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Community & Urban Affairs Panel To Hear New Home Horror Stories On Thursday

GLASSBORO- Senator Fred H. Madden announced today that the Senate Committee on Community and Urban Affairs will hold a public meeting at Rowan University this Thursday to hear testimony on a package of bills aimed at curbing the frequency of defects occurring in newly built homes.

The committee meeting will begin at 10:00 a.m., August 10, 2006 in the Eynon Ballroom of the Rowan University Center located at 201 Mullica Hill Road in Glassboro.

“Over the last few years, there have been several cases where developers have sold new homes that were fraught with structural defects,” said Senator Madden, D-Camden and Gloucester, and a member of the Committee. “Homebuyers purchasing a brand new home should expect that home to be in pristine condition and without structural problems. We need to empower those buying newly built homes with a definite set of rights to ensure that they don’t get stuck with a ‘money pit.'”

The Committee will hear testimony from the public on a series of four bills aimed at addressing the problems that new homebuyers have faced in the past when dealing with problems in their newly built homes. The bills are based upon the recommendations presented in a 2003 report on new home construction written by the State Commission of Investigation.

Bill S-1824, would establish the “New Homebuyers’ Bill of Rights.” These rights would include: no increases in the sales price of a new home without the agreement of the homebuyer; a fair and realistic opportunity to seek mortgage financing; the ability for homebuyers to require the holding of escrows for items that are incomplete and the creation of a list of incomplete items noted at closing for which no escrow fund is held that are defects that the builder is required to correct; the requirement that deposit funds must be held in escrow; permission for buyers to cancel a contract if the new home is not delivered within 90 days of the promised delivery date, with a full refund; a specific right for new homebuyers to conduct progress inspections; and the right for homebuyers to receive, without charge, a copy of the plans and specifications for their new home and that those plans and specifications can only be changed with the consent of both the homebuyer and the builder.

“My office has received far too many calls from new homebuyers who thought that buying a brand new home would save them from the repairs and hassles that can come from buying an older home. That’s the way it should be, and this ‘Bill of Rights’ will provide new homebuyers with the basis by which to ensure their new home meets all of the specifications promised,” explained Senator Madden.

Bill S-1825 would enhance the protections afforded under current law, to purchasers of new homes by strengthening and expanding the protections provided by “The New Home Warranty and Builders’ Registration Act.” The bill would expand what defects are covered by warranties and the time that a warranty would be in effect.

Bill S-1826 would amend the “State Uniform Construction Code Act” to authorize the Department of Community Affairs to direct any local enforcing agency that is not performing necessary inspections in a timely manner to allow the owner to have inspections performed by engineers or architects paid by the owner, but independent of the owner’s supervision or control, and have the cost of such inspections charged against fees otherwise due. DCA would provide a procedure for getting inspections done properly and in a timely manner in those cases in which a local enforcing agency is unable to deal with a sudden upsurge in the volume of construction work requiring inspection because of staffing limitations.

According to Senator Madden the lag in inspection time can lead to subpar work in new homes. “We’ve had reports that developers have provided false inspection papers to prospective new home owners. This new law will hopefully make that practice less common when local inspectors are slow and let new homeowners ensure that everything in their home is up to code.”

Bills S-1824, S-1825, and S-1826 are all cosponsored by Senator Ron Rice, Chair of the Committee. The Committee will also hear testimony on S-2046, sponsored by Senator Rice, which would further enhance the protections afforded those buying newly built homes.