California’s Right to Repair Act (SB-800) has been around since 2003. Builders and buyers often have questions about how SB-800 affects them. Today, we’ll go through why SB-800 is important, how it affects builders, and what 2-10 Home Buyers Warranty (2-10 HBW) does to protect builders in light of SB-800.
Why SB-800 matters to California builders
According to Level Up Group SF, SB-800 “sets standards for new construction, allowing builders the right to repair defects as a means of avoiding litigation . . . and provides builders with certain legal defenses.” However, SB-800 is NOT a warranty. Instead, SB-800 defines the statute of limitations and procedures to address allegations of “construction defects.”
In short, SB-800 codifies certain builder responsibilities regarding construction defects (time frames specifically) and provides a process for homeowners to make claims against builders related to such defects.
How SB-800 affects builders
SB-800 affects builders in many ways, but the following includes some of the highlights of the bill.
First, it’s important to note that SB-800’s primary focus is on the time frames in which homeowners can assert claims for construction defects, commonly called statutes of limitations. For example, SB-800 includes a 10-year statute of limitations for structural defects, which isn’t uncommon nationwide. But it also includes a five-year statute on how paints and stains interact with building surfaces. In addition, it includes a slew of four-year statutes regarding plumbing/sewer systems, electrical systems, and walkways and driveways.
The problem is that SB-800 doesn’t really define specific terms. For instance, SB-800 notes that “Plumbing and sewer systems shall be installed to operate properly and shall not materially impair the use of the structure by its inhabitants.” However, it doesn’t define what operate properly or materially impair means. Given how important definitions are in the structural space, this vague language can be confusing and problematic.
Second, SB-800 requires a one-year fit and finish warranty. But once again, SB-800 doesn’t clearly define what fit and finish means, nor does it define anything that falls under the fit-and-finish warranty. If builders and homeowners don’t have a similar set of standards to work with, it can lead to disputes and even litigation.
Finally, SB-800 requires builders to include an arbitration clause in their warranties. However, arbitration clauses can be as varied as the people who write them. So, it’s imperative for builders to know that their arbitration clause has been tested in court successfully.
What 2-10 HBW does to protect builders in light of SB-800
SB-800 provides a bunch of rules to follow without precisely defining how to follow them. Fortunately, 2-10 HBW’s industry-leading warranty program helps address the problems stated above and more.
First, 2-10 HBW’s warranty document clearly defines coverage, responsibilities, and terms like fit and finish. That helps establish common ground with homeowners so that everyone knows who’s responsible for what and when. Definitions are crucial for builders and their warranties, and 2-10 HBW clearly states those definitions, which can overcome the vague language in the law itself.
Second, 2-10 HBW’s arbitration clauses have been upheld in several court proceedings. That’s a huge benefit for builders by itself, because challenges to arbitration language can add unnecessary expenses and delays to resolving the actual dispute.
Third, SB-800’s dispute resolution process is extremely convoluted and difficult for builders. For instance, if you were to miss any deadlines under SB-800, the buyer can file a lawsuit against you. In addition to our proven arbitration clause, 2-10 HBW offers dispute avoidance and resolution services for Builder Members. 2-10 HBW’s Warranty Administration team helps move disputes through education, de-escalation, conciliation, and if necessary, an experienced arbitration service.
Fourth, SB-800 strongly recommends that you provide a Maintenance Manual to express buyer responsibility and limit exposure. 2-10 HBW provides this, which means you don’t have to create it.
Finally, 2-10 HBW is a third-party warranty provider. That’s incredibly important because third-party warranties tend to stand up strongly in court. On the other hand, when builders provide their own warranty, courts may view it as too self-serving to the builder (e.g., Porter v. Toll Brothers). In addition, third-party validation means a lot to buyers.
Conclusion: 2-10 HBW helps builders bound by SB-800
Following the law is obviously important, but SB-800 can sometimes be difficult for builders and buyers to interpret. With a structural warranty from 2-10 HBW, builders can set clear expectations for buyers. You also get access to 2-10 HBW’s Dispute Avoidance and Resolution service, in addition to our proven arbitration clause.
Don’t risk falling prey to vague and overly general legal language. Cover all your homes with 2-10 HBW to protect yourself and your buyers, and allow yourself to do what you do best—build quality homes.
Disclaimer: 2-10 HBW is not a law firm and is not providing legal advice. The information provided in this article is subject to the terms and conditions of this website, and is only intended to be used for informational purposes and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this information or any of the links contained herein does not create any obligation or relationship between you and 2-10 HBW.
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