NEW HOME WARRANTY

I receive a call nearly every week asking me about statutory new home warranty rules.
Some builders provide express new home warranties to buyers that are included with the closing documents when the buyer closes on his new home.
For those buyers where the builder did not provide an express home warranty, California law implies a new home warranty. These new home warranties are found in Civil Code section 896, and are also know as the Right to Repair Act, and are summarized as follows:

ONE-YEAR WARRANTY ITEMS:
“Manufactured items” such as appliances, air conditioners, and fixtures have a one-year warranty.
“Fit and finish” items such as interior/exterior walls, paint finishes, counter tops, flooring, cabinets, mirrors and trim (i.e. baseboard and moldings) have a one-year warranty.
“Exterior” irrigation, drainage, landscaping systems have a one-year warranty.

TWO-YEAR WARRANTY ITEMS:
“Untreated Wood” posts installed in contact with soil have a two-year warranty.
“Dryer Ducts” have a two-year warranty as to material and function.

FOUR-YEAR WARRANTY ITEMS:
“Plumbing” and Sewer systems have a four-year warranty.
“Electrical” systems have a four-year warranty.
“Exterior” pathways, sidewalks, patios, hardscape, and driveways have a four-year warranty. “Untreated” steel fence and related components as to corrosion have a four-year warranty.

FIVE-YEAR WARRANTY ITEMS:
“Paint” and related staining caused by deterioration of building surfaces (deteriorating stucco, drywall, texturing) have a five-year warranty.

TEN-YEAR WARRANTY ITEMS:
“All other components not specifically referenced such as retaining walls, structural framing and foundation have a ten-year warranty.

You cannot just file a lawsuit against the builder when you discover a defect. California law requires that you submit a written claim to the builder stating the defect with reasonable specificity and provide builder a reasonable period of time to repair the defect.
The builder then has an option to (1) repair the defect at no cost to the buyer, (2) provide cash in lieu of repair to the buyer or (3) demand mediation of the dispute with the buyer. Builder is responsible for all costs of the mediation if it selects that option.
The Right to Repair Act provides narrow time frames for the builder’s response. Once a claim is sent by a buyer, the builder has 14 days to acknowledge it in writing. Then builder has 14 days to inspect the defect. Builder then has another 30 days to complete a second inspection, if desired. Builder then has 40 days after the date of the last inspection to offer a resolution.
If the builder and buyer agree to a list of repairs, then builder has 14 days to commence the repairs. The builder must then make best efforts to complete repairs within 120 days thereafter.
Buyer can proceed with a lawsuit against the builder only after (1) the matter is mediated unsuccessfully or (2) builder declines to mediate the dispute.
The Right to Repair Act also allows the builder to provide its own non-adversarial dispute resolution program as long as provide prior to or concurrent with close of escrow.

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