‘Right to repair’ a monster of a law
One of the most important bills to become law in the last Legislature was Senate Bill 800 – the Homebuilder “Right to Repair” Act, also called the Homebuilder “Fix It” Construction Defect Dispute Resolution law, and what I call the “Lawyers Full Employment Act.”
Whatever it is called, it is indeed significant, and changes the landscape for new homes sold after Jan. 1, 2003.
In a sincere effort to minimize construction defect lawsuits and lower builders’ insurance costs, Senate President pro tem John Burton and others created a monster of a law (21-pages of fine print) for developers and builders who sell new homes, single family and attached, after the new year.
SB 800 defines the minimum that homeowners should expect of their new residences.
The law defines construction defects – with 45 separate standards under seven different categories: water intrusion, structural, soils, fire protection, plumbing and sewer, electrical and “other.”
These “functionality standards” define the tolerance levels for such things as decks and balconies, exterior siding, tile, retaining walls, electrical and mechanical systems, roofing, painting and even dryer ducts.
If a homeowner believes there is a breach of a functionality standard, i.e., a defect, he or she must notify the builder who has an obligation to respond in accordance with a very detailed timetable: initial inspection within 14 days, second inspection within 40 days, notice of repair within 30 days, homeowner response within 30 days, commencement of repair within 14 and completion of repair within 120 – and that’s deleting several requirements and timetables – in the interest of keeping readers, if any, awake and not turning this column into a book.
If the contractor performs the repairs, homeowners and associations are prevented from suing.
An extensive mediation and arbitration procedure is spelled out in this addition to the Civil Code, as are specific warranty requirements for builders, with statutes of limitations (deadlines to sue). For example, one year for manufactured products like windows and two years for landscaping systems and five years for paint and stains. “Fit and finish” items have a one-year warranty.
Before 2003, contractors provided a one-year warranty for residential construction, although the deadlines for being sued varied from three to four years to as long as 10 years from substantial completion of construction.
Builders of new, turnkey homes must revise their purchase contracts and should revise their subcontracts – to require SB 800 compliance by subs and suppliers. Buyers must be provided a copy of SB 800. The law applies to original buyers and buyers thereafter.
The new law does not apply to remodels, repairs or additions, or to custom construction contracts, where a contractor builds under contract with an owner.
SB 800 is complex and burdensome, and appears to have been intended for large subdivision developers, but there is no exemption for “spec builders” who build and sell a home or two a year.
While the new law is designed to address excessive construction litigation and prohibitive insurance costs for builders, I believe it is filled with uncertainties, and at least in the short run, will create more problems than it solves.
I hope I am wrong.
Jim Porter is an attorney with Porter-Simon, with offices in Truckee, South Lake Tahoe and Reno. He is a mediator and was the Governor’s appointee to the Bipartisan McPherson Commission and the California Fair Political Practices Commission. He may be reached at firstname.lastname@example.org or at the firm’s web site http://www.portersimon.com.
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