Homeowners in South Carolina would have to go through mediation
before they could sue a builder over shoddy construction under a
bill awaiting Gov. Mark Sanford's signature.
Under the law, a homeowner would have to notify the builder of
any complaints at least 90 days before filing a suit. The
subcontractor or contractor would have 30 days from receipt of the
complaint "to inspect, offer to remedy, offer to settle with the
claimant or deny the claim regarding defects."
The law is an attempt "to avoid these major lawsuits that just
hurt everybody," said Tom Maeser, president of Fortune Academy of
Real Estate. "More of the lawsuits would be settled if the two
parties would just get together."
Homeowners already have the option of filing complaints with the
S.C. Residential Building Commission, which tries to resolve
disputes short of litigation.
More than 1,100 complaints were filed during the past fiscal
year.
But the law would make mediation mandatory. Any lawsuit filed
before a homeowner tries mediation would be stayed.
Legislators, who were supported by the S.C. Association of
Realtors, said an alternative was needed to the drawn out court
cases to resolve legitimate construction disputes.
The legislation also would require more members of a homeowners
association to agree to sue before the association's board members
could pursue a lawsuit, which could protect unwilling condominium
owners, but it also could make it difficult for any association to
file suit.
Many area associations include several hundred owners, and
getting them all to agree on anything is next to impossible, said
Myrtle Beach attorney Bobby Wylie, who specializes in construction
law. A few owners always are uninterested, and a few others may want
to avoid even legitimate lawsuits because they fear it may
negatively impact their efforts to sell, he said.
"This made it virtually impossible for a homeowners association
to file a lawsuit. You can't get 300 people to agree on" anything,
Wylie said.
"I would look at it more as a protection to the consumer," Maeser
said. "The HOA isn't formed until the developer actually turns it
over, and they have certain restrictions until that
happens."