There is little more disheartening as to finally complete a construction project that has taken years to accomplish and to discover that there are defects in its construction or design that can make its value plummet or even endanger the people using the property.
And the trauma is equally upsetting to both the builder and the user. Construction projects, by their nature, often have setbacks, delays, and alterations in plans and specifications and, as one veteran builder once told the author, he had never seen either a battle or a construction project that went strictly according to plan. Change orders are inevitable in even the simplest project. But construction defects go beyond the issue of alterations in plans and specifications or change orders. Defects constitute errors in construction, design, or specification that must be corrected, are often hidden for years (either intentionally or not) and significantly lower the value or utility of the construction.
California, home of so much construction over the years with much of the construction in earthquake or flood zones, has myriad statutes and much case law addressing the issue of construction defect and providing remedies for owners and defenses for builders, architects, engineers and developers. This article shall outline the basic law that applies to claims for construction defects in California.
This is a constantly changing area of the law and the reader is advised to obtain up to date legal advice before taking any action.
The Basic Law: . There are numerous legal theories that arise when a party claims defect in construction, each giving rise to causes of action that may be brought singly or in combination by the injured party. Note we have articles on this site addressing each of the types of actions below. Causes of Action:. Breach of contract. Breach of implied or express warranties of suitability of construction. Strict Liability. Statutory Violations These causes of action may be applicable depending on the facts of a case. As an example, if the defect comprises some use of a prohibited construction material (hazardous paint or insulation, for example) then causes of action might include violation of civil and even criminal statutes, both State and Federal.
The facts of each case are critical to analyze closely so that all potential causes of action may be considered. Each case is unique and requires legal analysis to determine the full extent of the property owner’s rights and defenses that may be available to the builders. Breach of Contract:. Most construction contracts, including the standard AIA contracts, have extensive provisions regarding quality of construction, design, materials required, inspections required, role of the architect and engineer, etc. They often have provisions for mediation and arbitration of disputes concerning design and construction defects and often contain limits on liability and warranties.
It is vital to review those provisions closely before executing the construction contract since those provisions can limit the remedies available. It is also important to realize that California law often restricts the ability of builders and construction professionals to limit their liability in the case of breach of contract or warranties and especially in the area of construction defects.
This is even more extreme when the property subject to alleged construction defect is residential construction, as more fully discussed below.
There are also provisions that require the owner in certain types of construction to offer to allow corrective work by the builder, more fully discussed below. Negligence is the breach of a duty that results in or causes damage as more fully discussed in the Tort article on this website. In the field of construction, it is the duty of the builder and the professionals who constructed a building to exercise the “standard of care of reasonable tradesmen conducting the same type of work.” Professional malpractice can be asserted against the architect, engineer or other design professional if they were negligent in the performance of their duties.
If a breach of this standard of care occurs, resulting in a construction defect which causes damage, the property owner may file an action against the builder and/or the professionals and note that these causes of action are available to the property owner whether the property owner directly purchased the property from the builder or from a third party such as a prior owner or the developer. Breach of Express Warranty:. In construction defect claims, the breach of contract refers to the failure of the property owner to receive the benefit of a reasonably defect-free building. But a breach of express warranty requires that the property owner actually received a specific warranty from the builder or has entered into a contract with the builder that expressly warranted the condition or quality of the property.
The builder “warrants” the quality or condition of the property and construction in the same manner that any seller warrants the quality of the item sold or constructed. The warranty is usually in writing and specifies in the contract what tasks must be performed and what quality must be achieved. A warranty is, essentially, a separate contract to perform according to certain levels of quality and a failure to do so is similar to a breach of contract but is limited to the sole issue of the warranty expressly granted in the warranty commitment.
Note that the statute of limitations for breach of a written contract is four years from breach in California, but that period may be extended if the injured party did not know of the breach and could not be reasonably expected to know of the breach. The same applies to warranty which often have specific periods that the warranty extends…which may be ignored in some circumstances if the defect was hidden. Breach of Implied Warranty:. In addition to the possible breach of an express warranty, California imposes an implied warranty that work performed on new construction is performed in a “reasonable workmanlike manner” according to current construction practices and the regulations put forth by governmental statutes. And note that proof of a defect due to improper construction, design, or preparation is sufficient to establish liability of the builder or developer and breach of this implied warranty. Strict Liability (Residential Property). Strict liability is a legal doctrine that imposes liability whether or not the defendant was negligent or breached an agreement, indeed, often without the defendant even knowing a defect or error exists.
It normally only applies under statute or in remarkable situations. And it does exist in California for one type of construction defect: defects in residential property. The builder is strictly liable for the construction defects existing in a residential property only. There is a requirement that there be resultant damage as a result of the construction defect for strict liability claims. If a defect exists that is irrelevant to the rest of the structure, strict liability will not apply. Resultant damage must exist. Resultant damage is defined as one building component causes damage to another part of the building.
For example, if a roof leaks when it rains, then recovery against the builder under strict liability requires that the leaking water causes additional damage, such as the floor or subfloor of the residence damaged due to the water. The recovery sought is the repair of the construction defect and the repair of the additional damage caused by the construction defect. See our discussion of SB 800 as to construction defect in residential construction. Statute of Limitations:. A statute of limitations is the time during which a suit may be brought.
Even if the builder supplied a warranty for one or two years, it will likely not affect the rights to a remedy for construction defects since California law determines the length of time a lawsuit may be filed. The time period to bring a construction defect action against the builder is based on (1) the time period after the substantial completion of the property, (2) the nature of the defect, and (3) when the defect was discovered by the property owner. Hidden defects that can not be reasonably expected to be discovered by the owner have quite long statute of limitations, often exceeding ten years under particular circumstances. These statute of limitations laws can be very difficult to understand and interpret, and such concepts as concealed defects can create longer statute of limitations which, however, are still normally limited to ten years in most cases even if not discovered until later.
Prompt discussion with an expert in the field is suggested. Senate Bill 800 (SB 800). A more recent addition in construction defect law for residential property owners is the passage of Senate Bill 800, which establishes building standards that, if violated, may allow a homeowner to file a claim against the builder.