Ariz. homebuilders defeat "homeowners rights" ballot proposition

NEW YORK Wed Nov 5, 2008 8:57pm EST

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NEW YORK Nov 5 (Reuters) - An Arizona senator lost the presidency on Nov. 4, but the southwestern state's homebuilding industry won, defeating a ballot initiative billed by supporters as a "Homeowner Bill of Rights."

By about a 4-to-1 margin, voters rejected Proposition 201, which supporters said would have given home buyers more power to force builders to fix defects and opponents claimed would have been a boon for trial lawyers and an impossible burden for builders.

"We're very pleased, we think the voters of Arizona identified Proposition 201 as bad for Arizona and consumers in Arizona and rejected it," said Spencer Kamps of the Home Builders Association of Central Arizona.

After enjoying years as a center of the housing boom, Arizona has become one of the states hardest hit by the bust. D.R. Horton Inc (DHI.N), Lennar Corp (LEN.N) and Centex Corp (CTX.N), the biggest U.S. builders, all operate there.

The proposition would have eliminated Arizona's mandatory dispute resolution period between home owners and builders, allowing owners to sue builders immediately instead, said Kamps, whose campaign against the measure emphasized its $175,000 in financial support from construction defect law firms with offices in California as well as Arizona.

But "the current system is broken," said Arizona's chapter of the AFL-CIO, the United States' largest federation of labor unions and a Proposition 201 supporter, in a statement. The union helped gather signatures to put the measure on the ballot on behalf of working families with defective homes and construction workers who felt they were forced to cut corners, spokeswoman Dana Kennedy said.

The proposition also would have added eight years to the current mandatory two-year warranty and would have given buyers 100 days to cancel a contract and still receive 95 percent of their deposit back.

"It would make deposits ridiculously high," Kamps said. "You're not going to invest in a home until you know someone is really a serious buyer."

According to the Arizona Secretary of State's office, builders including Pulte Homes (PHM.N), Standard Pacific Corp (SPF.N) and Toll Brothers Inc (TOL.N) donated money to a Proposition 201 opposition group, the Coalition for Affordable Housing.

The coalition in turn funded Kamps' $1.5 million effort against the measure, which used television and radio advertising, direct mail, yard signs and bumper stickers.

(Reporting by Helen Chernikoff)

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