New Construction Warranty – SB 800 What it Means

SB 800 is a new California law that addresses residential construction defect litigation on new construction properties and establishes warranties for those new construction homes. This law applies to both single-family homes and condominium residential construction for purchases after January 1, 2003. Note: it does not apply to condominium conversions.

This new bill will set a new standard for construction allowing builders and developers the right to repair defects to avoid litigation up to 10 years after the purchase. It does require buyers to follow maintenance guidelines but it provides builders and developers with legal defenses. This bill will mandate that a building whether it be a condominium complex or single-family home come with a tenure warranty. Homeowners associations typically sue the developer sometime around year nine in order to get any warranty issues paid for by the insurance company.

[Read more: Do New Homes Need Inspections?]

SB 800 also will require that builders provide information to the buyer along with the contract letting the buyer know whether or not the builder has adopted the SB 800 provisions. This bill not only affects the current buyer but any subsequent buyers within the 10 year time period. Builders are still allowed to provide additional protection to a homeowner should they choose.
SB 800 to find construction defects as functionality standards for water intrusion, structural damage, soils, fire protection, plumbing and sewer and electrical. There’s also an additional category that protects “to the extent a function or component is not addressed by these standards, it shall be actionable if it causes damage.”

[Related: How to Avoid Sticker Shock on New Homes]

The statute of limitations are 10 years from the close of escrow for all construction defects, five years from the close of escrow for paint and stains per manufactures representations, and four years from the close of escrow for plumbing and sewer systems, electrical, exterior pathways, hardscapes and driveways and untreated steel fences to prevent unreasonable corrosion.
This new bill is to prevent any litigation issues, especially with homeowners associations and condo complexes. For the state of California, sellers may have a difficult time selling the unit while litigation is pending due to financial issues. With this new law, it should be easier to sell without litigation within 10 years. [Source]