Accept

We use cookies in order to save your preferences so we can provide a feature-rich, personalized website experience. We also use functionality from third-party vendors who may add additional cookies of their own (e.g. Analytics, Maps, Chat, etc). Read more about cookies in our Privacy Policy and Terms of Service. If you do not accept our use of Cookies, please do not use the website.

Header Image

SB800: New Construction Warranty & Litigation

January 07 2019
January 07 2019
By

We work with a lot of buyers and sellers of new developments/construction, and we get a lot of questions about SB 800.  Here are some essential items that you should know.

How does SB 800 affect the buyer?

In essence, the state mandates that the building come with a 10 year warranty.  The HOA will most likely sue the developer sometime around year 9 in order to get any warranty issues paid for by his insurance company.  You may have a difficult time selling the unit while litigation is pending due to buyer financing issues – it could take a year or longer to resolve. This is the way the process works in CA – it’s standard and expected, so plan accordingly.  It also may not occur at all.  But once the litigation is resolved, any issues with selling the unit become no different than before the litigation.  For more information about the process from a legal perspective, click here.

What is SB 800?  What properties does it cover?
SB 800 is a California law that addresses residential construction defect litigation on new construction and establishes warranties.  The law applies to condominium or single family residential construction that has been signed by the seller on or after January 1, 2003.  It does not, however, apply to condominium conversions.

The bill sets standards for new construction, allowing builders the right to repair defects as a means of avoiding litigation, requires buyers to follow maintenance guidelines, and provides builders with certain legal defenses. The bill also requires that the builder provide information to the purchaser along with the contract, in effect letting the buyer know whether or not the builder has adopted SB 800 provisions.  This buyer and all subsequent buyers are covered; as such, SB 800 requires that the builder instruct the original buyer to provide all subsequent buyers with the original documents provided in the original sale.  The provisions of SB 800 relating to the statue of limitations may still apply.  A builder may also provide “an enhanced protection agreement,” which might offer the same or greater protection to a homeowner.

What constitutes a “builder” under SB 800?

“Any entity or individual including, but not limited to a builder, developer, general contractor, contractor, or original seller, who at the time of sale, was also in the business of selling residential units to the public.” The law also applies to all “general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals” to the extent these parties caused a violation of the SB 800 standards as a result of a “negligent act or omission or breach of contract.”

What are some of the building standards established by SB 800?

The law defines construction defects according to standards of how a home and its components should function.  The “functionality standards” fall under seven categories

  • Water intrusion
  • Structural
  • Soils
  • Fire protection
  • Plumbing and sewer
  • Electrical

There is also an umbrella category that protects “to the extent a function or
component is not addressed by these standards, it shall be actionable if it causes damage.”

What are the statutes of limitations under the new law?

Depends on the amount of time that has passed from escrow

  • 10 years from close of escrow
    • Construction defects.
  • 5 years from close of escrow Paint and stains shall be applied in such a manner so as to not cause deterioration of the building surfaces in accordance with the time specified by the manufacturers’ representations.
  • 4 years from close of escrow
    • Plumbing and sewer systems must operate properly and not materially impair the use of the structure by their inhabitants
    • Electrical systems shall operate properly so as to not materially impair the use of the structure by its inhabitants (except unreasonable risk of fire)
    • Exterior pathways, driveways, hardscape, sidewalls, sidewalks, and patio shall not contain cracks that are excessive or that display significant vertical displacement
    • Untreated steel fences and adjacent components shall be installed in order to prevent unreasonable corrosion

The above is general consumer information of SB 800, and is not intended to be legal advice. If you have any specific questions about SB 800, or are looking for information about how it applies specifically to you, please speak with an attorney.

If you're considering buying or selling a property in litigation or considering litigation, give us a call - we've helped dozens of clients navigate this situation on both the buy and sell side. It's not impossible by any stretch, but it does require specific expertise.

Email us at Hello@LevelUpGroupSF.com or call 415.606.2625.


Comments:

Leave a Comment

Name*
Email Help Tip
Website
Comment*
Characters Remaining: 5000