling, repair, modification, or improvement of a building or a portion of a building used primarily for residential purposes.
(3) 'Defect' means a condition that prevents a home from conforming to a contractor's warranty, including the implied warranty that the home will conform to each applicable building code.
(4) 'Home' means a single-family house, duplex, triplex, or quadruplex or a unit in a multiunit structure used for residential purposes that is used or intended to be used as a dwelling by one of the owners.
(5) 'Homeowner' means a person who:
(a) purchased a home from a contractor and is entitled to enforce the terms of a contractor's warranty with respect to the home;
(b) is a lessor or lessee, other than a sublessee, who purchased or leased the home from a contractor; or
(c) is a transferee or assignee of a person described by subitem (a) or (b) if the transferee or assignee is a resident of this State and entitled to enforce the terms of a contractor's warranty.
(6) 'Serious safety hazard' means a life-threatening malfunction, installation defect, or nonconformity that substantially impedes a person's ability to live in or use a home or that creates a substantial risk of fire, explosion, or exposure to a toxic substance.
(7) 'Warranty' means an express or implied warranty.
Section 37-18-30. (A) This chapter supersedes any other law or contract provision that conflicts with this chapter.
(B) Except as provided by this section, this chapter does not limit the rights or remedies otherwise available to a homeowner under any other law.
(C) A contract provision that excludes or modifies the remedies provided by this chapter is prohibited and is void and against public policy unless the exclusion or modification is included in a settlement agreement between a homeowner and a contractor.
Section 37-18-40. A homeowner may seek a remedy provided by this chapter by:
(1) providing to the contractor written notice identifying each defect in the home that is covered by the contractor's warranty; and
(2) filing a complaint with the department that includes a copy of the written notice provided under item (1) on or before the thirtieth day after the date the notice is provided to the contractor.
Section 37-18-50. (A) The department may set a hearing on any allegation in a complaint that is not privately resolved between the homeowner and the contractor.
(B) The contested case provisions of the Administrative Procedures Act apply to a hearing conducted under this chapter.
Section 37-18-60. A homeowner must file a complaint under this chapter before the earlier of:
(1) the date the express warranty period expires; or
(2) the tenth anniversary of the closing date.
Section 37-18-70. In a hearing before the department under this chapter, a contractor may assert as an affirmative defense to an allegation of a defect made in a complaint filed under this chapter that the defect is the result of abuse, neglect, or modifications or alterations of the home made by a person other than the contractor.
Section 37-18-80. (A) If a defect exists, the contractor shall make the repairs necessary to conform the home to the contractor's warranties if:
(1) the homeowner or the homeowner's designated agent reported the defect to the contractor or the contractor's agent before the expiration of the applicable time limit under Section 37-18-60; or
(2) a breach of an implied warranty on the home is established under subsection (C).
(B) The contractor must make the repairs required under subsection (A) not later than the one hundred twentieth day after the date the notice of the defect required by Section 37-18-40 is received by the department.
(C) There is a presumption that a breach of an implied warranty on a home exists if the home does not comply with:
(1) a building code applicable to the home;
(2) the latest edition, published before the construction of the home, of:
(a) the International Building Code for One- and Two-Family Dwellings;
(b) the National Electric Code; or
(c) the manufacturer's specific installation instructions for the part or component used in construction of the home; or
(3) structural engineering standards or practices intended to prevent structural damage or a decrease in the market value of the home resulting from the failure of the foundation or other load-bearing portions of the home, including standards or practices used to ensure that a foundation is structurally sufficient without artificial moisture controls or other extraordinary maintenance by the homeowner.
Section 37-18-90. (A) If the contractor is unable to cure a defect within the one hundred twenty-day period prescribed by Section 37-18-80(B) and the defect creates a serious safety hazard, substantially impairs the use of the home, or decreases the home's market value by more than five percent, the contractor shall at the homeowner's option:
(1) replace the home with a comparable home in the same neighborhood; or
(2) accept return of the home from the homeowner and refund to the homeowner the full purchase price and any closing costs and reasonable moving costs.
(B) The department may not order a remedy under this section unless the contractor has been provided at least one hundred twenty calendar days to cure the defect that is subject to the remedy provided by this section. The one hundred twenty-day period required by this subsection is extended by the amount of time during which repair services are not available to a homeowner because of a war, invasion, strike, or fire, flood, or other natural disaster.
Section 37-18-100. (A) If a contractor is ordered to replace a home or refund the purchase price pursuant to Section 37-18-90, the contractor shall reimburse the homeowner for reasonable incidental costs resulting from the loss of the use of the home because of the defect.
(B) As necessary to promote the public interest, the department by regulation:
(1) shall define the incidental costs that are eligible for reimbursement under subsection (A) and specify other requirements necessary to determine an eligible cost; and
(2) may set a maximum amount that is eligible for reimbursement, either by type of eligible cost or by a total for all costs.
(C) Refunds must be made to the homeowner and primary lienholder, as applicable.
Section 37-18-110. This chapter does not prevent a homeowner from obtaining a remedy available to the homeowner under a new home warranty that provides remedies in addition to those provided by this chapter.
Section 37-18-120. (A) Except as provided by this section, a homeowner may not seek the remedies provided by this chapter in a civil action unless the homeowner files a complaint against the contractor under this chapter and exhausts the administrative proceedings provided by this chapter. A court shall dismiss an action filed in violation of this section.
(B) If the department does not issue a final order on or before the one hundred fiftieth day after the date a complaint is filed pursuant to Section 37-18-40, the department shall provide written notice, by certified mail, to the complainant and the contractor. The notice must inform the recipient of:
(1) the date, as established by the department, that the period for issuing a final order under this chapter expires; and
(2) the complainant's right to file an action under this section.
(C) After receiving a notice of the right to file an action, a complainant may file an action against a contractor named in the complaint. The department's failure to issue a notice of the right to file an action does not affect a complainant's right to bring an action under this section after one hundred and fifty days have elapsed since the homeowner filed the complaint with the department pursuant to Section 37-18-40.
Section 37-18-130. A final order of the department issued under this chapter is subject to review by an administrative law judge as provided for in the Administrative Procedures Act.
Section 37-18-140. (A) A contractor who is ordered to refund the purchase price of or replace a home pursuant to this chapter shall provide to the first retail purchaser of the home after the home was repurchased or replaced by the contractor, a disclosure statement stating that the home was repurchased or replaced by the contractor pursuant to this chapter.
(B) The disclosure statement must include the toll-free telephone number established by the department under Section 37-18-160.
(C) Before a home repurchased or replaced pursuant to this chapter may be sold again, the deed that transfers title to the home must be marked with a clear statement that indicates that the home was repurchased or replaced pursuant to this chapter.
Section 37-18-150. A contractor who sells a home after repurchasing or replacing the home pursuant to this chapter shall:
(1) restore the home in a manner that conforms with applicable building codes; and
(2) issue an express warranty for the home.
Section 37-18-160. The department shall establish a toll-free telephone number for providing information concerning remedies available under this chapter and information about a defect that was the basis for ordering a remedy under this chapter. The department shall maintain an effective method of providing information to persons who make these requests.
Section 37-18-170. The department shall publish and make available to the public an annual report relating to homes ordered repurchased or replaced by contractors pursuant to this chapter. The report must:
(1) list the number of homes by subdivision name, if any;
(2) identify the contractor; and
(3) include a brief description of each defect that was the subject of a remedy provided by this chapter.
The department may charge a reasonable fee to recover the cost of publishing the report.
Section 37-18-180. The department may impose an administrative penalty on a person who violates this chapter, a regulation promulgated pursuant to this chapter, or an order issued pursuant to this chapter.
Section 37-18-190. The department, in consultation with the South Carolina Residential Builders Commission, shall promulgate regulations necessary for the administration and enforcement of this chapter."
SECTION 2. Article 5, Chapter 59, Title 40 of the 1976 Code is repealed.
SECTION 3. This act takes effect upon approval by the Governor.
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