Procedure - Estates In Real Property - CA Civil Law

Section § 817

This law defines what a limited-equity housing cooperative or a workforce housing cooperative trust is. It outlines the requirements, such as being organized as a nonprofit or holding property titles under certain conditions. The articles of incorporation or bylaws must control the sale and purchase of memberships and stocks, keeping prices within limits, and must allow the housing cooperative to use its 'corporate equity' for improvements, acquisitions, or public purposes. A significant member vote is needed to change the rules in the bylaws or articles of incorporation.

“Limited-equity housing cooperative” or a “workforce housing cooperative trust” means a corporation organized on a cooperative basis that, in addition to complying with Section 817.1 as may be applicable, meets all of the following requirements:

(a) The corporation is any of the following:

(1) Organized as a nonprofit public benefit corporation pursuant to Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code.

(2) Holds title to real property as the beneficiary of a trust providing for distribution for public or charitable purposes upon termination of the trust.

(3) Holds title to real property subject to conditions that will result in reversion to a public or charitable entity upon dissolution of the corporation.

(4) Holds a leasehold interest, of at least 20 years’ duration, conditioned on the corporation’s continued qualification under this section, and provides for reversion to a public entity or charitable corporation.

(b)

(1) The articles of incorporation or bylaws require the purchase and sale of the stock or membership interest of resident owners who cease to be permanent residents, at no more than a transfer value determined as provided in the articles or bylaws, and that shall not exceed the aggregate of the following:

(A) The consideration paid for the membership or shares by the first occupant of the unit involved, as shown on the books of the corporation.

(B) The value, as determined by the board of directors of the corporation, of any improvements installed at the expense of the member or a prior member with the prior approval of the board of directors.

(C) Accumulated simple interest, an inflation allowance at a rate that may be based on a cost-of-living index, an income index, or market-interest index, or compound interest if specified in the articles of incorporation or bylaws. For newly formed corporations, accumulated simple interest shall apply. Any increment pursuant to this paragraph shall not exceed a 10-percent annual increase on the consideration paid for the membership or share by the first occupant of the unit involved.

(2)

(A) Except as provided in subparagraph (B), for purposes of a return of transfer value, both of the following are prohibited:

(i) A board of directors returning transfer value, either full or partial, to a member while he or she still remains a member.

(ii) An existing member accepting the return of his or her transfer value, either full or partial.

(B) A board of directors may return to an existing member and the existing member may accept return of his or her transfer value in the event that the member moves within the cooperative from a category of unit initially valued at a higher price to a different category of unit valued at a lower price.

(c) The articles of incorporation or bylaws require the board of directors to sell the stock or membership interest purchased as provided in subdivision (b) to new member-occupants or resident shareholders at a price that does not exceed the “transfer value” paid for the unit.

(d) The “corporate equity,” that is defined as the excess of the current fair market value of the corporation’s real property over the sum of the current transfer values of all shares or membership interests, reduced by the principal balance of outstanding encumbrances upon the corporate real property as a whole, shall be applied as follows:

(1) So long as any such encumbrance remains outstanding, the corporate equity shall not be used for distribution to members, but only for the following purposes, and only to the extent authorized by the board, subject to the provisions and limitations of the articles of incorporation and bylaws:

(A) For the benefit of the corporation or the improvement of the real property.

(B) For expansion of the corporation by acquisition of additional real property.

(2) Upon sale of the property, dissolution of the corporation, or occurrence of a condition requiring termination of the trust or reversion of title to the real property, the corporate equity is required by the articles, bylaws, or trust or title conditions to be paid out, or title to the property transferred, subject to outstanding encumbrances and liens, for the transfer value of membership interests or shares, for use for a public or charitable purpose.

(e) Amendment of the bylaws and articles of incorporation requires the affirmative vote of at least two-thirds of the resident-owner members or shareholders.

limited-equity housing cooperative workforce housing cooperative trust nonprofit corporation requirements real property title bylaws purchase and sale transfer value restrictions corporate equity use public benefit purposes charitable purposes board of directors membership interests amendment requirements resident-owner members shareholders rights property trust conditions

(Added by Stats. 2009, Ch. 520, Sec. 2. (AB 1246) Effective January 1, 2010.)

Section § 817.1

This section explains what a "workforce housing cooperative trust" is and how it should be set up and run. The board of this trust has two types of members: those elected by residents and those appointed by sponsor organizations like businesses or nonprofits. Resident-elected members must have the majority. At first, only sponsor members are on the board, but residents start electing members after one year of living there; they take the majority by the third year. Sponsor-appointed members can only be removed for specific reasons. The trust can issue special shares to sponsors with limited returns. To change the trust’s rules, most resident members and board members must agree. The trust can operate in different places and either own or lease land to create affordable housing. It can also be formed if most residents in a foreclosed property support an effort to buy it.

(a) A “workforce housing cooperative trust” is an entity organized pursuant to this section that complies with Section 817 and with all of the following:

(1) Allows the governing board to be composed of two classes of board members. One class is elected by the residents, and one class is appointed by sponsor organizations, including employer and employee organizations, chambers of commerce, government entities, unions, religious organizations, nonprofit organizations, cooperative organizations, and other forms of organizations. Resident members shall elect a majority of the board members. However, sponsor organizations may appoint up to one less than a majority of the board members. The numerical composition and class of the sponsor and resident board members shall be set in the articles of incorporation and in the bylaws.

(2) Requires the charter board of a workforce housing cooperative trust to be composed of only sponsor board members, to remain in place for one year after the first resident occupancy. One year after the first resident occupancy, the resident members shall elect a single board member. Three years after the first resident occupancy, resident members shall elect a majority of the board members.

(3) Prohibits the removal of the appointees of sponsor organizations, except for cause.

(4) Allows for the issuance of separate classes of shares to sponsor organizations or support organizations. These shares shall be denominated as “workforce housing shares” and shall receive a rate of return of no more than 10 percent simple interest pursuant to subparagraph (C) of paragraph (1) of subdivision (b) of Section 817.

(5) Requires, in order to amend the bylaws or articles of incorporation of a workforce housing cooperative trust, the affirmative vote of at least a majority of the resident-owner members or shareholders and a majority of each class of board members. The rights of the sponsor board members or the sponsors shall not be changed without the affirmative vote of two-thirds of the sponsor board members.

(b) A workforce housing cooperative trust shall be entitled to operate at multiple locations in order to sponsor limited-equity housing cooperatives. A workforce housing cooperative trust may either own or lease land for the purpose of developing limited-equity housing cooperatives.

(c) A workforce housing cooperative trust may be created when at least 51 percent of the occupied units in a multifamily property that is in foreclosure support efforts to buy the building or property.

workforce housing cooperative trust governing board composition resident-elected members sponsor organizations limited-equity housing cooperatives board member classes foreclosure purchases shareholder voting rights board member removal workforce housing shares bylaws amendment multifamily property housing development real estate ownership resident occupancy timeline

(Added by Stats. 2009, Ch. 520, Sec. 2. (AB 1246) Effective January 1, 2010.)

Section § 817.2

This law outlines the steps for dissolving a limited-equity housing cooperative or workforce housing cooperative trust that received public funding. First, the local city or county must hold a public hearing, which the cooperative pays for. Next, notice of the hearing must be given 120 days in advance to interested parties, including nearby cooperatives, to explore potential mergers. If a merger is possible, it should happen with the closest cooperative. If no merger happens, the local authorities must approve the dissolution plan to ensure it's legal and fair, forwarding all information to the Attorney General for review.

The procedure for the dissolution of a limited-equity housing cooperative or workforce housing cooperative trust that receives or has received a public subsidy shall be as follows:

(a) The city, or the county for any unincorporated area, in which the limited-equity housing cooperative or workforce housing cooperative trust is located, shall hold a public hearing. The cooperative or trust shall pay for all costs associated with the public hearing.

(b) The city or county shall provide notice to all interested parties. The notice shall be given at least 120 days prior to the date of the hearing. The city or county shall obtain a list of all other limited-equity housing cooperatives and cooperative development organizations in the state from the California Center for Cooperative Development, if the list exists, and provide notice to all of the entities on the list in an effort to create a merger with an existing limited-equity housing cooperative or workforce housing cooperative trust. The notice shall be mailed first class, postage prepaid, in the United States mail.

(c) If the dissolving limited-equity housing cooperative or workforce housing cooperative trust merges with an existing cooperative or trust, to the extent possible, the merger shall be with the geographically closest cooperative or trust.

(d) If the dissolving limited-equity housing cooperative or workforce housing cooperative trust does not merge with an existing cooperative or trust, both of the following shall occur:

(1) Upon completion of the public hearing required pursuant to subdivision (a), the city or county shall adopt a resolution approving of the dissolution and make a finding that the dissolution plan meets the requirements of state and federal law, meets the donative intent standards of the United States Internal Revenue Service, and is free of private inurement, which includes, but is not limited to, a prohibition on any member receiving any payment in excess of the transfer value to which he or she is entitled pursuant to subdivision (b) of Section 817.

(2) The city or county shall forward all of the information and written testimony from the hearing to the Office of the Attorney General for the Attorney General to consider as part of his or her ruling on the dissolution.

limited-equity housing cooperative workforce housing cooperative trust public subsidy public hearing notice requirements merger geographically closest dissolution resolution donative intent private inurement transfer value hearing testimony Attorney General review

(Added by Stats. 2009, Ch. 520, Sec. 2. (AB 1246) Effective January 1, 2010.)

Section § 817.3

This law states that any organization that is listed as a sponsor for a workforce housing cooperative trust automatically becomes a member of that trust, unless the organization chooses to withdraw its sponsorship by providing written notice.

Each entity named as a sponsor organization of a workforce housing cooperative trust formed pursuant to Section 817 shall have the legal standing of a member unless it revokes, in writing, its sponsorship.

workforce housing cooperative trust sponsor organization membership status legal standing written revocation trust membership cooperative trust participation organizational sponsorship housing cooperative sponsor revocation entity member status sponsorship withdrawal written notice requirement cooperative trust sponsor

(Added by Stats. 2009, Ch. 520, Sec. 2. (AB 1246) Effective January 1, 2010.)

Section § 817.4

This law states that if someone sues a board of directors for not doing their job properly or breaking rules, and they win, the person who sued can get their legal fees paid. Also, if an organization that uses public money tries to stop following the rules or dissolve in a way that benefits its members unfairly, they can’t use their corporate funds to make that happen.

(a) In any action instituted on or after January 1, 2010, against a board of directors and its members based upon a breach of corporate or fiduciary duties or a failure to comply with the requirements of this chapter, a prevailing plaintiff may recover reasonable attorney’s fees and costs.

(b) If an organization formed under this chapter uses public funds, it shall not use any corporate funds to avoid compliance with this chapter or to pursue dissolution if the intent or outcome is for some or all of the members to receive any payment in excess of the transfer value to which he or she is entitled pursuant to subdivision (b) of Section 817.

breach of corporate duties fiduciary duties prevailing plaintiff attorney’s fees public funds corporate compliance dissolution restrictions member payment transfer value boards of directors legal costs recovery corporate funds misuse corporate governance nonprofit organizations plaintiff rights

(Added by Stats. 2009, Ch. 520, Sec. 2. (AB 1246) Effective January 1, 2010.)

Section § 885.010

This section explains what a 'power of termination' is in property law. It's a right to end someone's ownership of property if they break certain conditions. This right can be called many things, such as 'right of entry' or 'right of reentry', but they all mean the same thing here. The section also says that having this power is considered an interest in the property. Lastly, when this law talks about terms like 'right of repossession', it means the power to take back property after conditions aren't met.

(a) As used in this chapter:

(1) “Power of termination” means the power to terminate a fee simple estate in real property to enforce a restriction in the form of a condition subsequent to which the fee simple estate is subject, whether the power is characterized in the instrument that creates or evidences it as a power of termination, right of entry or reentry, right of possession or repossession, reserved power of revocation, or otherwise, and includes a possibility of reverter that is deemed to be and is enforceable as a power of termination pursuant to Section 885.020.

(2) “Power of termination” includes the power created in a transferee to terminate a fee simple estate in real property to enforce a restriction on the use of the real property in the form of a limitation or condition subsequent to which the fee simple estate is subject, whether the power is characterized in the instrument that creates or evidences it as an executory interest, executory limitation, or otherwise, and includes the interest known at common law as an executory interest preceded by a fee simple determinable.

(b) A power of termination is an interest in the real property.

(c) For the purpose of applying this chapter to other statutes relating to powers of termination, the terms “right of reentry,” “right of repossession for breach of condition subsequent,” and comparable terms used in the other statutes mean “power of termination” as defined in this section.

power of termination fee simple estate real property condition subsequent right of entry possibility of reverter executory interest covenants property restrictions legal interest right of reentry breach of condition real estate law use restriction revocation power

(Amended by Stats. 1991, Ch. 156, Sec. 15.)

Section § 885.015

This law section states that certain rules do not apply when it comes to ending certain property interests. Specifically, it doesn't cover situations where the right to end an interest is based on whether oil, gas, or other minerals are continuously produced or removed, or if it concerns improvements or fixtures on the land that are owned separately and depend on maintaining a lease or other property interest.

This chapter does not apply to any of the following:

(a) A power of termination conditioned upon the continued production or removal of oil or gas or other minerals.

(b) A power of termination as to separately owned improvements or fixtures conditioned upon the continued leasehold or possessory interest in the underlying land.

power of termination oil production gas extraction mineral rights continued production removal of minerals separately owned improvements fixtures leasehold interest possessory interest underlying land property interest termination lease continuation real property land use conditions

(Amended by Stats. 1991, Ch. 156, Sec. 16.)

Section § 885.020

This law eliminates the old property interests called 'fees simple determinable' and 'possibilities of reverter.' Instead, these are now called 'fee simple subject to a condition subsequent' and 'power of termination,' respectively. This means that property ownership is more stable and clear, with conditions on losing property rights handled more consistently.

Fees simple determinable and possibilities of reverter are abolished. Every estate that would be at common law a fee simple determinable is deemed to be a fee simple subject to a restriction in the form of a condition subsequent. Every interest that would be at common law a possibility of reverter is deemed to be and is enforceable as a power of termination.

fees simple determinable possibilities of reverter fee simple subject to a condition subsequent power of termination property ownership property rights common law estate restriction condition subsequent property interest enforceable real estate law property conditions stability in ownership

(Added by Stats. 1982, Ch. 1268, Sec. 1.)

Section § 885.030

In California, the right to cancel a land deal or agreement, known as a 'power of termination,' generally expires after 30 years. This time limit depends on when a document showing you have this right is recorded. If you file a notice saying you want to keep this power, it also lets the power last another 30 years. This rule stands even if a document says otherwise, unless that document sets an earlier end date.

(a) A power of termination of record expires at the later of the following times:

(1) Thirty years after the date the instrument reserving, transferring, or otherwise evidencing the power of termination is recorded.

(2) Thirty years after the date a notice of intent to preserve the power of termination is recorded, if the notice is recorded within the time prescribed in paragraph (1).

(3) Thirty years after the date an instrument reserving, transferring, or otherwise evidencing the power of termination or a notice of intent to preserve the power of termination is recorded, if the instrument or notice is recorded within 30 years after the date such an instrument or notice was last recorded.

(b) This section applies notwithstanding any provision to the contrary in the instrument reserving, transferring, or otherwise evidencing the power of termination or in another recorded document unless the instrument or other recorded document provides an earlier expiration date.

power of termination land deal cancellation expiration date notice of intent reservation of rights transfer of rights recorded instrument 30-year limit land agreements real estate termination document recording

(Added by Stats. 1982, Ch. 1268, Sec. 1.)

Section § 885.040

This law explains when a 'power of termination' becomes obsolete and therefore expires. A power of termination allows someone to reclaim property if certain conditions are not met. The power is considered obsolete if it no longer benefits its holder, doesn't fulfill its intended purpose, or if enforcing it would be unfair due to changed circumstances. However, this power doesn't expire during the grantor's lifetime if it's from a gift to a public entity or tax-exempt organization without payment.

(a) If a power of termination becomes obsolete, the power expires.

(b) As used in this section, a power of termination is obsolete if any of the following circumstances applies:

(1) The restriction to which the fee simple estate is subject is of no actual and substantial benefit to the holder of the power.

(2) Enforcement of the power would not effectuate the purpose of the restriction to which the fee simple estate is subject.

(3) It would be otherwise inequitable to enforce the power because of changed conditions or circumstances.

(c) No power of termination shall expire under this section during the life of the grantor if it arises from a grant by a natural person without consideration to a public entity or to a society, corporation, institution, or association exempt by the laws of this state from taxation.

power of termination fee simple estate actual substantial benefit enforcement purpose of restriction inequitable enforcement changed conditions grantor natural person grant public entity tax-exempt organization without consideration expire obsolescence of power conditions or circumstances

(Added by Stats. 1982, Ch. 1268, Sec. 1.)

Section § 885.050

This law says that if you have a 'power of termination'—which is the right to take back property when certain rules are broken—you must act on it through a notice or a lawsuit. If this power is officially recorded, then your action to exercise it must also be recorded. You only have five years to take action after the rule is broken, unless you and the other party agree to give you more time, but this agreement must be recorded before the five years are up.

A power of termination shall be exercised only by notice or by civil action and, if the power of termination is of record, the exercise shall be of record. The notice shall be given, and any civil action shall be commenced, within five years after breach of the restriction to which the fee simple estate is subject, or such longer period as may be agreed to by the parties by a waiver or extension recorded before expiration of that period.

power of termination notice civil action exercise of record restriction breach fee simple estate five-year limit waiver extension recorded agreement property rights legal action timing real estate law restriction enforcement property reversion

(Added by Stats. 1982, Ch. 1268, Sec. 1.)

Section § 885.060

This law section explains that when a power of termination (a right to end an interest in property) expires, it can't be enforced anymore, just like if it had been officially terminated or handed back to the property owner. You don't need to file any paperwork to prove the power ended. When such a power expires, any restrictions linked to the property also end, and you can't enforce those restrictions through lawsuits or any other legal action. However, if a restriction is also an equitable servitude (a type of rule or limitation on property use) that can be enforced by court order, it remains enforceable except by power of termination. This section doesn't change existing law but clarifies it, and it doesn't make any prohibited restrictions enforceable.

(a) Expiration of a power of termination pursuant to this chapter makes the power unenforceable and is equivalent for all purposes to a termination of the power of record and a quitclaim of the power to the owner of the fee simple estate, and execution and recording of a termination and quitclaim is not necessary to terminate or evidence the termination of the power.

(b) Expiration of a power of termination pursuant to this chapter terminates the restriction to which the fee simple estate is subject and makes the restriction unenforceable by any other means, including, but not limited to, injunction and damages.

(c) However, subdivision (b) does not apply to a restriction for which a power of termination has expired under this chapter if the restriction is also an equitable servitude alternatively enforceable by injunction. Such an equitable servitude shall remain enforceable by injunction and any other available remedies, but shall not be enforceable by a power of termination. This subdivision does not constitute a change in, but is declaratory of, the existing law. However, nothing in this subdivision shall be construed to make enforceable any restriction prohibited or made unenforceable by other provisions of law, including Section 53.

power of termination unenforceable quitclaim fee simple estate restrictive covenants equitable servitude injunctions property law legal remedies record termination enforceable by injunction property restrictions Section 53 damages existing law

(Amended by Stats. 1990, Ch. 1114, Sec. 1.)

Section § 885.070

This law applies to powers of termination related to property, regardless of whether they were set up before, on, or after the law's start date. If a property's restriction was violated before the law's start date and the power to end ownership wasn't used before then, it must still be exercised by the earlier of these two options: the deadline under old law rules or within five years from when the law started. "Operative date" refers to when this law or any amendments to it took effect.

(a) Subject to Section 880.370 (grace period for recording notice) and except as otherwise provided in this section, this chapter applies on the operative date to all powers of termination, whether executed or recorded before, on, or after the operative date.

(b) If breach of the restriction to which the fee simple estate is subject occurred before the operative date of this chapter and the power of termination is not exercised before the operative date of this chapter, the power of termination shall be exercised, or in the case of a power of termination of record, exercised of record, within the earlier of the following times:

(1) The time that would be applicable pursuant to the law in effect immediately prior to the operative date of this chapter.

(2) Five years after the operative date of this chapter.

(c) As used in this section, “operative date” means the operative date of this chapter as enacted or, with respect to any amendment of a section of this chapter, the operative date of the amendment.

powers of termination fee simple estate operative date breach of restriction property ownership law amendment exercise of power recording notice real estate terms property law timeline

(Amended by Stats. 1991, Ch. 156, Sec. 17.)

Section § 941

This law limits the time you have to sue for issues related to a construction project or improvement. You generally have 10 years from when the project is mostly done, but it can't be later than the official completion notice. Suing for indemnity (asking someone else to cover damages) is also covered by this limit, unless you're filing a cross-complaint. However, if you own or control the property and a problem causes an issue, this time limit doesn't protect you from being sued. There are special rules about how repairs might affect these deadlines, especially if a builder arranges repairs, but simply fixing something doesn't usually give you more time to file a lawsuit. Certain other legal cases or claims about contracts are not restricted by these time limits.

(a) Except as specifically set forth in this title, no action may be brought to recover under this title more than 10 years after substantial completion of the improvement but not later than the date of recordation of a valid notice of completion.

(b) As used in this section, “action” includes an action for indemnity brought against a person arising out of that person’s performance or furnishing of services or materials referred to in this title, except that a cross-complaint for indemnity may be filed pursuant to subdivision (b) of Section 428.10 of the Code of Civil Procedure in an action which has been brought within the time period set forth in subdivision (a).

(c) The limitation prescribed by this section may not be asserted by way of defense by any person in actual possession or the control, as owner, tenant or otherwise, of such an improvement, at the time any deficiency in the improvement constitutes the proximate cause for which it is proposed to make a claim or bring an action.

(d) Sections 337.15 and 337.1 of the Code of Civil Procedure do not apply to actions under this title.

(e) Existing statutory and decisional law regarding tolling of the statute of limitations shall apply to the time periods for filing an action or making a claim under this title, except that repairs made pursuant to Chapter 4 (commencing with Section 910), with the exception of the tolling provision contained in Section 927, do not extend the period for filing an action, or restart the time limitations contained in subdivision (a) or (b) of Section 7091 of the Business and Professions Code. If a builder arranges for a contractor to perform a repair pursuant to Chapter 4 (commencing with Section 910), as to the builder the time period for calculating the statute of limitation in subdivision (a) or (b) of Section 7091 of the Business and Professions Code shall pertain to the substantial completion of the original construction and not to the date of repairs under this title. The time limitations established by this title do not apply to any action by a claimant for a contract or express contractual provision. Causes of action and damages to which this chapter does not apply are not limited by this section.

construction defect claims indemnity actions statute of limitations substantial completion tolling provisions cross-complaint builder repair exceptions valid notice of completion Code of Civil Procedure Chapter 4 repairs contractual claims possession or control time period limitation exceptions Business and Professions Code Section 7091 claims for construction deficiencies

(Amended by Stats. 2003, Ch. 762, Sec. 7. Effective January 1, 2004.)

Section § 942

If a homeowner wants to claim that their home doesn't meet certain building standards, they only need to show that the home doesn't meet those standards. They don't need to prove what caused the problem or show any damages, as long as the issue is related to the original construction. However, there are some defenses that the builder can use against these claims.

In order to make a claim for violation of the standards set forth in Chapter 2 (commencing with Section 896), a homeowner need only demonstrate, in accordance with the applicable evidentiary standard, that the home does not meet the applicable standard, subject to the affirmative defenses set forth in Section 945.5. No further showing of causation or damages is required to meet the burden of proof regarding a violation of a standard set forth in Chapter 2 (commencing with Section 896), provided that the violation arises out of, pertains to, or is related to, the original construction.

homeowner claim building standards original construction evidentiary standard affirmative defenses Section 896 Section 945.5 burden of proof construction violations causation

(Added by Stats. 2003, Ch. 762, Sec. 9. Effective January 1, 2004.)

Section § 943

This section limits the types of legal claims you can bring regarding certain issues with homes, specifically new construction defects. Generally, you can't bring additional claims for the same issues covered by another specific law. However, if you have separate claims like a personal injury or fraud, those are still allowed. For owners of single-family homes, if there's a construction defect, they're entitled to the lower amount between the cost of fixing the problem or how much the home's value has dropped because of it. There are some exceptions for personal use.

(a) Except as provided in this title, no other cause of action for a claim covered by this title or for damages recoverable under Section 944 is allowed. In addition to the rights under this title, this title does not apply to any action by a claimant to enforce a contract or express contractual provision, or any action for fraud, personal injury, or violation of a statute. Damages awarded for the items set forth in Section 944 in such other cause of action shall be reduced by the amounts recovered pursuant to Section 944 for violation of the standards set forth in this title.

(b) As to any claims involving a detached single-family home, the homeowner’s right to the reasonable value of repairing any nonconformity is limited to the repair costs, or the diminution in current value of the home caused by the nonconformity, whichever is less, subject to the personal use exception as developed under common law.

construction defects single-family home repair costs diminution in value personal injury fraud claims contract enforcement nonconformity damages recovery homeowners' rights personal use exception

(Added by renumbering Section 942 by Stats. 2003, Ch. 762, Sec. 8. Effective January 1, 2004.)

Section § 944

If you're a homeowner with a claim for damages related to construction defects, you can recover costs for repairs due to these issues. This includes fixing any violations of construction standards, and any further damage caused during this repair process. It also covers any costs from improper repairs, the need to temporarily move or store items, and any lost income if you run a business from your home. Additionally, you can get back investigative costs and any other fees you are entitled to by contract or law.

If a claim for damages is made under this title, the homeowner is only entitled to damages for the reasonable value of repairing any violation of the standards set forth in this title, the reasonable cost of repairing any damages caused by the repair efforts, the reasonable cost of repairing and rectifying any damages resulting from the failure of the home to meet the standards, the reasonable cost of removing and replacing any improper repair by the builder, reasonable relocation and storage expenses, lost business income if the home was used as a principal place of a business licensed to be operated from the home, reasonable investigative costs for each established violation, and all other costs or fees recoverable by contract or statute.

homeowner damages construction defects repair costs violation of standards improper repair relocation expenses storage expenses lost business income investigative costs repair efforts contractual fees statutory fees principal place of business reasonable value rectifying damages

(Added by Stats. 2002, Ch. 722, Sec. 3. Effective January 1, 2003.)

Section § 945

This law section states that all the rules and rights in this title apply to both the original buyers and anyone who comes after them. It also clarifies that certain associations and others, as mentioned in specific sections, are treated like original buyers and have the authority to enforce these rules and rights.

The provisions, standards, rights, and obligations set forth in this title are binding upon all original purchasers and their successors-in-interest. For purposes of this title, associations and others having the rights set forth in Sections 5980 and 5985 shall be considered to be original purchasers and shall have standing to enforce the provisions, standards, rights, and obligations set forth in this title.

original purchasers successors-in-interest associations rights enforcement standards binding provisions Section 5980 Section 5985 standing obligations buyers successors legal rights

(Amended by Stats. 2018, Ch. 92, Sec. 34. (SB 1289) Effective January 1, 2019.)

Section § 945.5

This law explains that builders and related professionals can be excused from liability if they can prove certain defenses for a construction-related problem. These defenses include issues caused by unexpected natural events, such as severe weather or earthquakes, that exceed code standards. Also, if a homeowner unreasonably fails to address or prevent damage, ignores maintenance advice they were given in writing, or the defect arises from their own alterations or misuse of the property, the builder might not be liable. Additionally, if the claim is too late, involves a valid release, or has been fixed appropriately by the builder, these are all acceptable defenses. Finally, other general defenses not covered by this specific statute still remain valid.

A builder, general contractor, subcontractor, material supplier, individual product manufacturer, or design professional, under the principles of comparative fault pertaining to affirmative defenses, may be excused, in whole or in part, from any obligation, damage, loss, or liability if the builder, general contractor, subcontractor, material supplier, individual product manufacturer, or design professional, can demonstrate any of the following affirmative defenses in response to a claimed violation:

(a) To the extent it is caused by an unforeseen act of nature which caused the structure not to meet the standard. For purposes of this section an “unforeseen act of nature” means a weather condition, earthquake, or manmade event such as war, terrorism, or vandalism, in excess of the design criteria expressed by the applicable building codes, regulations, and ordinances in effect at the time of original construction.

(b) To the extent it is caused by a homeowner’s unreasonable failure to minimize or prevent those damages in a timely manner, including the failure of the homeowner to allow reasonable and timely access for inspections and repairs under this title. This includes the failure to give timely notice to the builder after discovery of a violation, but does not include damages due to the untimely or inadequate response of a builder to the homeowner’s claim.

(c) To the extent it is caused by the homeowner or his or her agent, employee, general contractor, subcontractor, independent contractor, or consultant by virtue of their failure to follow the builder’s or manufacturer’s recommendations, or commonly accepted homeowner maintenance obligations. In order to rely upon this defense as it relates to a builder’s recommended maintenance schedule, the builder shall show that the homeowner had written notice of these schedules and recommendations and that the recommendations and schedules were reasonable at the time they were issued.

(d) To the extent it is caused by the homeowner or his or her agent’s or an independent third party’s alterations, ordinary wear and tear, misuse, abuse, or neglect, or by the structure’s use for something other than its intended purpose.

(e) To the extent that the time period for filing actions bars the claimed violation.

(f) As to a particular violation for which the builder has obtained a valid release.

(g) To the extent that the builder’s repair was successful in correcting the particular violation of the applicable standard.

(h) As to any causes of action to which this statute does not apply, all applicable affirmative defenses are preserved.

comparative fault affirmative defenses unforeseen act of nature earthquake homeowner's failure maintenance obligations written notice alterations ordinary wear and tear neglect intended purpose time period for filing valid release successful repair applicable standard

(Amended by Stats. 2003, Ch. 762, Sec. 10. Effective January 1, 2004.)

Struggling to fill out your Divorce Forms?

Estates In Real Property

Chapter 5Procedure

Section § 817

Section § 817.1

Section § 817.2

Section § 817.3

Section § 817.4

Section § 885.010

Section § 885.015

Section § 885.020

Section § 885.030

Section § 885.040

Section § 885.050

Section § 885.060

Section § 885.070

Section § 941

Section § 942

Section § 943

Section § 944

Section § 945

Section § 945.5

Struggling to fill out your Divorce Forms?

COMPANY

WHAT YOU CAN DO

RESOURCES

FOLLOW US

ARTICLES