Contractors Dismayed by Decision Expanding Right to Repair Act

The California Court of Appeal, Fourth Appellate District, held that California’s Right to Repair Act, Civil Code section 895, et seq., does not provide the exclusive remedy for homeowners when alleged construction defects have resulted in actual damage.

The Aug. 28 decision in Liberty Mutual Insurance Company v. Brookfield Crystal Cove, LLC involved a 2008 pipe failure in a sprinkler system at a newly constructed home.  While the builder (Brookfield) performed repairs and remediation at the property, the homeowner’s insurance company (Liberty Mutual) paid for the homeowner’s relocation expenses.  In 2011, Liberty Mutual filed a subrogation lawsuit against Brookfield to recover those expenses.

The Right to Repair Act had been expected to limit a contractor’s exposure for construction defects and procedural remedies. Liberty Mutual’s claim would have been time-barred under the Act. However, because its insured sustained consequential damages, Liberty Mutual had the right to pursue them outside the Act’s limitations. As the court noted, other remedies available to homeowners continue to exist.

Image courtesy of Flickr by Kansas City District U.S. Army Corps of Engineers