HCS SS SCS SB 168 -- RESTRICTIVE REAL ESTATE COVENANTS AND
DEFECTIVE RESIDENTIAL CONSTRUCTION

SPONSOR:  Dolan (Pratt)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Local
Government by a vote of 15 to 1.

This substitute requires that any restrictive real estate
covenant included in an association's governing document will be
removed by the board of directors of that association.  If the
association fails to remove a restrictive covenant within 30 days
of receiving a written request to do so, injunctive relief may be
granted to any individual or organization requesting the removal.
This provision has an effective date of January 1, 2006.

The substitute also establishes a procedural prerequisite for
filing a lawsuit for defective residential construction.  In its
main provisions, the substitute:

(1)  Requires contractors to provide written notice to
homeowners, including homeowners' associations, upon entering
contracts of the right to offer to cure construction defects
before homeowners may file legal actions, and specifies the
required notice language;

(2)  Clarifies that if a homeowner countersues a contractor in a
suit originally filed by the contractor against the homeowner,
the procedural prerequisites do not apply;

(3)  Requires homeowners to provide a written notice to
contractors detailing the alleged defective construction prior to
filing a lawsuit;

(4)  Requires contractors to respond timely in writing, offering
an inspection followed by repair, monetary compensation, or
disputation of the claim; offering timely repair; offering repair
and compensation; offering monetary compensation; or disputing
the claim.  If the contractor disputes the claim or fails to
timely respond, the homeowner may file suit.  If the homeowner
rejects a contractor's offer, the homeowner must notify the
contractor, and then the homeowner can file suit.  If the
homeowner accepts a contractor's offer that includes repair, the
homeowner must provide reasonable access to the premises;

(5)  Authorizes the homeowner to take immediate action to prevent
imminent injury to persons or additional significant and material
damage to the residence without violating the procedural
prerequisites; and

(6)  Outlines the option of mediation if agreed upon by the
homeowner and contractor.

FISCAL NOTE:  No impact on state funds in FY 2006, FY 2007, and
FY 2008.

PROPONENTS:  Supporters say that the bill provides protections
for both homeowners and homebuilders, gives builders a better
method to serve their clients' needs, and provides both parties
the opportunity to avoid litigation, thereby saving money.

Testifying for the bill were Representative Pratt; and St. Louis
Homebuilders Association.

OPPONENTS:  Those who oppose the bill say that requiring
homeowners' and community association board members to notify all
homeowner/members and receive consent undermines the board
members' responsibility as elected representatives.

Testifying against the bill was Community Associations Institute.

OTHERS:  Others testifying on the bill say there are still some
changes that need to be made for consistency.

Others testifying on the bill was Board of Governors of the
Missouri Bar.

Julie Jinkens McNitt, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:21 pm