Statutes Of Limitations On Construction Defects In California

California’s construction defect statutes of limitations refers to laws which establish specific time limits within which one must file a lawsuit in order to protect and preserve those construction defect claims. In California, there are a number of overlapping statutes of limitations that must be addressed in evaluating the deadlines for filing a lawsuit for construction defects

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SB800 also known as the Right To Repair Act

One of the principle statutes affecting construction defect claims is the so-called Right to Repair Act passed into law in California in 2002, effective January 1, 2003, and codified in the Code of Civil Procedure, Sections 895 to 945.5, often referred to as SB800 (it’s Senate Bill designation) or as the Right to Repair Act.

Before delving into the various specific time limitations set forth in the Act, it’s important to determine broadly whether the Act applies to your case, and also, whether the builder in your case has a “right to repair” under the Act at all. 

The Act applies to new residential construction, so by definition, the Act does not apply to commercial construction, condominium conversions, remodels, additions or other construction improvements that are less than a complete new home construction.

If the construction is new residential construction in California and thus falls within the Act, then there is still a question of whether the builder has properly notified the buyer/homeowner of the Right to Repair Act.

Often, it is mistakenly assumed that the law provides all builders with an automatic “Right to Repair” in all cases. However, under the Act, the builder’s so called “Right to Repair” is not automatic at all.

In order to be entitled to a right to repair under the Act, the builder must meet certain specific mandatory notice requirements as set forth in Code Of Civil Procedure Section 912 (f, g and h), which require the builder to provide notice to the buyer in the purchase agreement, attach a complete copy of the statute to the purchase documents, record notice of the right to repair in the title to the property and notify the buyer to notify subsequent purchasers of the same.

If the builder fails to meet any one of these mandatory notice requirements, under Section 912 (i), the builder is not entitled to a right to repair, the pre-litigation procedures of the Act do not apply, and significantly, the buyer/homeowner is released from any right to repair obligations under the Act and may proceed with filing a lawsuit. So, when the builder fails to provide proper notice, not only is the homeowner/buyer free to file a lawsuit, but the building standards of the Act still apply, and the homeowner/buyer is free to pursue additional claims and remedies including breach of contract and fraud.

In California, these standards include specific and detailed standards for the various components of a new home. A sampling of these standards includes an extensive series of standards related to water issues, such that doors, windows, patio and deck doors and their systems shall not allow water or excessive condensation, to pass beyond, around or through the designed or actual moisture barriers. Decks, deck systems, balconies, exterior stairs and stair systems shall not allow water to pass into the adjacent structure. Foundation systems shall not allow water or vapor to enter into the structure. Stucco, exterior siding and exterior walls shall not allow unintended water or excessive condensation, to pass into the structure. Retaining walls and site walls and their associated drainage systems shall not allow unintended moisture to pass beyond or through its designated or actual moisture barriers. Waterproofing systems behind or under ceramic tile or tile countertops shall not allow water into the interior of walls, flooring systems or other components.

With respect to structural issues: Foundations, load bearing components, and slabs, shall not contain significant cracks or vertical displacement, shall not cause the structure to be structurally unsafe and shall materially comply with the design criteria set by the applicable government building codes for chemical deterioration or corrosion resistance, and shall materially comply with the design criteria for earthquake and load resistance.

With respect to soil issues: Soils and engineered retaining walls shall not cause damage to the structure or cause the structure to be structurally unsafe, or become unusable.

The analysis then turns to the type of claim, the construction defect statutes of limitations for California and how they apply.

 

Overall Statute of Limitations on Construction Defects in California

While the Act provides an overall limitations period of 10 years, there are specific limitations for certain types of defects.

For example: 4 years from the close of escrow for plumbing and sewer systems, electrical systems and exterior pathways.

It is important to note that the 3-year statute of limitations for actions for damage to real property and fraud still apply, and one must bring a claim within 3 years of the discovery of either damage to real property, which includes virtually all construction defects, and discovery of fraud.

sb800 statute of limitations is codified in california civil code 896 to 945.5

Construction Defect Statutes of Limitations Overlap & Integrate

All of the foregoing statutes of limitations apply in an overlapping and integrated manner and an analysis must be made of each individual circumstance in each case to determine their application. The best course of action is often simply to file the lawsuit as soon as you become aware of problems, recognizing the 3-year limitations period for damage to real property and fraud, thus preserving the claim.

It is also vital to note that the statutes of limitations are not affected or tolled in any way due to the coronavirus pandemic. One must act to protect one’s rights regardless of the health issues and or restrictions presented by any governmental entity related to efforts to deal with the coronavirus.

 

Find Out If Any Statutes of Limitations Have Passed For Your Case

Timothy Norton of Norton & Associates, Los Angeles Real Estate and Construction Defect Attorney, has 34 years of experience in construction defect litigation, with $190m in jury verdicts, $70m punitive damage verdict, and millions more in settlements. 

Excellence, direct personal attention and a record of success. For a consultation and case evaluation, call (310) 706-4134, or email to: [email protected] today. 

It is also vital to note that the statutes of limitations are not affected or tolled in any way due to the coronavirus pandemic. One must act to protect one’s rights regardless of the health issues and or restrictions presented by any governmental entity related to efforts to deal with the coronavirus.

Exceptions to the Construction Defect Statues of Limitation in California: Equitable Tolling and Estoppel

Statutes of limitation are critically important time limits that a plaintiff must comply with in filing a lawsuit. While these time frames are very strict and definitive, there are exceptions that have been developed by the courts that may be available to a plaintiff to afford relief from the running of the statutes of limitation, which bars such actions after the time period has run. This section addresses the court-made doctrines of equitable tolling and equitable estoppel as they apply to statutes of limitation in construction defect cases in California.

Equitable Tolling & Equitable Estoppel Compared

The doctrine of equitable tolling is a rule of procedure adopted by the California courts that operates independently of the Code of Civil Procedure (which sets out the statutes of limitation). Equitable tolling is distinct from equitable estoppel. Tolling is concerned with the point at which the limitations period begins to run and the circumstances in which the running of the limitations period may be suspended.

Equitable estoppel comes into play only after the limitations period has run and addresses the circumstances in which a party may be estopped from asserting the statute of limitations as a defense to an admittedly untimely action because the defendant’s conduct has induced the other into forbearing to file suit within the applicable limitations period. Equitable estoppel is wholly independent of the limitations period itself and takes its life from the equitable principle that no man may profit from his own wrongdoing in a court of justice. Thus, equitable estoppel is available even where the limitations statute at issue expressly precludes tolling. 

As the California Supreme Court noted in Addison v. State of California (1978) 21 Cal.3rd 313, 318-319 and reiterated in Mills v. Forestex (2003) 108 Cal.App.4th 625, 650, “It is fundamental that the primary purpose of statutes of limitation is to prevent the assertion of stale claims by plaintiffs who have failed to file their action until such evidence is no longer fresh and witnesses no longer available. However, courts have adhered to the general policy which favors relieving plaintiff of the bar of a statute of limitations period when, possessing several legal remedies, he, reasonably and in good faith, pursues one designed to lessen the extent of his injuries or damage. Application of the doctrine of equitable tolling requires timely notice (to the defendant), a lack of prejudice to the defendant and a reasonable and good faith conduct on the part of the plaintiff. Mills v. Forestex turned on the issue of a warranty claim which the plaintiff maintained they had made and negotiated with the defendant, Forestex. However, the plaintiff, Mills, had no evidence to support their position, and even if there was a period of tolling, the court calculated that the plaintiff had still failed to file their action within  the 3-year time period for actions for damage to real property, as well as within the 4-year time period for contract-based claims. And, the Mills court noted a critical nuance of equitable tolling, which is that the doctrine applies to either toll the start when the statute of limitations would begin to run, or tolls the running of the statute during the time period when the statute would be running, but does not apply when the statute has already run out. Once the statute has run out, the doctrine of equitable estoppel may apply, but not equitable tolling. 

Under the doctrine of equitable tolling, if facts and circumstances supporting tolling do exist, such as a clear agreement to delay action or, for example to specifically extend the warranty period, all of which would be a question of fact for the jury, and if the doctrine of equitable tolling is applied, then either the statute of limitations is deemed to have not started running at all, or has been tolled, or stopped, during the period in which the delay or extension tolling circumstances exist. 

While the Supreme Court in Lantzy declined to apply equitable tolling to the 10-year statute of limitations in CCP § 337.15, this is a limited and narrow ruling based on the already long 10-year period that exists under CCP § 337.15, the limiting fact that repairs alone do not toll the 10-year statue, thus leaving open the availability of equitable relief when other conduct and representations are involved, the explicitly noted availability of equitable estoppel (as well as fraud) to protect plaintiffs, and the clear fact, that the decision is narrowly limited to the 10-year statute of limitations under CCP § 337.15, and does not extend to other statutes of limitation such as breach of contract, fraud or injury to real property.

Equitable Estoppel

One aspect of equitable estoppel is codified in Evidence Code § 623, which provides that: “whenever a party has, by his own statement or conduct, intentionally and deliberately led another to believe a particular thing true and to act upon such belief, he is not, in any litigation arising out of such statement, permitted to contradict it.” See, Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 383-384. Estoppel may arise although there was no designed fraud on the part of the person to be estopped. To create equitable estoppel, it is enough of the party has been induced to refrain from taking such action as lay in his power, by which he might have retrieved his position and saved himself from loss … where the delay in commencing action is induced by the conduct of the defendant it cannot be availed of his as a defense. 

According to the California Supreme Court in Lantzy v. Centex Homes, supra. at p. 673-674, the key element for equitable estoppel is the plaintiff’s reliance on some sort of action, words or conduct of the defendant. The elements Lantzy identifies are: 1) If one potentially liable for construction defects represents, while the limitations period is still running, that all actionable damage has been or will be repaired, thus making it unnecessary to sue, 2) the plaintiff reasonably relies on this representation to refrain from bringing a timely action, 3) the representation proves false after the limitations period has expired and 4) the plaintiff proceeds diligently once the truth has been discovered, the defendant may be estopped to assert the statute of limitations defense to the action. As noted in the Lantzy decision, defendant’s conduct which reasonably induces the plaintiff to rely and forbear is a key element, and once pled, clearly an issue of fact for the jury.

Get in Touch

For a consultation on construction defects and the application of the statutes of limitation in California and equitable tolling or equitable estoppel to your case, contact Timothy Norton at (310) 706-4134 today to make an appointment. 

34 years experience in construction defect and real estate litigation. $190m in jury verdict awards. $72m in punitive damages awarded. Millions more in settlements.

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