STATUTES OF LIMITATIONS
The California Legislature has enacted statutory time
limits for commencing lawsuit in order to ensure that property owners
are diligent, do not present stale claims, and to facilitate the
production evidence.
Unless the running of the statute is "tolled" or "interrupted,"
an action that is not initiated within the designated time frame
will be forever barred. This can be an absolute defense to the plaintiffs
case.
Patent Defect
- Patent defects are defined as deficiencies which are apparent by reasonable
inspection of the property or structure. CCP §337.1.
- An action initiated to recover damages relating to patent defect in
the design, planning, construction or improvement to real property must
be brought within 4 years after substantial completion of the development.
- The Statute of Limitations for Patent Defects is 4 years.
- Substantial completion is defined as the point in time when the essential
portions of construction are complete.
- Examples include: poor drainage, sound attenuation, inadequate lighting
in the common area, roof or window leaks.
Latent Defects
- Latent defects are defined as deficiency which is not apparent by reasonable
inspection. CCP §337.15.
- An action commenced to recover damages relating to a latent defect
in design, planning, development, or improvement to real property must
be brought within 10 years after substantial completion of the development
or improvement.
- The Statue of Limitations for Latent Defects is 10 years, and the statute
applies separately to each developer, contractor, subcontractor or design
professional used in the development.
- The 10 year statute of limitations does not apply to cases where there
is proof of willful misconduct or fraud.
Considerations Regarding the Statute of Limitations
- California courts have uniformly held that the statute of limitation
is a harsh remedy which will be applied only in the clearest situations.
- Courts abhor the statute when it denies the plaintiffs their day in
court.
Tolling: Stopping Time From Running
- Discovery Rule: the statute of limitations begins to "run"
only when plaintiffs become aware of or discover.
(A) the damage to their property and
(B) the defendants negligence as a cause of the damage, or could have become
so aware through the exercise of reasonable diligence.
Leaf v. City of San Mateo, 104 Cal.App.3d398,408(1980)
(A) A developers promise to repair known defects can toll (interrupt)
the statute.
(B) If a developer actually undertakes repairs, the statute of limitations
is tolled while the repairs are attempted. Southern California Enterprises
v. Walter & Co., 78 Cal.App.2d.750,178P2d785(1974) * 11
Reasons Not to Sign Tolling Agreements:
1. Rarely works.
2. Causes delay in court proceedings. Does not put you in
line for trial date.
3. Typically only stops statute as to developer and homeowners
association, not general contractor, subcontractors, or
design professionals.
4. Prevents access to important information, e.g., insurance
policies from developer.
5. Does not include insurance companies for developer or
general contractor, i.e., no deep pockets.
6. Encourages builder to do temporary, not permanent repairs.
7. Lulls Board of Directors into false sense of security.
8. Does not address all defects, only those patent or apparent,
not latent.
9. Removes bargaining chip or leverage; better leverage
when clock is ticking under the fast track system.
10. Maintenance/temporary repair costs continue while trying
to "work it out."
11. No guarantee that following this agreement, wither party
will like the result, and you're back to square one.
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