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July 2012

California : Builder Beware of Opting Out Statutory Pre-Litigation Procedures

Baeza v. Superior Court (2011) 201 Cal.App.4th 1214

A builder who opts out of the non-adversarial statutory pre-litigation procedures of Civ. Code, §§ 910-938, in favor of its own contractual procedures opts out of the entirety of §§ 910-938, and the disclosure provisions of Civ. Code, § 912, do not apply to such a builder.

§ 910 sets out pre-litigation procedures that a claimant must follow before initiating an action for construction defect.  § 912 sets out pre-litigation disclosure requirements that a builder must comply with.  If a builder fails to do so, the claimant is not bound by the pre-litigation procedures.  However, § 914 allows for a builder to opt out of the non-adversarial statutory pre-litigation procedures in favor of its own contractual pre-litigation procedures.  In Baeza, homeowners sued the developer of several homes claiming construction defects but failed to comply with the § 910 pre-litigation procedures, arguing that the procedures were excused based on the developer’s failure to comply with § 912’s disclosure requirements. 

The appellate court held that when a builder opts out of the non-adversarial pre-litigation procedures of §§ 910-938, it opts out of the non-adversarial pre-litigation statute entirely, including the disclosure requirements of § 912.  Thus, because the homeowners’ failure to comply with the pre-litigation procedures were not excused by the developer’s failure to make the statutory disclosures, the homeowners were required to first comply with the pre-litigation procedures before initiating the civil suit. 

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