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Contractors And Owners Both Win With Right To Repair Act
by Shahirah Salem, Esq.
An August 26, 2015 decision by the California Court of Appeal holds that homeowners bringing a claim for damages for residential construction defects must first follow the pre-litigation procedures established by the Right to Repair Act (“RRA”).
In McMillin Albany LLC et al. v. The Superior Court of Kern County, the owners of 37 homes filed a lawsuit against the developer for the recovery of damages resulting from defects in the construction of their homes. Among other causes of action, the homeowners’ lawsuit alleged a violation of the building standards under the RRA.
McMillin (the developer) moved to stay the lawsuit until the homeowners had complied with the pre-litigation procedures set out in the RRA. Under the RRA, before a homeowner claiming defective residential construction can file an action against the builder in court, the homeowner must give notice of the claimed defects to the builder and engage in a non-adversarial pre-litigation procedure, affording the builder an opportunity to inspect and offer to repair the defects. The homeowners dismissed the cause of action in their complaint alleging a violation of the RRA and opposed McMillin’s motion. The homeowners argued that once they dismissed their cause of action for violation of the RRA, they were pursuing only “common law” claims and were no longer required to comply with the pre-litigation requirements of the RRA. The trial court denied McMillin’s motion. The Court of Appeal, however, overturned the trial court’s decision and entered a new order granting the stay of the lawsuit.
The Court of Appeal held that the RRA applies broadly to any action seeking damages for residential construction defects. Regardless of whether the lawsuit expressly alleges a cause of action under the RRA, any claim alleging deficiencies in residential construction that constitute violations of the building standards set out in the RRA (Civil Code §§ 896, 897), are subject to the RRA and its non-adversarial pre-litigation requirements.
This is a good decision. The mandatory pre-litigation procedure gives the developer the opportunity to resolve construction defect claims before costly litigation can begin; an opportunity that benefits both the homeowners and the developer.
Shahirah Salem is an Associate with Hunt Ortmann, a leader in California construction law. If you have any questions about this bulletin or the Right to Repair Act, please contact her at Salem@huntortmann.com.