Archive - February 2015

1
SB 652: Homeowners Required To Notify Potential Buyers Of Construction Defect Claims
2
Colorado Update: Proposed Legislation Regarding HOA Condominium Defect Claims
3
Contractors: CALGreen Energy Provisions Have Been Changed
4
California Supreme Court Denies Petition for Review and Request for Depublication of Recent Appellate Decision that Limited Application of SB 800

SB 652: Homeowners Required To Notify Potential Buyers Of Construction Defect Claims

By: Richard H. Glucksman and Jon A. Turigliatto
February 5, 2015

Beginning July 1, 2014, SB 652 amends the Transfer Disclosure Statement required under Civil Code §1102.6 for residential property, to ask sellers about the following type of specified claims “threatening or affecting” the property:

  1. Claims for damages by the seller pursuant to Civil Code § 910 or 914.
  2. Claims for breach of warranty pursuant to Civil Code §900.
  3. Claims for breach of an enhanced protection agreement pursuant to Civil Code §903.
  4. Claims alleging defect or deficiency in the property or common area improvements pursuant to Civil Code §910 or 914.

Newly enacted SB 652 requires the seller of residential property to disclose to potential purchasers all specified claims of damages related to construction defects, including all pre-litigation claims presented to the builder and the status of those claims.

Existing law, pursuant to SB 800, requires a homeowner to follow a mandatory procedure prior to filing a construction defect lawsuit. The process requires the homeowner to submit the claim to the builder, and then gives the builder a right to repair the defects. If the builder fails to make repairs, or the repairs are not adequate, the homeowner may proceed with the filing of a lawsuit. While existing law also requires that a seller of residential property disclose at the time of transfer anything that materially affects the value of the property, there is no requirement that a homeowner notify a potential buyer of a construction defect within the home.

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Colorado Update: Proposed Legislation Regarding HOA Condominium Defect Claims

By: Richard H. Glucksman and Jon A. Turigliatto
February 5, 2015

DISCUSSION

As part of our on-going mission to monitor and track legislatures, legal decisions and developments throughout the United States that impact our clients, we share the following brief discussion of potential tort reform legislation presented in Colorado regarding construction claims by Homeowner Associations for condominiums.

Lawmakers in Colorado formally introduced SB 220, a proposed measure requiring:

  1. Condo owners to submit to alternative-dispute resolution, such as mediation or arbitration, for any construction defect claim that occurred when the homeowner association required alternative-dispute resolution, even if the requirement no longer exists at the time the claim is brought;

  2. Notice be given prior to the purchase and sale of a condominium that the homeowner association’s may require binding arbitration of certain disputes; and

  3. The association’s board to obtain the written consent of a majority of the condo owners before a construction defect lawsuit is filed on behalf of the homeowner association (emphasis added).

Currently, in Colorado, homeowner association boards are only required to obtain two condominium owners’ consent to file a construction defect lawsuit against a developer. SB 220 would real significantly increased this requirement by requiring that the association board must obtain the written consent of a majority of the condominium owners before filing a construction defect lawsuit. This helpful requirement would have had the practical impact of reducing the number of lawsuits filed and decrease the threat of frivolous lawsuits against developers. Furthermore, it would require more construction defect claims to be resolved out of court, further discouraging homeowner associations from bringing meritless claims against developers.

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Contractors: CALGreen Energy Provisions Have Been Changed

California Contractor Operations Affected by CALGreen Energy Provisions

By: Richard H. Glucksman and Jon A. Turigliatto
February 5, 2015

Energy provisions effective July 1, 2014, instead of January 1, 2014

There have been changes to California contractors whose operations are affected by residential and non-residential energy regulations or CALGreen energy provisions. Contractors are being alerted to the change in the effective date to the 2013 California Energy Code, 2013 California Administrative Code – Chapter 10, and certain energy provisions in the 2013 California Green Building Code (CALGreen).

The original effective date of January 1, 2014, for specific sections of the 2013 triennial edition of the California Building Standards Code, Title 24, has been changed to July 1, 2014.

The California Energy Commission (CEC) experienced unanticipated delays necessitating the CEC energy related provisions. The California Building Standards Commission (CBSC) approved the CEC action and issued Information Bulletin 13-07 on December 18, 2013, announcing the delayed effective date.

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California Supreme Court Denies Petition for Review and Request for Depublication of Recent Appellate Decision that Limited Application of SB 800

Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC 2013 WL 4538693 (Cal.App. 4 Dist.)

By: Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper

On December 11, 2013, the California Supreme Court denied Respondent, Brookfield Crystal Cove, LLC’s Petition for Review and Request for Depublication of the recent decision by the Fourth District Court of Appeal in Liberty Mutual Ins. Co.  v. Brookfield Crystal Cove LLC, 2013 WL 4538693 (Cal.App. 4 Dist.) in which the Court of Appeal held that California’s Right to Repair Act (SB 800) is not a homeowner’s exclusive remedy for residential construction defects.

Liberty Mutual is now citable decisional authority in California and holds that homeowners may assert common law causes of action for construction defects that have resulted in actual property damage.  For construction defect that have caused actual property damage, homeowners are no longer required to comply with SB 800’s statutory pre-litigation procedures which provide builders with the opportunity to make repairs prior to the homeowner’s initiation of litigation.  Additionally, the decision permits homeowners to circumvent the shortened limitations periods for certain types of construction defects under the Right to Repair Act.

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