In California, homeowner association board members’ duties include properly handling potential construction defect claims.
Civil Code Section 1365 (f) (1) provides that the scope of duties of a director includes the decision to conduct an investigation of the common area for latent defects prior to the expiration of the statute of limitations. The Board’s decision whether to investigate defects is one that the Board should make after exercising reasonable inquiry as required by Corporations Code Section 7231 (a) and relying on the advice of consultants such as architects and engineers, as well as legal counsel, as set forth in Corporations Code 7321(b).
Adhering to these responsibilities used to be much easier for board members. Before the passing of Civil Code Section 895 et seq, (commonly known as SB 800), a Board had 10 years from completion of the project to bring a construction defect lawsuit against the builder (period was tolled while builder controlled the Board). If the Board waited more than 10 years, the association generally lost its right to recover. This sometimes resulted in a Board having to levy large special assessments against its members to repair defects.
Now, Board members’ duties are much more complex because there are different statutes of limitations for different defects. For example, a drainage and irrigation defect has a different statute of limitation (one year) than a plumbing or driveway defect (four years). Board members often have to confront defect issues immediately upon joining a Board.
Both SB 800 and Calderon (Civil Code 1375, et seq,) provide an important process allowing the Board to stop (toll) the clock from running, while investigating potential construction defects without actually filing a lawsuit. Calderon provides for a six-month tolling of the statute of limitations while evaluating a potential defect case. SB 800 permits the tolling of the statute while the builder considers making a repair. This can often take several months.
Civil Code Section 1375, et seq. does not permit the Board of Directors to delegate the decision of whether to file or not file a lawsuit to the association members. This is the responsibility of the Board of Directors as set forth in Civil Code Section 1365.7.
Have a defect? Not sure? Don’t wait! Our law firm can help you figure out if you have a case, whether you’re a homeowner or association. We will represent you in a construction defect litigation. We are a San Diego-based law firm but also work with clients in Los Angeles, Orange County, Riverside, San Bernardino counties.
To contact us, call 844-492-7474 or visit our San Diego construction defect contact page.
To learn more about California construction defects and the process, click our construction defect litigation page
