By William Garrett and David M. Van Atta © all rights reserved
Senate Bill 800, effective in 2003, added Title 7 to the Civil Code, sections 895 through 935.5. This law is sometimes referred to as "The Homebuilder Right to Repair Act" or by the reference "SB 800".
This law significantly changed the way that residential developers, home owners, homeowners associations and their attorneys are to deal with construction defects in new residential housing. When a builder or homeowner, or homeowners association, has to deal with a construction defect claim covered by SB 800, awareness of and compliance with the timelines set forth in SB 800 are very important.
Failure by the developer to meet the time lines could result in the matter being excluded from the right to repair provisions of SB 800, and the process set forth under SB 800 for implementing such rights, and the affected owners or home owners association proceeding directly to litigation of the dispute. Note that these time limits are generally very short and in most cases not realistic. A party to a construction defect case that involves SB 800 claims should attempt to negotiate a more realistic time line for dealing with the process. (See the reference to Civil Code § 930, below.)
The following is an outline of those time lines as set forth in the provisions of SB 800 and some consequences.
- Civil Code § 910 - A party, either a homeowner or the homeowners association, as the claimant makes a claim by a claims notification process as stated in Civil Code § 910.
- Civil Code § 913 - A builder or his or her representative must acknowledge notice of claim within 14 days after receipt.
- Civil Code § 915 - Failure to acknowledge receipt results in the release of claimant from pre-litigation requirements.
- Civil Code § 916 - The Builder has an election to inspect, which shall be completed within 14 days after the acknowledgment of receipt of the claim notice.
- Civil Code § 916 (c) - The Builder, within 3 days of initial inspection, can request additional inspection and specify reasons. The second inspection is to be completed within 40 days of first.
- Civil Code § 916 (d) - The failure to inspect within time limits results in a release from these provisions.
- § 916 (e) - The Builder should give notice to subcontractors, design professionals, suppliers and insurers, and provide notice of these invitees to the claimant.
- Civil Code § 917 - Within 30 days of initial or second inspection, the Builder may offer to repair or compensate per § 944.
- Civil Code § 918 - Homeowner is to authorize Builder to proceed with repair within 30 days of receipt of offer to repair. In the alternative, the homeowner may request alternative contractors (up to 3). Then, the Builder is to provide other names within 35 days of request and the Builder is entitled to further inspection within 20 days of homeowner' election. The homeowner has 20 days after presentation of alternative contractors to authorize the Builder or one of the alternative contractors to perform repair.
- Civil Code § 919 - The offer to repair is to be accompanied by offer to mediate, with mediation to take place within 15 days of request to mediate.
- Civil Code § 920 - The Builder's failure to offer repair or strictly comply with the provisions of SB 800 results in a release of the claimant from pre-litigation requirements and the claimant has a right to file a legal action.
- Civil Code § 921 - (a) If resolution is by repair, the Builder shall arrange with the claimant to make repair and compensate the homeowner for all damages resulting therefrom free of charge to claimant. Repairs are to be commenced within 14 days of acceptance, or within 14 days of homeowner's selection of alternative contractor, or within 7 days of mediation, or within 5 days of obtaining a required permit. The Builder is to act with reasonable diligence in obtaining permit.
- Civil Code § 921(b) - The Builder is to assure that the work is done with the utmost diligence and completed as soon as reasonably possible. Every effort shall be made to complete the work within 20 days.
- Civil Code § 925 - The Builder's failure to timely repair as specified in repair plan results in a release of the claimant from pre-litigation requirements and right to file action.
- Civil Code § 926 - The Builder may not obtain release or waiver for mandated repair work. At conclusion of repair, claimant may file action for violation of standard, inadequate repair, or both, including all damages under § 944.
- Civil Code § 927 - The statutes of limitation are extended to 100 days after repair is completed or 45 days after time for responding to notice of claim has expired.
- Civil Code § 929 (a) - The Builder may make only a cash offer and no repair. The homeowner is free to accept or reject such a cash offer and file action.
- Civil Code § 929 (b) - The Builder may obtain a reasonable release in exchange for cash payment.
- Civil Code § 930 - The time requirements of SB 800 may be extended by mutual agreement.