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California’s SB 800: Good News & Bad News The scope of California’ SB 800 is broad, and seeks to establish specific definitions and liability standards for the first time. The bill provides for action against a builder, subcontractor, individual product manufacturer, or design professional, seeking recovery of damages arising out of, or related to deficiencies in, residential construction, design, specifications, surveying, planning, supervision, testing, or observation of construction. The Right To Repair And Be Sued Builders have the right to repair after an extensive series of notices are made and the homeowner and the homeowner’s attorney must be included in all correspondence. The bill provides a two-edged sword with this since builders can submit detailed plans for repairs, but homeowners can chose "alternative contractors" to actually do the work. Presumably, this is at the builder’s expense, who relinquishes all control of the repair if the homeowner chooses someone else. The builder isn’t allowed to obtain a release or waiver of any kind in exchange for the repair work. Worse yet, at the conclusion of the repair process, the homeowner can still sue the builder. The homeowner, in fact, does not have to prove that the repair wasn’t completed satisfactorily, but can sue under the original violation of the standard, or for a claim of inadequate repair, or both. Cash Me Out Weighing lawsuits even after making repairs, builders may take homeowners up on the "cash offer" provision that allows them to settle the dispute in cash and "obtain a reasonable release in exchange for the cash payment." The builder even gets to negotiate the terms and conditions of the release. There is some question whether or not this action can be reached prior to attorneys becoming involved. Minus attorney involvement, the settlement amounts should be a fraction of any subsequent lawsuit. Time’s Up The California statute of limitations was changed to provide for one, two, four and 10 year time periods for filing actions. The length of time depends on the system and product involved, and express warranties are mandated for certain periods of time depending on the product or system. For example, untreated wood posts are not actionable two years from close of escrow. Plumbing "systems" have a four year limitation, while major systems, such as roofing, fall into the 10 year category. The HVAC system is considered a "manufactured product," and the provision regarding that demands that the HVAC unit, "be installed so as not to interfere with the products' useful life." That throws the limitation period onto the manufacturer’s definition of "useful life," which may be longer than the 10 year maximum for non-manufactured products. Actionable Defects Defined The bill defines an "actionable defect," which is then described in broad terms. The definitions are grouped under specific headings such as roofs, heating, ventilation, air conditioning, windows, doors decks, stairs, foundations and slabs, stucco, plumbing systems, sewers, load bearing components, soils, electrical, mechanical, and landscaping. An extensive list, there are 48 such definitions of actionable defects listed. Standards Defined A "standard of performance" is then defined, using broad language stating what is expectd of the workmanship, material, component or "system." Roofs, or roofing systems, for instance, "shall not allow water to enter the structure or to pass beyond, around, or through the designed or actual moisture barriers, including, without limitation, internal barriers located within the systems themselves." An important part of SB 800 is that is throws out a California Supreme Court decision in which actionable defects first had to cause real damage. The new bill creates liability before any damage has occurred if the standard outlined in the law has not been met. |
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