In the Spotlight

BIA Hawaii's Insider Newsletter - September 2004

"Opportunity to Repair Before Being Sued -- and Call Before You Dig"
by Karin Holma, Chair Government Relations Committee

The Building Industry Association of Hawaii's (BIA) coordinated the public forum to collaborate with stake-holders to secure passage of two laws important to Hawaii's construction industry. They are the Notice & Opportunity to Repair law (Act119), and the One-call Center law (Act 141).The Notice and Opportunity to Repair (“NOR”) Law.

The intent of the Notice & Opportunity to Repair law is reflected in its name. Beginning July 1, 2004,NOR requires that Hawaii's contractors be notified of an alleged construction defect at least 90 days before clients can sue them over the defect. Contractors then have the option of repairing the defect or offering to pay money to fix the defect. They also have the option to inspect the alleged defect, after which they may repair it, offer a monetary settlement, or deny the claim.

The word “Contractor” has a much broader meaning in the law than in its industry use; it is defined as anyone who designs, manufactures, develops, constructs, or sells a dwelling, or supplies products for it. Therefore, NOR covers all construction professionals who could be responsible for an alleged defect. It also specifies a timeline and provides for a chain of notification to all relevant professionals.

NOR encourages collaboration rather than lawsuits to resolve claims. If a client and contractor are unable to resolve a claim, NOR requires that they participate in mediation – and if agreement cannot be reached then, the client is free to file a lawsuit. The law received strong support throughout the construction industry, and was amended to address the concerns of insurers, consumer lawyers, and condo/community associations.

The BIA expects NOR will cut down on litigation and therefore eliminate the cost to defend by insurers, hopefully enabling them to lower the premiums and increase the availability of general liability coverage for licensed contractors.

The 1-CC Law
BIA members worked for almost two years with public and private Hawaii's utilities and other supporters to negotiate a bill that would minimize accidental damage to underground utilities during excavation. These include electrical and telecommunication lines, as well as water, sewer and gas lines. Legislators supported the bill almost unanimously during the 2004 session, and it was signed by Governor Lingle in June. It will establish a statewide “One-call Center” under the purview of the Public Utilities Commission by January 1, 2006.

This Center will improve excavating safety by gathering utility-location information from all cooperating utilities, and coordinating communication and locating efforts between utilities and excavators. The law’s name, again, reflects its intent: excavators will be able to get the help they need by making one call to the Center.

Less utility damage will mean fewer outages and associated health and safety hazards, disruptions of commerce, and repair costs. Hawaii's is the last state in the nation to establish such a comprehensive Center, and the BIA believes it will provide an invaluable service to our utilities, the construction industry, and the general public.

For more information contact Coordinator of Government Relations, Sarah Blane at (808)847-4666 ext. 2 or E-mail government@bia-hawaii.com.

Supporters of the NOR bill gathered to witness the bill signing on June 15, 2004. Standing from left: Rep. Mindo; Rep. Luke; Mike Kido, James Campbell Estate; Rep. Ching; Senator Menor; Governor Lingle; Audrey Hidano; Hidano Construction; Rep. Magaoay; Gary Wiseman, ABC Hawaii Chapter; John Chueng, CC Engineering &Construction; Rep. Ontai. Sitting from left: Karen Nakamura, BIA-Hawaii; Karin Holma, Bays Deaver Lung Rose& Baba; Mark Recktenwald, DCCA; J.P Schmidt; Rep. Lynn Finnegan