AB 1903

Existing law specifies the rights and requirements of a homeowner to bring an action for construction defects, including applicable standards for home construction, the statute of limitations, the burden of proof, the damages recoverable, and detailed prelitigation procedures. This bill would establish an alternative process for certified buildings, as established by the bill. The bill would authorize a builder to obtain a certified building status for a building by undergoing private inspection, repairs, and reinspection during construction and would require the inspector to be a private licensed architect, engineer, or general contractor, as specified. The bill would prohibit future challenges to the status of the building as a certified building once certified. The bill would authorize the builder of a certified building to establish its own process for handling postconstruction claims. The bill would specify that a builder has a complete and unrestricted right to inspect and repair a certified building at times mutually agreed upon by the builder and claimant and within timeframes established by the builder. If a claimant refuses the offer of repair or prevents, restricts, delays, or frustrates access for more than 7 days from the mutually agreed upon day, the bill would deem the builder to have received a release. Existing law requires a person claiming that the construction of their residence violates standards of construction, as specified, to provide a written notice of the claim to the builder that, among other things, describes the claimed violation in reasonable detail sufficient to determine the nature and location of the claimed violation. Existing law authorizes that written notice to be provided by the claimant’s legal representative. This bill would require additional information to be included in the notice, including, at a minimum, a description of the observable evidence of the damage believed to result from a violation, copies of any reasonably available photographs, estimates or reports relating to the damage, and the room within the home or unit in which that evidence may be found. The bill, in case of a group of homeowners or a homeowner’s association, would require the notice to be signed by each affected homeowner and for claims involving common areas, to be verified by the president of the association. Existing law prohibits a builder from obtaining a release or waiver in exchange for repair work mandated by law, as specified, and authorizes a claimant, at the conclusion of the repair, to file an action for violation of the applicable standard or for a claim of inadequate repair. This bill would repeal that provision. Existing law authorizes the builder to make a cash offer and no repair, and authorizes the builder to obtain a reasonable release in exchange for the cash payment. This bill would instead authorize the builder to obtain a release related to the claims asserted in the above-described notice in exchange for either a cash payment or repair, including a full and general release, as specified. Existing law specifies that the prelitigation procedures are to be strictly construed, and that, if the claimant does not conform with the requirements, the builder may bring a motion to stay any subsequent court action or other proceeding until the requirements are met. This bill would instead authorize the builder to bring a motion to dismiss any court action or other proceeding and would require the court to grant the motion. Existing law specifies that to make a claim for violation of construction standards applicable to construction defect claims, a homeowner need only demonstrate that the home does not meet the applicable standard, and that no further showing of causation or damages is required to meet the burden of proof, provided that the violation arises out of, pertains to, or is related to, the original construction. This bill would instead require a claimant to affirmatively demonstrate that there is a violation of the applicable standard, that the violation caused appreciable, nonspeculative, present physical damage to another component part of the building, and that the violation is caused by the original construction. The bill would specify that only specified construction defect provisions in the Civil Code are the exclusive remedy for any claim or action seeking recovery of damages arising out of residential construction, design specifications, surveying, planning, supervision, testing, or observation of construction. The bill would prohibit an insurer from asserting repairs as a voluntary payment or as a payment made without the insurer’s consent, or deny counting the costs associated with those repairs. Existing law authorizes a homeowner to recover reasonable investigative costs for each established violation. This bill would delete that provision, and would prohibit the recovery of investigative costs. The bill would prohibit an action from being filed unless the conditions for filing an action have been met for each claimed violation. The bill would prohibit a claim for damages based on extrapolation of claims, and would limit testing of the components of the structure, as specified. Existing law, the Davis-Stirling Common Interest Development Act, governs the management and operation of common interest developments, and requires an association to manage a common interest development. Existing law authorizes a common interest development association to institute, defend, settle, or intervene in litigation, arbitration, mediation, or administrative proceedings in matters pertaining to damage to a separate interest that the association is obligated to repair or that arises out of, or is integrally related to, damage to a separate interest that the association is obligated to maintain or repair. This bill would exclude construction defect claims from that authorization to pursue claims for damage to separate interests. Existing law requires the board of directors of an association, within 30 days before filing a civil action against the developer of a common interest development for certain damages, to provide a written notice to each member of the association. This bill would require the notice to also include a statement, in 12-point bold type, that states, among other things, that the filing of a civil action may affect the value of the residence and the ability to sell the residence or refinance a mortgage. The bill would also require the board to provide a courtesy copy of each notice to each member to the builder, as defined. The bill would state that an association and its officers and directors shall not be liable for breach of fiduciary duty for not filing a claim or action, as specified.