The information below is sourced from the Stone & Sallus LLP website.
Construction defect laws in California can be somewhat confusing, especially to homeowners new to the process. The original California New Home Warranty law that was added to the state code is there to protect homeowners.
However, another law commonly referred to as SB800 requires a specific pre-litigation process that must be followed before filing a lawsuit and limits the time to file a claim for various portions of the new home. Unscrupulous home builders and other potentially liable parties may use the confusing nature of construction defect law to their advantage. For all of these reasons it is important to have an attorney from Stone & Sallus to walk you through the pre-litigation, settlement, and litigation processes. In the meantime, here is an overview of the law and your options for resolution of construction defect claims.
4 Types of Construction Defects
There are four different types of construction defects, all of which can be the responsibility of multiple parties from architects and builders to suppliers and subcontractors. Often construction defects are the responsibility of more than one entity. The type of construction defect is important in establishing a construction defect claim.
Construction Deficiencies
Construction deficiencies happen when the structure itself does not perform as expected or the contractor failed to use appropriate workmanship when building the home. Common construction deficiencies include structural integrity, mechanical elements, plumbing and electrical systems, expansive soil, and door or window installation. Other construction deficiencies include water and toxic mold intrusion, thermal protection, and finishing.
Design Deficiencies
Design deficiencies are construction defect claims that arise from issues at the design level. Failing to design the home to code with minimum building and materials standards can lead to failing systems including roofs, doors, windows, foundations, and other structural elements. Similarly, a builder’s or subcontractor’s failure to follow the design and specifications correctly is also considered a design deficiency.
Material Deficiencies
Material deficiencies occur when materials used in construction fail or do not perform as they should. Material deficiencies could be the fault of the material manufacturer, but they could just as easily be the fault of the designer for not specifying appropriate materials or the builder for not installing them properly. Material deficiencies can include prematurely failing flashing, building paper, waterproofing membranes, insulation, drywall, windows, and door frames.
Subsurface Deficiencies
The subsurface or foundation of a building is vital to its safety and continued use over the years. Some subsurface deficiencies become apparent immediately when the rainy season arrives while others may take some time to appear. Subsurface deficiencies include improper compacting of soil or inadequate drainage leading to premature failure of foundations.
SB800: Right To Repair Act
The law known as SB800, or the Right to Repair Act, was drafted as a solution to an overburdened court system as a result of the enactment of the California New Home Construction Warranty. The purpose behind SB800 is to eliminate frivolous lawsuits for construction defects that can easily be remedied with a repair. The law lays out a pre-litigation process that must be followed before you can file a construction defect case in California.
When the Pre-litigation Process Does Not Apply
SB800 requires builders to provide the details of the California new home warranty and prelitigation procedures to the homeowner at the time of contract. If the builder fails to do this or has opted out of the process, the homeowner has no obligation to report the defects to the builder for inspection and offer to repair. If you’re unsure if SB800 applies to your construction defect case, the attorneys at Stone & Sallus are here to give you a complete consultation.
How the Pre-litigation Process Works for Construction Defect Cases
The first step in addressing a construction defect is to contact an attorney. An attorney can help you determine if you have a valid construction defect claim and ensure that your responsibilities are met and your rights are protected. The basic steps for the pre-litigation process are:
Contact the home builder and report the construction defect.
Allow the home builder to do an inspection to verify the defect and determine if a repair will adequately remedy the issue.
Allow the home builder to make an offer to repair.
Accept or deny the offer for repair.
Having an attorney to represent you in the pre-litigation process is a vital piece to what happens next. It is up to the homeowner to prove that they have met the pre-litigation procedures before filing a lawsuit.
At the same time, it is important to know your rights. This includes the right to refuse an offer to repair if it is believed that the repair is not sufficient to correct the problem. It is only necessary to follow the process so that an offer can be made.
Standards of Legal Expectations for New Construction
There are many different types of standards that are required for new construction in California. The complete standards are many and complex, covering everything from the foundation to wiring light switches. It is best to talk to an experienced construction defect attorney from Stone & Sallus if you believe that these standards have been violated. Standards of legal expectations for new construction in California include any building codes, permits, and other requirements from local governments in addition to state requirements.
Water mitigation claims are one of the more common construction defect claims. When water, moisture, or condensation enters a home it weakens its structural integrity. There are many areas within and outside the home that pose hazards for water or moisture intrusion, including the kitchen, bathroom, siding, and foundations.
Water mitigation measures should be taken in design and construction, particularly in these areas and systems:
Doors and windows
Decks, balconies, and exterior stairs
Stucco, siding, and exterior walls
Retaining walls and draining systems
Problems with the foundation of a new home in California can become very apparent very quickly due to seismic activity. The California new home warranty law provides very specific criteria for earthquake and load resistance that must be followed to the letter in design, materials, and construction. Foundations, slabs, and load bearing systems should not crack or show vertical displacement.
These are not the complete standards by far, but they are the most protected with the longest statutes of limitations for filing construction defect claims.
Types of Legal Actions in Construction Defect Cases
There are many types of legal actions that can be taken in construction defect cases. A cause of action is essentially the reason for the construction defect litigation claim. There can be more than one cause of action in a construction defect case.
Here are the most common types of construction defect cause of actions:
Breach of contract: A breach of contract is when a party fails to uphold and fulfill the terms of the construction contract. Often a subcontractor will be in breach of contract to the builder resulting in delays or additional costs in the construction of the home.
Negligence: A claim of negligence must show that the builder did not meet the professional standards or building code requirements. It is not a requirement that the negligence be intentional, although it is in most cases.
Breach of implied or express warranties: This includes breaches of the California New Home Warranty, as well as any other warranties and guarantees made by the builder. Most construction defect cases fall within this category, but not all.
Strict liability: The builder is strictly liable for any construction defects in a residential home, even if the work was performed by a subcontractor. The builder is also strictly liable for damages, costs, and fees relating to the construction defects, including property damage.
Statutory violations: Statutory violations occur when the builder fails to follow the local and state statutes regarding the construction of the new home. This cause of action applies if the builder has violated any state or local laws or failed to meet statutory building standards.
These are not all of the causes of action that can be brought in a construction defect case, but they are the most common. Often these overlap and integrate with one another. Causes of action can be filed against the homebuilder, contractors, or other entities liable for the construction defects present.
Statute of Limitations for Construction Defect Claims Under California Law
One of the most important aspects of construction defect claims is the statute of limitations on filing a claim on the California new home warranty. The statute of limitations is how long after the home was built that a construction defect claim can be made. You will not be able to file a cause of action against a home builder if you miss the window, regardless of the facts of the case.
Many homeowners believe that their entire home is under warranty for 10 years. While the primary home warranty is for 10 years, there are some construction defect claims that have a different statute of limitations.
Breach of contract claims – When there is a written contract the homeowner has 4 years from the date of the breach to file a breach of contract defect claim. This is reduced to 2 years for oral agreements.
Negligence claims – Claims of negligence for items that should have been reasonably apparent must be filed within 4 years of the completion of the home. Claims of latent negligence, or issues that cannot be seen immediately, can be filed within 10 years of home completion. All claims must be filed within 3 years of when the construction defect was discovered.
Breach of implied or express warranties – These implied and express warranties have their own statute of limitations based on systems. For example, electrical systems are only covered for four years, whereas the foundations are covered for ten years. The list of these statutes of limitations are long, and an experienced construction attorney is the best individual to determine if your construction defect claim can be filed.
Strict liability – Strict liability claims for property damage is 3 years, but liability claims for injury or death must be filed within 2 years of the incident.
Fraud, misrepresentation, or failure to disclose – Fraud occurs when the builder makes false representations or promises that it has no intention or ability to keep. Fraud is becoming more common in residential construction and real estate with more transactions being completed virtually. The statute of limitations on these construction defect cases is based on the statute of limitations for fraud found in California Code of Civil Procedure §338.
These are not the complete statutes of limitations, but the causes of action listed above are the most commonly filed construction defect cases. In addition, there are some situations in which the statute of limitations may not apply. The doctrines of equitable tolling and equitable estoppel operate independently of the civil codes that set statutes of limitations, and as such create some exceptions.
The doctrine of equitable tolling determines when the statute of limitations is considered to have commenced. The statute of limitations for more construction defect claims begins when the home is completed, but this is not always the case.
The doctrine of equitable estoppel allows for the filing of a claim outside the statute of limitations when the homeowner can show that the actions of the builder led to the delay in filing the claim. For example:
A homeowner discovers a construction defect within the period to file a claim and initiates the prelitigation procedures of SB800. The builder gives an offer to repair but does not follow through. After the appropriate amount of time has passed and the repair has not been made or successful, the statute of limitations has expired. Because the litigation could not be filed before the SB800 procedures were followed, the construction defect case can still be filed.
Remedies for California Construction Defect Claims
The remedies available for California construction defect claims vary depending on the type of cause of action and the circumstances of the case. Courts can grant remedies to the homeowner that compensate them for any losses directly or indirectly caused by the construction defect.
Here are a few common remedies granted by California courts in construction defect cases:
Cost of repairs: The home builder will likely be ordered to cover the cost of any repairs necessary whether or not they complete such repairs themselves.
Loss of market value: When a home’s value is harmed by failure to follow a design, specifications, or material standards the builder could be ordered to pay the homeowner the amount of lost market value.
Relocation expenses: A builder may be ordered to pay relocation expenses if the home’s construction is such that it cannot be reasonably repaired in a reasonable amount of time.
Storage and temporary housing: Builders may be required to cover your expenses for temporary shelter and storage if the home cannot be occupied during repairs.
Cost of paid experts: If the home builder denies a construction defect claim, it is necessary for the homeowner and their attorney to use paid experts to verify the validity of the claim. Most of the time builders will be required to cover these costs, as well as attorney fees.
Loss of income: Especially in today’s remote working environment, loss of income due to being unable to use a home as intended can result from construction defects.
In short, any costs or fees that you incur as a result of a construction defect of any type can be recuperated if the builder is found to be in violation of the California new home warranty laws.
Contact a California Construction Defect Claims Attorney
As you can see, construction defect claims are not easy to navigate. The above has been only a summary of the most basic laws and procedures for construction defect claims.
Contact your attorny of management comopany to determine if a construction defect exists and how to proceed.
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.