Knowing what to expect when it comes to consumer protection on new construction buildings is key when you’re purchasing a newly built house or condo.
Construction defects are unfortunately pretty common in new buildings—everything from water intrusion (the most common one) to inadequate ventilation or faulty sewer systems. It’s actually quite common for homeowners associations (HOAs) to investigate any and all building components and their potential issues within the first ten years of construction. That’s the timeframe HOAs have to report defects to the developer if there’s any hope in getting repairs done, as per what’s called SB 800.
SB 800 is a law that went into effect in 2002. It’s applicable to all newly constructed single-family homes or condos intended to be sold as individual dwelling units where the purchase agreement was signed by the seller on or after January 1, 2003. (But it doesn’t apply to condo conversions.) Here are the law’s key points:
There are seven building components covered under SB 800. Defects you discover related to water intrusion, structural, soils, fire protection, plumbing, sewer and electrical are all included.
There are different statutes of limitation for different claims. There’s a general ten-year timeframe for reporting construction defects. More specific items in categories like paint, plumbing/sewer systems, earth-to-wood contact, and what’s called “fit and finish” (cabinets, flooring, and the like) have a one- to five-year warranty, depending on what category you’re talking about.
If you discover a defect, you can’t immediately file a lawsuit. One of SB 800’s goals is to reduce litigation between builders and homeowners. The law outlines a detailed pre-litigation procedure that a homeowner has to follow before filing any lawsuits—stuff like giving written notice of the defect to the builder via certified mail. Builders have a specific timeframe in which to investigate and respond to the claim. Mediation can be involved. If you don’t file your complaint according to these procedures, you may end up with no resolution.
When you’re signing a purchase agreement for new construction property, make sure you read the fine print. As I mentioned before, it’s also a great idea to consult a qualified real estate attorney who can review the contract and addenda to make sure everything is on the up and up. Don’t completely rely on random info you or your agent dig up online, because builders may not always be offering their homes with the same level of warranty.
And if you’re purchasing a condo in a building that’s nearing its 10-year statue of limitations, do inquire about potential HOA defect claims reported to the developer. It’s good to know what’s on the horizon if repairs are on track to be done, and whether the developer will be covering those costs.