- Causes of Action
- Strict Liability (Residential Property, only)
- Breach of Express Warranty or Breach of Contract
- Breach of Implied Warranty
- Statute of Limitations
- California Construction Defect Law Summary for residential properties contracted on or after January 2003
- SB 800 Remedies
- SB 800 Standards
- SB 800 Statute of Limitations
- California Awards
Many builders include contractual pre-litigation conditions as part of their contracts as a prerequisite to the filing of a lawsuit by a property owner. These conditions may or may not be required prior to filing a claim and requires a case by case specific review of the facts by a law firm that focuses on construction defect claims. Once a lawsuit is filed, the remedies that may be available are:
- The reasonable cost of repair of the construction defect, or the reduction in the fair market value of the property (legal analysis is required to determine which remedy is available)
- The cost of repairs for any property damage as a result of the construction defect
- Relocation expenses which are required as a result of the repairs
- Storage expenses as a result of the repairs
- The cost of hiring experts to investigate the defects affecting the property
- All other costs or fees recoverable by contract or statute
The causes of action for construction defects that are most commonly available against the builder are:
- Strict Liability
- Breach of implied warranties
- Breach of express warranties
- Other causes of action may be applicable depending on the facts of a case. Each case is unique and requires legal analysis to determine the full extent of the property owner’s rights.
The builder is strictly liable for the construction defects existing at a residential property. There is a requirement that there be resultant damage as a result of the construction defect for strict liability claims.
Resultant damage is where one building component causes damage to another. For example, if a window leaks when it rains, then recovery against the builder under strict liability requires that the leaking water causes damage, such as splitting of, or bubbling at, the adjacent drywall.
The recovery sought is the repair of the construction defect and the repair of the additional damage caused by the construction defect.
In construction defect claims, the breach of contract refers to the failure of the property owner to receive the benefit of a reasonably defect-free building.
A breach of express warranty requires that the property owner actually received a warranty from the builder or has entered into a contract with the builder that expressly acknowledged the condition or quality of the property.
Even in the absence of an express warranty, the law implies a warranty that work performed on new construction is performed in a reasonable workmanlike manner according to todays construction practices and the regulations put forth by many governmental codes.
The proof of a defect due to improper construction, design, or preparation is sufficient to establish liability of the builder or developer.
Negligence is the breach of a duty that results in or causes damage. The duty of the builder and/or subcontractor who constructed a building is to exercise the standard of care of reasonable tradesmen conducting the same type of work. If a breach of this standard of care occurs, resulting in a construction defect which causes damage, the property owner may file a lawsuit against the builder and any responsible subcontractors that worked on the property during the original construction. This cause of action can be available to the property owner whether the property owner directly purchased the property from the builder or a third party.
A statute of limitations is a set amount of time (usually expressed in days or years) during which a case can be filed. Even if the builder supplied a warranty for one or two years, it will likely not affect the rights to a remedy for construction defects since California law determines the length of time a lawsuit may be filed. The time period to bring a construction defect action against the builder is based on (1) the time period after the substantial completion of the property, (2) the nature of the defect, and (3) when the defect was discovered by the property owner.
These laws can be very difficult to understand and interpret, and a law firm whose practice focuses on construction defect litigation could assist in explaining the rights of a property owner and the timing aspects of filing a lawsuit.
The most recent advance in construction defect law for residential property owners is the passage of Senate Bill 800 (SB 800), which establishes building standards that, if violated, may allow a homeowner to file a claim against the builder.
The building standards of SB 800 are applicable to new residential construction when the original purchase agreement for residential property was signed by the seller on or after January 1, 2003.
Purchase agreements may contain terms related to construction defect disputes between the buyer and the seller such as arbitration, judicial reference, and mediation. The agreement can also contain requirements for notice to be given to the builder of a home with construction defects prior to the filing of a lawsuit; give the builder an opportunity to repair defects; or myriad other provisions that attempt to alter or limit homeowner rights under California Law. Determining the merits and effect of such provisions is a task that may require legal representation to simply review and identify a homeowner’s rights.
SB 800 contains pre-litigation requirements for construction defect claims. However, builders are allowed to opt out of the SB 800 pre-litigation procedures. At the time the purchase and sale agreement is signed, the builder must choose whether to utilize the pre-litigation procedures or opt out of the pre-litigation procedures.
A review of the original purchase and sale agreement is a must when deciding what options are available to the homeowner faced with construction defects or other problems in their home.
The pre-litigation procedures of SB 800 can be technical, but here is a simplistic review.
- If the builder used the pre-litigation procedures of SB 800 (or failed to make an election to opt out) then the homeowner is required to give notice of the violation(s) of the building standards, and then the builder has the opportunity to inspect the home.
- After the time for inspection, whether such occurred or not, the builder has the option to make an offer to repair the building violations. If accepted, repairs of the home are made.
- If the builder fails to make an offer to repair, fails in the repair, or fails any of the obligations that the builder has during the SB 800 pre-litigation process, the homeowner has the right to file a lawsuit.
The remedies for violation of the building standards (construction defects) are:
- The reasonable value of repairing any violation of the building standards
- The reasonable cost of repairing any damages caused by builder repair efforts
- The reasonable cost of repairing and rectifying any damages as a result of the home not meeting the building standards
- The reasonable cost of relocation and storage expenses during repairs
- Lost income if the home was used as a principal place of business of a business licensed to be operated from the home
- The reasonable investigative costs for each established violation and
- All other costs or fees recoverable by contract or statute
The SB 800 building standards attempt to cover all the major components of residential property. Just in case the Legislature left anything out, there is a provision which provides that if a function or component of a residential structure causes damage, then the same remedies exist as for a violation of a building standard.
If violations of the building standards exist, and after any pre-litigation requirements are met or excused, a lawsuit can be filed to seek available remedies, as long as the filing of the lawsuit conforms to the time allowable by the applicable statute of limitations.
California law applicable to SB 800 provides a statute of limitations for each individual building violation addressed with time periods ranging from one year to 10 years, depending on the building component. If a construction defect or other problem is observed, the homeowner must promptly seek legal advice as to their rights under the statute of limitations.
It is important to note that the various SB 800 building standards that are affected by statutes of limitation are different from the warranty sometimes provided by the builder. The warranty typically lasts for one or two years and likely has no impact on one’s rights to a remedy pursuant to the SB 800 building standards.
In summary, the application of the building standards and the statute of limitations to actual construction defects or other problems in a home can be difficult to interpret and apply. That is why a law firm whose practice focuses on construction defect litigation could assist in determining and explaining a homeowner’s rights.