Prelitigation Procedures in Construction Defect Actions

Civil Code Division 2, Part 2, itle 7, Chapter 4 deals with prelitigation procedures in actions for construction defects in California.

Section 910 provides that, prior to filing an action against any party alleged to have contributed to a violation of the standards set forth in Chapter 2, the claimant is required to initiate the specified prelitigation procedures in this section.

Section 911 defined the term “builder.”

Section 912 requires a builder to do nine specified activities.

Section 913 requires a builder or his or her representative to acknowledge, in writing, receipt of the notice of the claim within 14 days after receipt of the notice of the claim. If the notice of the claim is served by the claimant’s legal representative, or if the builder receives a written representation letter from a homeowner’s attorney, the builder is required to include the attorney in all subsequent substantive communications.

Section 914 explains that this chapter establishes a nonadversarial procedure, including the remedies available under this chapter which, if the procedure does not resolve the dispute between the parties, may result in a subsequent action to enforce the other chapters of this title. A builder may attempt to commence nonadversarial contractual provisions other than the nonadversarial procedures and remedies set forth in this chapter, but may not require adherence to the nonadversarial procedures and remedies set forth in this chapter, regardless of whether the builder’s own alternative nonadversarial contractual provisions are successful in resolving the dispute or ultimately deemed enforceable.

Section 915 states that, if a builder fails to acknowledge receipt of the notice of a claim within the time specified, elects not to go through the process set forth in this chapter, or fails to request an inspection within the time specified, or at the conclusion or cessation of an alternative nonadversarial proceeding, this chapter does not apply and the homeowner is released from the requirements of this chapter and may proceed with the filing of an action.

Section 916 says that, if a builder elects to inspect the claimed unmet standards, the builder is required to complete the initial inspection and testing within 14 days after acknowledgment of receipt of the notice of the claim, at a mutually convenient date and time. If the homeowner has retained legal representation, the inspection is scheduled with the legal representative’s office at a mutually convenient date and time, unless the legal representative is unavailable during the relevant time periods.

All costs of builder inspection and testing are borne by the builder. The builder must also provide written proof that the builder has liability insurance to cover any damages or injuries occurring during inspection and testing. The builder has to restore the property to its pretesting condition within 48 hours of the testing. The builder must, upon request, allow the inspections to be observed and electronically recorded, video recorded, or photographed by the claimant or his or her legal representative.

Section 917 provides that, within 30 days of the initial or, if requested, second inspection or testing, the builder may offer in writing to repair the violation. The offer to repair must also compensate the homeowner for all applicable damages recoverable within the timeframe for the repair set forth in this chapter. Any offer is to be accompanied by a detailed, specific, step-by-step statement identifying the particular violation that is being repaired, explaining the nature, scope, and location of the repair, and setting a reasonable completion date for the repair.

Section 918 requires, upon receipt of the offer to repair, the homeowner to have 30 days to authorize the builder to proceed with the repair. The homeowner may alternatively request, at the homeowner’s sole option and discretion, that the builder provide the names, addresses, telephone numbers, and license numbers for up to three alternative contractors who are not owned or financially controlled by the builder and who regularly conduct business in the county where the structure is located.

Section 919 states that the offer to repair must be accompanied by an offer to mediate the dispute if the homeowner so chooses. The mediation is limited to a four-hour mediation, except as otherwise mutually agreed before a nonaffiliated mediator selected and paid for by the builder.

Section 920 provides that, if the builder fails to make an offer to repair or otherwise strictly comply with this chapter within the times specified, the claimant is released from the requirements of this chapter and may proceed with the filing of an action.

Section 921 explains that, in the event that a resolution under this chapter involves a repair by the builder, the builder is required to make an appointment with the claimant, make all appropriate arrangements to effectuate a repair of the claimed unmet standards, and compensate the homeowner for all damages resulting therefrom free of charge to the claimant. The repair must be scheduled through the claimant’s legal representative, if any, unless he or she is unavailable during the relevant time periods.

The builder is required to ensure that work done on the repairs is done with the utmost diligence, and that the repairs are completed as soon as reasonably possible, subject to the nature of the repair or some unforeseen event not caused by the builder or the contractor performing the repair. Every effort must be made to complete the repair within 120 days.

Section 922 requires the builder, upon request, to allow the repair to be observed and electronically recorded, video recorded, or photographed by the claimant or his or her legal representative. Nothing that occurs during the repair process may be used or introduced as evidence to support a spoliation defense by any potential party in any subsequent litigation.

Section 923 requires the builder to provide the homeowner or his or her legal representative, upon request, with copies of all correspondence, photographs, and other materials pertaining or relating in any manner to the repairs.

Section 924 states that, if the builder elects to repair some, but not all of, the claimed unmet standards, the builder is required, at the same time it makes its offer, to set forth with particularity in writing the reasons, and the support for those reasons, for not repairing all claimed unmet standards.

Section 925 provides that, if the builder fails to complete the repair within the time specified in the repair plan, the claimant is released from the requirements of this chapter and may proceed with the filing of an action. If this occurs, the standards set forth in the other chapters of this title continue to apply to the action.

Section 926 states that the builder may not obtain a release or waiver of any kind in exchange for the repair work mandated by this chapter. At the conclusion of the repair, the claimant may proceed with filing an action for violation of the applicable standard or for a claim of inadequate repair, or both, including all applicable damages available.

Section 927 explains that, if the applicable statute of limitations has otherwise run during this process, the time period for filing a complaint or other legal remedies for violation of any provision of this title, or for a claim of inadequate repair, is extended from the time of the original claim by the claimant to 100 days after the repair is completed, whether or not the particular violation is the one being repaired.

If the builder fails to acknowledge the claim within the time specified, elects not to go through this statutory process, or fails to request an inspection within the time specified, the time period for filing a complaint or other legal remedies for violation of any provision of this title is extended from the time of the original claim by the claimant to 45 days after the time for responding to the notice of claim has expired. If the builder elects to attempt to enforce its own nonadversarial procedure in lieu of the procedure set forth in this chapter, the time period for filing a complaint or other legal remedies for violation of any provision of this part is extended.

Section 928 provides that, if the builder has invoked this chapter and completed a repair, prior to filing an action, if there has been no previous mediation between the parties, the homeowner or his or her legal representative is required to request mediation in writing. The mediation is limited to four hours, except as otherwise mutually agreed before a nonaffiliated mediator selected and paid for by the builder.

Section 929 states that nothing in this chapter prohibits the builder from making only a cash offer and no repair. In this situation, the homeowner is free to accept the offer, or he or she may reject the offer and proceed with the filing of an action.

Section 930 specifies that the time periods and all other requirements in this chapter are to be strictly construed and, unless extended by the mutual agreement of the parties in accordance with this chapter, will govern the rights and obligations under this title.

If a builder fails to act in accordance with this section within the timeframes mandated, unless extended by the mutual agreement of the parties as evidenced by a postclaim written confirmation by the affected homeowner demonstrating that he or she has knowingly and voluntarily extended the statutory timeframe, the claimant may proceed with filing an action. If this occurs, the standards of the other chapters of this title continue to apply to the action.

Section 931 explains that, if a claim combines causes of action or damages not covered by this part, the claimed unmet standards must be administered according to this part, although evidence of the property in its unrepaired condition may be introduced to support the respective elements of any such cause of action.

Section 932 states that subsequently discovered claims of unmet standards must be administered separately under this chapter. However, in the case of a detached single family residence, in the same home, if the subsequently discovered claim is for a violation of the same standard as that which has already been initiated by the same claimant and the subject of a currently pending action, the claimant need not reinitiate the process as to the same standard.

Section 933 provides that, if any enforcement of these standards is commenced, the fact that a repair effort was made may be introduced to the trier of fact. However, the claimant may use the condition of the property prior to the repair as the basis for contending that the repair work was inappropriate, inadequate, or incomplete, or that the violation still exists.

Section 934 says that evidence of both parties’ conduct during this process may be introduced during a subsequent enforcement action, if any, with the exception of any mediation. Any repair efforts undertaken by the builder, are not to be considered settlement communications or offers of settlement and are not inadmissible in evidence on such a basis.

Section 935 states that, to the extent that provisions of this chapter are enforced and those provisions are substantially similar to provisions in Section 6000, but an action is subsequently commenced under Section 6000, the parties are excused from performing the substantially similar requirements under Section 6000.

Section 936 says that each and every provision of the other chapters of this title apply to general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals to the extent that the general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals caused, in whole or in part, a violation of a particular standard as the result of a negligent act or omission or a breach of contract.

Section 937 explains that nothing in this title is to be interpreted to eliminate or abrogate the requirement to comply with Section 411.35 of the Code of Civil Procedure or to affect the liability of design professionals, including architects and architectural firms, for claims and damages not covered by this title.