California Construction Defect Statute of Limitations

Statutes of Limitations on Construction Defect Lawsuits in California

George W. Wolff
June 29, 2010

There are a number of possible legal theories on which a property owner or purchaser may base a construction defect case, including breach of a contract with the builder, negligence or professional negligence by the builder, architect or engineer, strict liability breach of express written warranties or warranties implied in law, failure to disclose or concealment and others.

A number of several approaches might apply in a single case typically, and each one may have a different statute of limitation, which requires an owner to bring such within a particular time period after the right to sue accrues.

The time limits to bring suit depend upon the legal grounds or basis for the claim, and whether there is a contract between the property owner and the contractor, whether you are purchasing a new building, who you are suing, whether you are suing for negligence, etc. Which limitations period applies as frequently not clear, so do not delay.

A. Breach of Contract Claims

Where an owner has directly hired a contractor to perform construction work on a property, and it is claimed that the contractor did not build the project according to the terms of the plans and specifications or requirements of the contract, and if the contract between the parties was in writing, suit must be filed in Court within four (4) years of the date the contract was breached. If the contract was not in writing, and was oral, suit must be filed with the Court within two (2) years of the date the agreement was breached.

If the contract contains an arbitration clause, starting an arbitration proceeding does not protect against the expiration of any of the Statutes of Limitation of any type, and you still must file suit – and then ask to stay the lawsuit pending the arbitration.

B. Claims for Negligent Construction

Where an owner claims the work on a property was not performed to the professional quality standards prevalent in the geographic area where the job was located, any person who was damaged by that poor work- including subsequent owners of property, damaged by contractor’s negligence – must bring suit for those damages within three (3) years of the date those damages were suffered, became evident, – or were “incurred” – by the plaintiff property owner.

However, suit may not be brought for negligence more than four (4) years after the completion of the construction work where the defects in the work are “patent” or obvious to a reasonable person.

Where the defects or problems are not “patent”, and are “latent” – or not obvious to a reasonable person – all suits for negligence must be filed with the Court within ten (10) years of “completion” of the project, regardless of when the damages were suffered or when the defective and negligent work was discovered. However, suit still must be brought within three (3) years of when the problems were discovered or became apparent.

Even if the damages are suffered or discovered nine (9) years and 51 weeks after the job is computed, suit must still be filed in Court within ten years from “completion” of the work in question.

C. Claims for Defects in New Homes or Condominiums Build Since 2003.

Civil code section 895 creates a new kind of claims process for defective or below standard new construction work on certain new residential structures

Under this statute – sometimes called the “Builders Right to Repair” statute – certain performance standards are established for new residences sold to home buyers. The statutes of limitations run either from close of escrow or the date the developer relinquishes control of a condominium association in the case of claims by condominium associations, whichever is later. The limitations periods vary from one to five years, depending on which parts of the building are claimed to be defective.

The claims process is started by sending the builder / developer notice of what construction work is below standard, to which the builder must respond in 14 days and conduct an inspection if desired. If the builder does an inspection(s), it must make an offer to repair or of cash to do repairs within 30 days of the last inspection. If the parties do not come to an agreement on the scope of repair or amount of money offered, mediation may follow and the litigation.

Statutes of Limitations are usually stayed or tolled while this claims process is ongoing.

D. Fraud/Concealment/Misrepresentation/Failure to Disclose

The above limitations periods, ever if they have expired, do not necessarily present on owner or purchaser from suing for some misrepresentation by a builder, or from a claim for failure to disclose certain facts where there was a contractual or legal duty to disclose them.

Suit for this type of violation must usually be brought within three years from when the fraud or non-disclosure etc was discovered or should have been discovered under Code of Civil Procedure §338

E. Contract Provisions Shortening Limitations Periods

Be aware that any contract you sign with a builder, architect, or other design professional may contain provisions which greatly cut short the above Statutory limitations periods, or which may impose other pre-conditions to filing suit that limit the time to sue and your rights to sue.

Always read and understand your contract before signing it, and discuss your contract and claims with an attorney as soon as possible after a dispute arises.

http://www.hg.org/hgcommon/article.asp?id=19219