“In Aas v. Superior Court, 24 Cal. 4th 627, 647, 652–653, 101 Cal. Rptr. 2d 718, 12 P.3d 1125 (2000), the California Supreme Court held that deficiencies in residential construction were actionable in tort only if they caused property damage or personal injury. In 2002 the Legislature enacted the Right to Repair Act (“SB 800”) to abrogate the holding in Aas by allowing the recovery of damages for specified construction defects resulting in only economic loss. (Greystone Homes, Inc. v. Midtec, Inc., 168 Cal. App. 4th 1194, 1212, 86 Cal. Rptr. 3d 196 (4th Dist. 2008)) One of the major purposes of the Act is to promote prelitigation repairs of construction defects in order to avoid the costs of litigation and the resulting increased costs of construction. (Anders v. Superior Court, 192 Cal. App. 4th 579, 590, 121 Cal. Rptr. 3d 465 (5th Dist. 2011)) The Act sets forth construction standards the violation of which constitutes a deficiency in construction for which a “builder,” as defined in the act, and to some extent a general contractor and others, can be held liable to a homeowner without the need to show property damage or other injury. (Civ C §§ 896, 897, 942) The act also prescribes a nonadversarial prelitigation procedure for the parties to follow in an attempt to resolve the dispute, litigation procedures for claims under the act, and the measure of damages. Civ C §§ 910–945.5) The Act applies to the original construction of individual homes sold after January 1, 2003. It has five chapters. Chapter 1 provides definitions. (Civ C § 895) Chapter 2 describes actionable construction defects by setting forth standards for residential construction. (Civ C §§ 896, 897) Chapter 3 requires the builder to provide an express limited warranty covering the fit and finish of specified building components, and addresses the builder’s obligations if it offers greater protection to the homeowner through an enhanced protection agreement. (Civ C §§ 900–907) Chapter 4 sets forth a prelitigation procedure designed to give a builder the opportunity, before litigation commences, to repair defects brought to its attention by a homeowner’s claim. (Civ C §§ 910–938) Chapter 5 refers to litigation matters in case the prelitigation procedure does not resolve the claim, such as the deadline for filing a lawsuit, the burden of proof, damages that may be recovered, and defenses the builder may assert. (Civ C §§ 941–945.5; and see generally Darling v. Superior Court, 211 Cal. App. 4th 69, 75, 149 Cal. Rptr. 3d 331 (1st Dist. 2012)) The prelitigation procedure in chapter 4 begins with section 910, which requires a homeowner to provide a written notice of a violation of any of the building standards listed in chapter 2. The builder must acknowledge receipt of the notice within 14 days after receiving it (Civ C § 913), must complete an initial inspection and testing within 14 days after acknowledging receipt (Civ C § 916), and may offer to repair the violation and compensate the homeowner for applicable damages within 30 days of the initial or, if necessary, a second inspection or testing (Civ C § 917). Within 30 days of receipt of the repair offer, the homeowner must either accept it or request alternative contractors (Civ C § 918), or the parties may agree to mediate (Civ C § 919). Repairs must begin within 14 days after acceptance or after selection of an alternative contractor, within seven days of the mediation, or within five days of permit issuance, and must be completed “as soon as reasonably possible,” such as within 120 days. (Civ C § 921) The builder is given the option of making an offer of cash instead of repair. (Civ C § 929) The homeowner is released from this prelitigation procedure and may file a lawsuit if the builder does not acknowledge receipt of the notice, elects not to go through the procedure, fails to request an inspection, fails to make an offer to repair, makes a cash offer that the homeowner rejects, does not complete the repair in time, or does not comply with the statutory timeframes. (Civ C §§ 915, 920, 925, 929 & 930) Likewise, a homeowner or a homeowners’ association is required to give the builder timely notice to allow the builder to inspect and to make repairs. The failure to do so can bar the entire action against the builder. (KB Home Greater Los Angeles, Inc. v. Superior Court, 223 Cal. App. 4th 1471, 1476-1479, 168 Cal. Rptr. 3d 142 (2d Dist. 2014) [notifying a builder after the problem was repaired is not sufficient]) A builder has the option of contracting for an alternative nonadversarial prelitigation procedure in lieu of the statutory procedure. (Civ C § 914) A builder who elects to use alternative prelitigation procedures in lieu of those set out in the statute has the right to attempt repairs, so long as it does so pursuant to procedures that are fair and enforceable. If, however, the builder imposes procedures that are found to be unenforceable, it forfeits its absolute right to attempt repairs. It may still offer to repair any defects, but the homeowner is not bound to accept the offer or to permit the builder to attempt the repairs prior to litigation. The builder thus has an incentive to ensure its alternative procedures are proper and enforceable, and the homeowner’s protection against unnecessary delay is preserved. (Anders v. Superior Court, 192 Cal. App. 4th 579, 591, 121 Cal. Rptr. 3d 465 (5th Dist. 2011); Baeza v. Superior Court, 201 Cal. App. 4th 1214, 1225-1226, 135 Cal. Rptr. 3d 557 (5th Dist. 2011)) If a builder opts out of the statutory procedures in favor of its own contractual procedures, the builder opts out of all of Chapter 4, including the deadlines contained therein. (The McCaffrey Group, Inc. v. Superior Court, 224 Cal. App. 4th 1330, 1346-1347, 169 Cal. Rptr. 3d 766 (5th Dist. 2014)) The Right to Repair Act’s prelitigation procedures apply regardless of how construction defect claims are pleaded (but certain claims such as those for breach of contract, fraud, or personal injury, that are expressly placed outside the reach of the Act’s exclusivity).)”
[California Civil Courtroom Handbook & Desktop Reference [certain citations omitted]]
