Right To Repair Act

In California, we have Civil Code 896 et seq, also known as the Right To Repair Act. The Act requires a homeowner to give the builder a chance to repair before the homeowner can sue the developer for construction defects, assuming the developer complies with the Act (this is an entirely separate and lengthy discussion). Once the developer gets notice of the defects, he can inspect and make an offer to repair or settle.

If the developer offers to repair, he cannot get a relase from the homeowner. Thus, the homeowner can still sue the developer. In fact, the homeowner may have additional claims after the repairs have been made 1) original defects and 2) defective repair work.

If the developer offers a cash settlement instead of offering to make repairs, he can obtain a release, assuming the homeowner is willing to accept the cash offer.

In essence, there are pros and cons to both approaches. Repairs may be cheaper for the developer, but may not get you out of a lawsuit. Cash may be more expensive up front but, may get you out of a lawsuit.

I am attorney Robert A. Von Esch IV. I handle construction defect, contractor disputes, and real estate matters. If you need asssistance in these areas, please do not hesitate to contact me via www.voneschlaw.com.

No Insurance Coverage For Following The Plans?

I believe most contractors follow the plans they are given, unless, they discover a flaw or mistake in the plans. I believe most contractors and clients would characterize the job as a success if the plans were followed correctly. Interestingly enough, major insurance carriers are considering punishing both the contractor and consumer for good work.

I just attended an insurance industry conference, and major insurance coverage attorneys for the major carriers lectured about "intentional conduct." Intentional conduct is generally not covered. Thus, if you commit fraud or intentionally do something wrong, there is no insurance coverage for this act.

However, the insurance industry is seemingly taking this concept to a perverse level. Carriers are now discussing the following: if a contractor follows the plans but, there are still problems with the construction that render the project damaged (leaks, cracks, etc.), there may be no coverage. Why? The contractor followed the plans and intended to build the house as constructed thus, his intentional conduct should not be covered, even when unintended results arise, such as leaks, cracks, etc. In essence, contractors and consumers will be punished for following the plans, which before now, was considered the sign of a job well done.

This is an area of the law to keep an eye on!

I practice construction defect, real estate, and serious injury litigation. If you need assistance or have questions, please do not hesitate to contact me via www.voneschlaw.com

Adequate Insurance Coverage

I cannot emphasize the importance of making sure you (contractor) have adequate insurance coverage before you begin a construction project. Whether you are a sub or gc, take the time to assess primary and excess coverage and limits. Determine whether the policies are burning limits, work completed, wrap, and know the exclusions. Is coverage denied without a valid indemnity clause in the construction agreement? Are subsidence, mold, or sb 800 claims covered? Taking the time to address these issues at the onset can save you a lot of money and heartache. Call me for an insurance evaluation before your next project. I can be reached via www.voneschlaw.com.