"Until the roof actually leaks and the water's coming into your home, until the water is penetrating your window, or until a fire erupts and burns the building down, you are prevented from bringing a lawsuit."
Newport Beach Lawyer Thomas Miller, A Construction-Defect Litigation Pioneer
Courts - Homeowners are mired in struggle against builders over possible safety hazards.
December 9, 2001 - For three years, the Del Prado Homeowners' Association in Laguna Niguel has been trying to get the builder of 338 town homes there to install fire walls in the attics so a blaze in one unit can't easily spread to connected homes.
The homeowners' efforts were thwarted last December, however, when the state Supreme Court ruled in a landmark decision that homeowners can't sue builders for building-code violations unless actual damage has occurred. Because no fire has spread through an at attic in the development, the town-house owners say, they would have to cover the costs of having the fire walls installed - an estimated $1 million.
The Del Prado case was among 430 pending Orange County building-defect cases affected by the Supreme Court decision in Aas vs. Superior Court, court records show.
But in Sacramento, there is a move afoot to reverse the Aas decision. State Sen. Martha Escutia, D-Montebello, introduced SB355 in February. The bill stalled, but she plans to revive her fight next month.
"Until the roof actually leaks and the water's coming into your home, until the water is penetrating your window, or until a fire erupts and burns the building down, you are prevented from bringing a lawsuit," said Newport Beach lawyer Thomas Miller, one of the pioneers of construction-defect litigation.
Though lawyers say the number of lawsuits filed hasn't decreased since the decision, the value of resulting settlements and claims has gone down because homeowners associations have had to drop claims in which they didn't have evidence of damage.
The builders cheered the Aas decision and are expected to lobby heavily against Escutia's bill. "What the trial lawyers have tended to do in the past is file a laundry list of defects," said Kimberly Dellinger, legislative advocate for the California Building Industry Association. "There may be some legitimate problems in there" hidden by unsubstantiated claims, she said.
Litigation Boom Over Past Decade
Construction-defect litigation gained momentum in the early 1990's after thousands of condominiums were built in the 1980s, said Nick Cammarota, California Building,, Inndustry Association Attorney. Large-scope builders blame the boom in such litigation on trial lawyers trying to milk the monied building industry and the insurers that back it.
"As soon as a project approaches the seventh to 10th year of existence, most are being sued," said Chris Chambers, Orange County division president for Western Pacific Housing, the builder of Del Prado. "It's almost a foregone conclusion: You will be sued, regardless."
Builders say one of the reasons more-affordable housing units are not being built is because developer's see condominium projects as lawsuits waiting to happen.
Scott Clements, a private home inspector and past president of the California Real Estate Inspectors Association, said such lawsuits have proliferated partly because of ambitious lawyers but also as a result of lax oversight by the building industry and the inspectors who regulate it.
"By and large, the industry does a good job," Clements said. "Unfortunately, there's the lower-end developers that we need to have controls over. Unfortunately, (the Aas ous safety-code violations ruling) has taken that ability to control away."
Inspector Sees From Both Sides
One of the problems Clements said he sees is that portions of subdivisions may be subcontracted to crews unfamiliar with the blueprints. In spectors only need to look at 25 percent of the homes being built and could miss errors made by some of the more unscrupulous crews he said.
Of the new homes, Clements estimates that about 20 percent have serious structural defects such as improperly attached foundations or walls that could cause severe damage in an earthquake or strong winds. An additional 30 percent, he said, have defects that could cause "imminent" water damage, such as water leaking through the roof or windows in a storm or water being dumped. on walls by a sloped balcony.
The law holding builders liable for all defects up to 10 years after construction was narrowed when Alan Aas and co-owners in a San Diego subdivision sued builders The William Lyon Co. and Lyon Communities Inc. of Newport Beach over alleged problems such as improperly attached flashing that could result in window leaks, discolored drain stoppers and garbage disposals that didn't work.
The Superior Court ruled, and the Supreme Court agreed, that unless a defect caused damage, the builder isn't liable. In a dissenting statement, Chief justice Ron George called it absurd for homeowners to have to wait for damage to occur before being allowed to sue. He suggested the Legislature craft a law to allow homeowners to sue builders to correct serious safety code violations.
Escutia's amended bill would allow homeowners to sue for the cost to repair defects that would "pose a danger to the life, health, safety or property." The building industry is strongly resisting Escutia's bill, and its unclear how far it could go in the coming legislative session.
Laguna Niguel Homeowners' Case
The Del Prado Townhomes, on Via Moreno between Moulton and Crown Valley parkways, were completed in 1989. By the mid-1990s, residents were complaining that their roofs and windows leaked and that patios had started to pull away from the homes.
A private roofing contractor went out to look at the 423 units and determined that about half were missing the plywood layer of the roofing, meaning tar paper and shingles were stapled directly onto rafters, said homeowner John McDonald and Rachel Miller, a lawyer with Thomas Miller's firm. He also found that attic fire walls were missing in about 80 percent of the subdivision, they said.
But because of the Aas decsion, the group would likely get only enough money from the builder to cover reparation of leaks and the patios, McDonald said.
Chambers, the Western Pacific executive, said he could not comment on specific allegations because the matter is unresolved, but said, "We fully stand behind our product and are confident that whatever we are building is within industry standards and is not a threat."
Western Pacific constructed half the units, he said; the other half were built by a now-defunct company.
Unless the Del Prado association decides it wants to raise its $ 140-a-month dues, there are no funds to cover the fire walls, McDonald said.
"When I bought MY. house, I expected it to be built to code, and that included fire walls and fire stops;, so I didn't budget for them," McDonald said. "We could put them in, but when we bought it, they were supposed to be-in there. Why should I have to pay for it now?"
Q&A: Tips for dealing with home defects
Q. What Is a construction defect?
A. The law loosely defines a defect as anything that reduces the value of a home or condominium.
Defects cause anything from cracks in stucco to leaky roofs.
Homeowners trying to correct perceived defects may have a difficult time recovering damages unless cracks and leaks have already begun to damage their home.
The California Supreme Court established last year that homeowners can sue in court only for defects that cause physical damage cracked stucco or foundations, roof leaks or collapsed roofs.
Q. How can I determine If a defect really exists?
A. You will likely need to hire an expert who understands the building trade and can assess whether leaks and other damages are the result of a defect in construction.
Q. What does a builder Warranty cover?
A. Warranties are different. Read carefully to determine what is covered, what isn't, how long it lasts and what the builder will do to fix construction problems. According to The Miller Law Firm of Newport Beach, about 80 percent of common defects aren't covered.
Q. Where can I get help?
A. There are two avenues.
- The Contractors State Licensing Board, which regulates the state's 278,000 contractors.
You can file a grievance with the state if the value of present, or future damages is $5,000 to $50,000.
- A private attorney. Construction-defect attorneys may agree to work on a contingency basis and collect 28 to 38 percent of any settlement or award.
Find out more about construction defects or hiring a contractor at www.constructiondefects.com.
© Copyright 2008 The Miller Law Firm. All rights Reserved.
If you experience problems or have questions, contact us at Info@ConstructionDefects.com.
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