Arizona Voters Reject Homeowners Bill of Rights

November 16, 2008

Arizona voters overwhelming rejected Proposition 201, dubbed the Homeowners Bill of Rights. Approximately 1.34 million people, or 77.9 percent, voted no on the measure, while 386,281 voted yes.

If it had passed, the proposition would have given “homeowners the ability to get defective homes fixed, and have their homes when built match what they were led to expect and to better understand financing and insurance schemes that are offered to them,” proposition text noted.

In particular, the proposition indicated that “if a seller presents a notice to an insurer that has issued an insurance policy to the seller that covers the seller’s liability arising out of the design, construction or sale of the property that is the subject of the notice, the insurer must treat the notice as a notice of a claim subject to the terms and conditions of the policy of insurance. An insurer is obliged to work cooperative and in good faith with the insured seller within the timeframes. … Nothing … affects the coverage under the policy of insurance or creates a cause of action against an insurer whose actions were reasonable under the circumstances, notwithstanding its inability to comply with the timeframes specified” in the proposition.

The Property Casualty Insurers Association of America, which had urged Arizona residents to vote no on the measure, said, “Proposition 201 guts the existing right to cure statute-which has helped reduce the need for litigation-and eliminates mediation or arbitration options to resolve issues. It also would prohibit defendants from recovering attorney’s fees even if the defendant wins, was wrongly name, or if the case is deemed frivolous.

Rather than protect homeowners, the initiative would have created “more frivolous lawsuits, delay homeowners from getting problems addressed and raise legal and home buying costs,” the association stated on its Web site.

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