Calif. Gov. Davis Approves Measure to Give Builders Right to Repair Construction Defects

California Governor Gray Davis (D) has approved a measure requiring homeowners to notify builders of construction defects before they can initiate litigation, according to the American Insurance Association (AIA).

“While this bill is not the final solution, it is an important step toward reducing the skyrocketing litigation that is driving the high costs and unpredictability of construction insurance,” said Mark Sektnan, AIA assistant vice president, western region. “This bill was designed to give consumers what they want—a home that works. Under current law, builders find out about defects when a lawsuit is filed. Now a builder will be notified of a defect and given an opportunity to quickly correct the problem, thus avoiding potential litigation.”

SB 800, authored by Senate President Pro Tem John Burton (D) and Assembly Speaker Herb Wesson (D), establishes specific definitions of construction defects. The bill also requires homeowners to give notice to their builder if they discover defects. Once notified, builders will then have the right to repair any purported defect within a specified amount of time. Homeowners will have the right to pursue litigation if the repairs are not made or are found to be inadequate.

“SB 800 was not designed to address the ongoing issues facing the construction insurance market,” added Sektnan. “Next year, legislative leaders will reconvene the team that negotiated SB 800 to seek solutions to other concerns insurers have with the issue. We look forward to continuing this negotiating process and identifying reforms that will bring predictability back into this line of coverage.”

SB 800 will take effect January 1, 2003.

Topics California Construction