Right to Repair Act: Not an Automatic Right

It is a commonly held misconception that Builders have an automatic “right to repair” defects in all sales of new residential construction in California and before any Homeowner may file a lawsuit for construction defects can be pursued, the Builder has a “right” under the Right to Repair Act to a notice of the defects and has an automatic statutory right to perform pre-litigation repairs. This is not the case and is not how the statute is written. The right to repair is not automatic.

Under the Right to Repair Act, the Builder’s right to repair applies only when the Builder complies with certain specific document disclosure requirements in the sale transaction, that are clearly stated in the Right to Repair Act at Civil Code § 912, which the Builder must meet and convey to the to the Buyer at the time of sale and in the sale transaction, otherwise the Builder is not entitled to any right to repair, and the Homeowner is released from the pre-litigation chapter entirely and is free to file a lawsuit. Civil Code § 912(i).

As specifically stated in the Right to Repair Act, Civil Code § 912, entitled “Document Disclosure By Builder”, before a Builder has any right to pre-litigation repairs, at the time of the sale and in the original sales documentation, the Builder must provide notice of the Builder’s election of those rights and notify the Buyer and comply strictly with the notice requirements of Civil Code § 912.

In other words, the right to repair is an “election” that the Builder may exercise only with proper disclosure to the Buyer-Homeowner.

Among those requirements are:  

Civil Code §912 (e), Provide the name of the registered agent maintained with the Secretary of State for notice or the name of 3^rd party builder’s agent.

Civil Code § 912(f), Record on title a notice of the existence of these procedures, i.e. Recorded in the Grant Deed conveying title.

And, per Civil Code §912(g), Provide, with the original sales documentation, a written copy of this title (The complete Right to Repair Act statute) initialed and acknowledge by the Purchaser and the Builder’s sales representative.

Under Civil Code § 912(i), Any Builder who fails to comply with any of these requirements [912(a-h)] within the time specified is not entitled to the protections of this chapter [Chapter 4 The Pre-Litigation Procedures] and the Homeowner is released from the requirements of this chapter and may proceed with filing of an action, in which case the remaining chapters of this part shall continue to apply to the action.

If the Builder fails to comply with the document disclosure requirements of Civil Code § 912, there is no right to repair, the Homeowner is free to file a lawsuit against the Builder and any Seller, Developer or Subcontractor, with no prior notice requirement, and the remainder of the law applies, that is the building standards, methods of proof, damages and defenses.

If a Homeowner has any question about whether the Builder has complied and has properly elected the right to repair re-litigation procedures in a new home sale, the Homeowner should look first at the Recorded Grant Deed conveying title to the property. If there is no notice of the pre-litigation procedures of the Right to Repair Act in the Recorded Grant Deed, then the Builder has failed to elect that right, and there is no right to repair, period. And, the Homeowner is released from the Chapter and any notice requirements, and is free to file an action.

If the Grant Deed contains a notice of the provisions of the Right to Repair Act, a close examination of the exact wording and the other escrow documents is required, including any CAR forms, to determine whether all of the requirements of Civil Code § 912 have been met.

Some Brokers and Sellers rely on the CAR New Construction Addendum form to comply with the Builder disclosure requirements of the Right to Repair Act. However, some of the CAR New Construction Addendum forms currently in use fail to comply with the statutory Builder disclosure requirements. Strict compliance is required in both Civil Code § 912(i) and § 930(a). So, beware of the CAR forms.