Built to last. Insured to match.

The SB 800 claim clock, day by day

California's Right to Repair Act (Civil Code 895 and following) covers new homes whose purchase agreement the seller signed on or after January 1, 2003 (938). Before suing over the 896 standards, the homeowner must send you written notice by certified mail, overnight mail or personal delivery (910). Then the clocks run:

1. 14 days after receiving the notice to acknowledge it in writing (913).
2. 14 days after acknowledging to finish the initial inspection and testing if you inspect, restoring the home within 48 hours. A second inspection needs written reasons within 3 days and must be done within 40 days of the first (916).
3. 30 days after the initial or second inspection to make a written repair offer, if you choose to offer. Named repair contractors must be fully insured, with proof on request (917). The offer must include an offer to mediate, held within 15 days of the homeowner's request (919).
4. 30 days for the homeowner to accept or ask for alternative contractors (918).
5. Repairs start within 14 days of acceptance, 7 days after a mediation, or 5 days after a required permit, and every effort must be made to finish within 120 days (921).

You must give written proof of liability insurance for the inspection (916(a)). Miss the acknowledgment, inspection or repair-offer deadline and the homeowner can file suit (915, 916(d), 920). If you'll hold a sub responsible, notify it in time to attend (916(e)). Send me any 910 notice the day it arrives.

Which deadline ends your exposure

Two statutes set how long a finished home can produce claims:

• Civil Code 941. No action under the Right to Repair Act more than 10 years after substantial completion (941(a)). Repairs made through the claim process don't extend the time to file, apart from the tolling in Section 927 (941(e)).
• Shorter windows in 896. From close of escrow: plumbing, sewer, electrical and hardscape at 4 years, paint and stains at 5, dryer ducts and untreated wood posts at 2, and irrigation and drainage at 1.
• Code of Civil Procedure 337.15. Section 941(d) takes Act claims out of 337.15, but it still covers other latent-deficiency suits against developers and builders. Its 10 years start at substantial completion, but no later than the earliest of final inspection, a recorded notice of completion, use or occupation, or one year after work stops (337.15(g)). It doesn't apply to willful misconduct or fraudulent concealment (337.15(f)).

Both statutes allow indemnity cross-complaints in a case filed on time (941(b), 337.15(c)). Keep the carrier, policy number and dates of every general liability and umbrella policy for at least ten years after your last closing. Call me before switching carriers or winding down. Repose rules vary by state.

Running a wrap-up on a residential project

For a residential wrap-up, the Civil Code sets what you can ask of enrolled subs and what you must tell them:

• No indemnity for covered claims. In contracts entered into after January 1, 2009, a clause requiring an enrolled sub to indemnify, hold harmless or defend against a claim the program covers is unenforceable (2782.9(a)).
• Deductible contributions. You can require a reasonably allocated contribution to the self-insured retention or deductible if the contract discloses the maximum and how it's collected. You collect only as the cost is incurred, in proportion to claims tied to the sub's work, after written notice of the amount and basis, and never more in total than the retention or deductible due (2782.9(b)).
• Premium credit. The contract documents must state the premium credit required from each sub or how it's calculated. If it isn't disclosed before bidding, a sub isn't bound by its bid unless it may raise it by the difference (2782.95(a), (d)).
• Policy facts. To the extent known, disclose limits, scope, term, the deductible or occurrence trigger, a dated good-faith estimate of remaining limits from the insurer and, for multi-project policies, the unit count on the application (2782.95(b)). Subs can request a policy copy, or a binder until one exists (2782.95(c)).

The 2782.95 rules apply to private residential work first started after January 1, 2009. When I place a builder wrap-up, I request the remaining-limits estimate from the insurer in writing. Public works and nonresidential wrap-ups follow 2782.96 instead.

Official sources

• Cal. Civil Code 910 (claim notice)
• Cal. Civil Code 912 (builder document duties)
• Cal. Civil Code 916 (inspection timelines)
• Cal. Civil Code 917 (repair offer)
• Cal. Civil Code 921 (repair timelines)
• Cal. Civil Code 941 (10-year limit)
• Cal. Civil Code 896 (functionality standards)
• Cal. Code of Civil Procedure 337.15 (latent deficiency)
• Cal. Civil Code 2782 (construction indemnity)
• Cal. Civil Code 2782.95 (residential wrap-up disclosures)