Defect liability
Two entirely different bodies of law govern construction defect claims in California, and the first job in any defect matter is working out which one applies. The Right to Repair Act, Civil Code sections 895 through 945.5, governs new residential construction within its scope and supplies its own standards, its own prelitigation procedure, and its own remedies. Everything outside that scope runs on common law, where duty and the economic loss rule do the work. A defense built on the wrong framework is not a weak defense — it is an answer to a different case. This hub, reviewed by Jayson R. Elliott, maps both and routes to the detailed guides.
The Right to Repair Act applies to new residential construction — single-family homes, townhomes, and condominiums — where the original close of escrow occurred on or after January 1, 2003. It does not apply to commercial construction, and it does not apply to condominium conversions.
Three facts therefore decide the framework before anything substantive is discussed: what kind of building it is, when the original close of escrow occurred, and whether the defendant is a builder within the Act or a contractor outside it. A contractor who assumes the answer, or who inherits an assumption from the other side’s demand letter, can spend months defending the wrong case.
The threshold facts Building type: new residential — single-family, townhome, condominium. Not commercial. Not condominium conversions. Timing: original close of escrow on or after January 1, 2003. Role: builder within the Act, or hired contractor outside it — a separate analysis covered on its own guide. Get these three settled before building a defense. They select the entire body of law that follows.
This is the Act’s most consequential feature for a defendant. The Act sets building standards, and within its scope a violation of those standards is actionable without any requirement that the defect have caused damage to other property or personal injury. The standards define the wrong.
Outside the Act the position is different: under Aas v. Superior Court (2000) 24 Cal.4th 627, negligence recovery is unavailable for construction defects that have not caused actual property damage or personal injury. The Act was enacted to override that result for new residential construction. So the same physical condition — a code violation that has not yet broken anything — can be a live claim inside the Act and a non-starter outside it.
The Act sets out a prelitigation notice-and-repair procedure at Civil Code sections 910 through 938. It is usually described from the homeowner’s side as a hurdle before filing suit. From the builder’s side it is something else: a statutory opportunity to inspect and to repair before litigation begins, which a contractor facing a common-law claim does not get.
That advantage is conditional. The procedure carries deadlines, and failing to engage with it properly has consequences. A builder who treats a claim notice as ordinary correspondence has already misread the posture. The dedicated guides cover the process and the step-by-step timeline.
McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241 held that the Act supplies the virtually exclusive remedy for construction defect claims against builders of new residential construction, covering both economic loss and property damage. A plaintiff inside the Act’s scope generally cannot route around it into common-law tort theories to escape the Act’s procedures.
That cuts both ways. It closes off some plaintiff theories, and it closes off the economic loss rule as a defense — the Act displaces the framework in which that rule operates.
Where the Act does not apply and the plaintiff has no contract with the contractor — typically a subsequent purchaser — the claim must be in tort, and duty is the first hurdle. The analysis runs through the multi-factor test in Biakanja v. Irving (1958) 49 Cal.2d 647, which was applied to construction professionals in Beacon Residential Community Assn. v. Skidmore, Owings & Merrill LLP (2014) 59 Cal.4th 568. Beacon is an architect case, and its extension to contractors specifically is doctrinal inference rather than a direct holding.
Duty is not the end of it. Even where a duty exists, Aas bars negligence recovery for purely economic loss — the cost of repairing defective work that has not damaged anything else. Duty and the economic loss rule are independent hurdles, and a defense addressing only one leaves the other open.
The rule has fraud-based exceptions. Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979 permits tort recovery for affirmative intentional misrepresentation independent of the contract breach, and Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1 is the current controlling authority on whether fraudulent concealment arising from contract performance can survive the rule.
Two provisions bound exposure regardless of framework. Code of Civil Procedure section 337.15 sets a ten-year absolute statute of repose for latent construction defects, running regardless of when the defect was discovered. Code of Civil Procedure section 338(d) sets a three-year period for fraud with a delayed-discovery rule, under which the plaintiff bears the burden to plead the time and manner of discovery and the inability to have discovered earlier.
Section 337.15 is the outer boundary contractors most often want to know about, and it is genuinely an outer boundary — but it does not shorten anything, and it does not answer whether a claim brought within ten years is timely under the applicable limitations period.
Guide
What it covers
Primary authority
SB 800 Prelitigation Process
The right to repair before being sued, from the builder’s side
Civ. Code §§895–945.5
Prelitigation Notice & Repair Timeline
The procedure step by step, with the deadlines
Civ. Code §§910–938
Defending a Construction Defect Claim
What to expect once a claim is filed
Civ. Code §§895–945.5; CCP §337.15
Insurance and Indemnification
Protecting yourself before a dispute starts
Contract and insurance practice
Builder vs Hired Contractor
Which side of the Act you are on
McMillin Albany; BPC §7044
The Economic Loss Rule
Your best defense on a pure-economic claim outside the Act
Aas; Robinson Helicopter; Rattagan
Before you ask
The Right to Repair Act, Civil Code sections 895 through 945.5, applies to new residential construction — single-family homes, townhomes, and condominiums — where the original close of escrow occurred on or after January 1, 2003. It does not apply to commercial construction or to condominium conversions, so building type and escrow date are threshold facts before any substantive analysis.
Code of Civil Procedure section 337.15 sets a ten-year absolute statute of repose for latent construction defects, running regardless of when the defect was discovered. That is an outer boundary rather than a limitations period — a claim brought within ten years still has to be timely under whatever limitations rule applies to it.
Both, but it is more of an advantage than consumer-facing material suggests. The Right to Repair Act sets a prelitigation notice-and-repair procedure at Civil Code sections 910 through 938 giving the builder a statutory opportunity to inspect and repair before litigation — something a contractor facing a common-law claim does not get. It carries deadlines, and failing to engage properly has consequences.
Generally not within the Act’s scope. McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241 held the Act supplies the virtually exclusive remedy for construction defect claims against builders of new residential construction, covering both economic loss and property damage, so a plaintiff cannot readily route around the Act into common-law theories.
No. Within the Act’s scope its building standards are actionable without proof that the defect caused resulting damage, and McMillin Albany treats the Act as displacing common-law theories. The economic loss rule under Aas v. Superior Court (2000) 24 Cal.4th 627 does its work outside the Act, not inside it.
The answer depends entirely on the framework. Inside the Right to Repair Act a violation of a building standard is actionable without resulting damage. Outside it, Aas v. Superior Court (2000) 24 Cal.4th 627 bars negligence recovery for defects that have not caused actual property damage or personal injury — the same physical condition can be a live claim in one framework and a non-starter in the other.
Keep reading
Prelitigation section + navigation table
Navigation table
Navigation table
Navigation table
“a separate analysis covered on its own guide”
Economic loss rule section
Duty to a non-privity plaintiff
Builder status via spec building
Inline first mention: builder, close of escrow, latent defect, statute of repose, prelitigation, non-privity
Attorneys section — end of article
If this describes your situation, an attorney affiliated with Bay Legal PC, CA Bar No. 332479, can review it with you.