Adjusters who handle residential construction defect liability claims in California are well acquainted with the pre-litigation procedures required by the Right to Repair Act. Until now, it was unresolved whether those procedures applied to property damage claims as well as economic loss claims. The California Supreme Court answered that question in McMillin Albany v. Superior Court (Van Tassell) (Jan. 18, 2018, S229762) ___ Cal.5th ___. The Court’s decision makes it clear that when dealing with construction defects in houses, builders have to be given the chance to repair alleged defects before litigation goes ahead, even for property damage claims.
Since the early 2000s, California’s Right to Repair Act (Civil Code sections 895-945.5) has required owners of stand-alone residential units to give the builder a chance to repair construction defects before proceeding with a lawsuit. The Act spells out the notification procedure, and specifies numerous standards that builders of houses must meet. Everyone agreed that the law applied to situations where the owner alleged a construction defect because the builder had not met one or more of the standards spelled out in the law. However, there was a question as to whether the Act’s notice and repair requirements applied to claimants who suffered additional property damage caused by the construction defect.
McMillin has resolved this ambiguity. It is now settled law that a homeowner with a common law construction defect claim for property damage has to follow the Act’s procedures of notifying the builder. The builder then has the option to inspect the alleged defects and even repair or pay for the defects.
There are two important exceptions: Common law construction defect claims for bodily injury are not subject to these notice requirements, and the Right to Repair Act does not apply to condominiums.