Overview
HB 4045 proposes to amend Arizona law related to dwelling/construction defect actions by relaxing requirements for purchasers/homeowners, such as by allowing purchasers/homeowners to reject a seller’s/developer’s offer to repair alleged defects, adding additional exemptions to the purchaser’s/homeowner’s obligation to follow the requirements of the purchaser dwelling action statutes, removing duplicate pre-litigation procedures, and limiting declarant control of condominium associations following the end of the period of declarant control, among other proposed changes.
Key Changes
- Amending A.R.S. 12-1362 to:
- Exempt alleged construction defects that a seller/developer previously refused to correct or failed to properly correct from the required steps set forth in this section that a purchaser/homeowner must take before filing a dwelling/construction defect action against a seller/developer;
- Granting sellers/developers the right to make an offer to repair instead of having the unfettered right to repair;
- Removing language that would prohibit purchasers/homeowners from filing a dwelling/construction defect action until after a seller/developer completes all intended repairs and replacements;
- Providing that the seller/developer has the burden of proof to establish which construction professional’s conduct caused, in whole or in part, the construction defect;
- Removing mandatory bifurcation of the determination of whether a construction defect exists, the amount of damages caused by the construction defect, and who may have caused, in whole or in part, the construction defect from the determination of the relative degree of fault of the seller/developer and any third-party defendant (e.g., sub-contractors);
- Amending A.R.S. 12-1363 to:
- Allow purchasers/homeowners 30 days from the date of receiving a seller’s/developer’s repair or replacement offer to either accept or reject the offer, in whole or in part;
- Removing language that if the purchaser’s/homeowner’s contract with the seller/developer includes an alternate dispute resolution provision, the purchaser/homeowner may initiate such alternate dispute resolution process after the completion of the repair or replacement period;
- Tolling the statute of repose for 30 days from the rejection of all repairs or the substantial completion of accepted repairs or replacements, whichever is longer;
- Providing that sellers/contractors may request the right to inspect alleged defects listed on a supplemental defect list as opposed to sellers/contractors automatically having this right;
- Removing the requirement that purchasers/homeowners file an affidavit with the complaint for their dwelling/construction defect action that they have read the entire complaint, agree with the allegations and facts, and are not receiving or have not been promised anything of value in return for filing the complaint;
- Removing language dismissing a dwelling/construction defect action if a purchaser/homeowner fails to comply with the requirements of this statute and instead staying the proceedings pending the purchaser’s/homeowner’s compliance;
- Allowing for purchasers/homeowners to state their list of defects in layman’s terms;
- Requiring sellers/developers, in connection with their offer to repair or replace, to include the location of each repair offered, the method of repair, and the damage that is being repaired or avoided by virtue of the repair.
- Amending A.R.S. 12-1364 to:
- Establish the public policy of the State as protecting homeowners and holding homebuilders accountable for their work;
- Awarding the successful party in a dwelling/construction defect action such party’s reasonable expert witness fees in addition to reasonable attorneys’ fees and taxable costs;
- Revising language establishing when a purchaser/homeowner is deemed the prevailing party as when the final judgment is more favorable to the purchaser/homeowner than any combination of consideration offered or provided by, or repairs or replacements offered or performed by, the seller/developer;
- Providing that the seller/developer may not be reimbursed for its costs of investigation or any repairs.
- Amending A.R.S. 12-1366 to:
- Provide that the requirements for purchaser dwelling actions set forth in Title 12, Chapter 8, Article 14 do not apply when the contract for the sale of a dwelling/home or an association’s governing documents contain commercially reasonable alternative dispute resolution procedures, or for claims that a seller/developer previously refused to repair or improperly repaired alleged defects;
- Remove the requirement that purchasers/homeowners follow, in addition to following the commercially reasonable alternative dispute resolution procedures in their sales contracts or in an association’s governing documents, the requirements for purchaser dwelling actions set forth in Title 12, Chapter 8, Article 14.
- Adding A.R.S. 32-1155.01 to:
- Require the reporting of civil judgments and arbitration awards against licensed construction professionals to Arizona’s Registrar of Contractors;
- Authorizing Arizona’s Registrar of Contractors to investigate the acts of any construction professional against whom a civil judgment or arbitration award is issued for purposes of determining whether a suspension or revocation of the construction professional’s license is warranted or the imposition of a civil penalty.
- Adding A.R.S. 33-1231 to provide, for condominium associations, that after the declarant has completed construction of the development, terminated construction activities, and terminated marketing activities for the sale, lease, or other disposition of separate interests with the development, the declarant shall not have any right to enforce, take action, modify, or restrict the governing documents.
- Amending A.R.S. 33-1251 to:
- Exempt dwelling/construction defect actions from the tolling of claims against a declarant during the period of declarant control;
- Add a severability provision, which provides that if any portion of the Condominium Act or its application is held invalid, that the invalidity does not affect other provisions of the Act.
Legislative History
- February 12, 2026 – House Second Reading
- February 11, 2026 – Introduced; House First Reading; Assigned to House Commerce and Rules Committees
Impact
Overall, HB 4045 may make it easier for purchasers/homeowners, to include condominium and planned community associations, to pursue dwelling/construction defect actions against sellers/developers.