(1) The qualified insurer may require an owner or association to mitigate any damage to a unit or the common elements, including damage caused by defects or water penetration, as set out in the qualified warranty.

     (2) Subject to subsection (3) of this section, for defects covered by the qualified warranty, the duty to mitigate is met through timely notice in writing to the qualified insurer.

     (3) The owner must take all reasonable steps to restrict damage to the unit if the defect requires immediate attention.

     (4) The owner's duty to mitigate survives even if:

     (a) The unit is unoccupied;

     (b) The unit is occupied by someone other than the owner;

     (c) Water penetration does not appear to be causing damage; or

     (d) The owner advises the homeowners' association corporation about the defect.

     (5) If damage to a unit is caused or made worse by the failure of an owner to take reasonable steps to mitigate as set out in this section, the damage may, at the option of the qualified insurer, be excluded from qualified warranty coverage.

[2004 c 201 § 1201.]