California homeowners face builders over defects

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California homeowners face builders over defects

ASSOCIATED PRESS

July 22, 2002

SACRAMENTO - A 10-year statute of limitations on structural repairs is

putting pressure on the relationship between builders and new homeowners.

Homeowners say lawsuits are their only recourse against unscrupulous

builders, while contractors argue an increase in lawsuits is making their

business more costly.

Mohammed Hussein has firsthand knowledge of the conflict. When cracks formed

in his San Leandro home he called the builder. The cracks grew and after two

visits to Westco Community Builders, the company said he was on his own.

Hussein is now among 85 families in his development suing over what they

consider to be construction defects. The lawsuit is seeking $15 million for

repairs and medical costs from mold exposure.

Hussein and his neighbors say they were left with only legal action to save

them from recalcitrant builders. But the builders argue the statute of

limitations often prompts more suits as the 10-year deadline approaches,

resulting in frivolous claims.

Builders also say the lawsuits are too costly to fight, and add

significantly to home prices because the increase in the number of suits has

lead to higher insurance costs for builders.

Awards in building material cases range from $65,000 to $3.6 million, and

the range of awards makes it difficult for insurers to set premiums for

contractors, said Candysse , spokeswoman for the Information Network

of California.

And when they do, premiums are high.

Replacing the statute of limitations with optional 10-year home warranties

would curb frivolous lawsuits yet still protect consumers, builders said.

Warranties would give them the right to repair defects.

Critics of California's 10-year statute of limitations say it's out of step

with the nation.

However, 14 of the 21 most populous states have statutes of limitations as

long, if not longer than California, according to Larry Rosenthal, a

professor at the University of California, Berkeley's Haas School of

Business. And among them are fast-growing states such as Florida, at 15

years, and land, at 20.

Wiener, the lawyer representing the San Leandro builders, hints that

taking the law out of construction defects might streamline the process.

" Often there's an exacerbation of a problem by the homeowner or the

homeowner's attorney by virtue of the fact that they are not giving the

opportunity to the developer to come in and fix a problem before it becomes

a major problem, " Wiener said.

But homeowners like Hussein say they did give the builder a chance to do

things right, to no avail.