California Supreme Court Looks to Resolve Important Issue Regarding State’s Right to Repair Act

Must a California homeowner always provide the builder with notice of alleged defects and give the builder an opportunity to repair pursuant to the California Right to Repair Act (“RRA”) [Civil Code § 895 et seq.], prior to filing a lawsuit? For some time now, the answer has not been clear.

Inconsistent Decisions in Two Court of Appeals Districts

The confusion is due to a conflict in decisions between two districts of the state’s Court of Appeals. One decision from the 4th District [Liberty Mut. Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98], held that the notice and pre-litigation procedures in the RRA applied only where the defects had not resulted in actual property damage. Where actual damage had occurred, the 4th District’s Court said that the homeowner could file a lawsuit alleging common law causes of action without first complying with the RRA’s pre-litigation procedures.

In a later decision, McMillin Albany LLC v. Superior Court of Kern County (2015) 239 Cal. App. 4th 1132, the 5th District Court of Appeals rejected Liberty Mutual and held generally that where the homeowner filed a civil action alleging deficiencies in construction that would constitute violations of the RRA, the homeowner must comply with the Act’s pre-litigation procedures, even if the lawsuit did not allege a cause of action under the RRA. McMillin is now before the California Supreme Court, and a decision is expected later this year.

The Right to Repair Act’s Aim is to Reduce Litigation

One of the important purposes of the RRA is to reduce the amount of litigation in California’s courts. The legislature determined that, wherever possible, the builder should be allowed an opportunity to fix a defect, rather than spend what could be years in the civil court system. The RRA applies to new residential construction sold after January 1, 2003.

The general RRA pre-litigation procedure is as follows:

•  The owner provides the builder with a notice outlining, at least in general terms, the alleged defect

•  The builder has the right to perform an initial inspection of the premises within 14 days of the builder’s acknowledgement of the notice

•  Within 30 days of the initial inspection, the builder may make a written offer to repair

•  Upon receipt of the offer to repair, the homeowner has 30 days within which to authorize the builder to proceed with the repair

•  Alternatively, the homeowner may request the names of up to three alternative contractors who are independent of the homebuilder, and who regularly conduct business in the area

•  The builder has 35 days after receiving the request for additional names within which to provide the homeowner with a choice of alternative contractors

Facing Repair Demands?

Does your construction business face any outstanding repair demands? Have you received a notice under California’s Right to Repair Act? Has a homeowner filed a civil action against you or your business for alleged construction defects? Because the law is currently so unsettled, it would be prudent to retain the services of a law firm that is experienced in representing California construction companies. CKB VENNA LLP has a long history of representing clients in all types of construction disputes. Our team understands the complexity of the issues and stands ready to represent you aggressively. We have offices in Rancho Cucamonga, San Bernardino, and Los Angeles. Contact us by telephone – 909-980-1040 – or complete our online form.