Law Tackles Defects in Construction

After months of negotiations between builders, trial lawyers and legislative leaders, Gov. Gray Davis signed legislation Sept. 20 that overhauls the state’s construction defects laws.

The new law defines defects and spells out builder and homeowner obligations. It also lays out pre-litigation, inspection and right-to-repair procedures, and defines the rules of litigation.

While both sides in the construction-defect debate said they compromised heavily to get the legislation passed, they also agreed that all stand to benefit from the new law, which will go into effect Jan. 1.

Under the terms of the measure, sponsored by state Sen. John Burton (D-San Francisco) and Assemblyman Herb Wesson (D-Culver City), a builder has 14 days to acknowledge receipt of a homeowner’s complaint, and must complete repairs within 120 days of the owner’s acceptance of the builder’s offer to make the repairs.

“Builders are happy because they have an absolute right to get into the home and repair the alleged violation,” said Jeffrey Masters, an attorney at Cox, Castle & Nicholson, a firm that represents builders.

Builders have complained that often the first time they hear about a defect is when they’re slapped with a lawsuit.

Homeowners advocates are pleased that the legislation now will define much more clearly what a defect is, from water-intrusion guidelines to fire-protection and plumbing issues.

Homeowners also will still be able to sue builders if they find additional defects after a repair, said attorney Thomas E. Miller, a Newport Beach construction-defect expert. “We like that homeowners can now recover 100% of the damages from defects in their homes,” Miller said. “Now homeowners can get their home fixed, and the builder is held responsible.”

Construction defect lawsuits have proliferated in the last decade, resulting in a big drop, particularly, in construction of new multifamily units. It is hoped that the new law will reverse that trend.