The Absolute Least
Some Builders will only want to do the absolute least which is required to comply with Title 7. While doing the absolute least may not be prudent, we have written this section to explain what it is that MUST be done in order for a Builder to comply with Title 7. The requirements listed below are the absolute minimum requirements expressly required by Title 7.
The method of compliance with Title 7 which requires the least effort is to use the Performance Standards and the Pre-litigation Procedures established by Title 7. However, even this approach requires Builders to do all of the following:
One Year Fit and Finish Warranty: California Civil Code Section 900 requires that Builders provide their purchasers with a one year limited warranty which covers the fit and finish of cabinets, mirrors, flooring, interior and exterior walls, countertops, paint finishes and trim. The one year period cannot be decreased. The limited warranty must be in writing.
Required Sales Documentation: CA Civil Code Section 912 requires Builders to provide buyers with various documents. These documents must be provided during the sales process. While Title 7 is not precise on timing, these materials should be provided either before the purchase contract is signed or at the time of signing. In any case, these documents must be provided no later than the close of escrow. If a Builder fails to provide all of these documents as required, one penalty is that the Builder will not be entitled to any of the protections provided by the Pre-litigation Procedures (CA Civil Code Section 912(i)).
- Selection of Agent for Pre-litigation Claims (912(e)): Builders must either file a notice with the California Secretary of State designating an agent to receive notice of Pre-litigation Procedure claims or notify the Buyer in writing of the name of a third party who can be served with such notices of claims (CA Civil Code Section 912(e)). The California Secretary of State has developed a form which may be used to make this filing. There is presently no fee charged to file this form. A copy of the Secretary of State form is available at the California Secretary of State's website.
The notification in writing must be "initialed and acknowledged by the Buyer and the Builder's sales representative."
- Recorded Notice (912(f)): Builders must record a notice relating to Title 7's Pre-litigation Procedures (CA Civil Code Section 912(f)). A copy of the recorded notice must be provided to the Buyer.
- Copy of Law (912(g)): Builders must provide buyers with a copy of Title 7 (CA Civil Code Section 912(g)). The copy must be "initialed and acknowledged by the purchaser and the Builder's sales representative."
A copy of Title 7, in a form to be attached to a Master Dispute Declaration, is available in the Resources - Statutes section of our website.
- Instructions for Resale Buyers: (912(h)): Builders must instruct each Buyer to provide to each subsequent purchaser, upon resale, copies of all documents given to the Buyer in conjunction with the original sale (CA Civil Code Section 912(h)). This instruction should be in writing.
- Maintenance Recommendations: Copies of all maintenance and preventative maintenance recommendations that pertain to the Buyer's residence must be given to the buyer (CA Civil Code Section 912(b)). This requirement includes any recommendations provided by product manufacturers, building material manufacturers and subcontractors.
- Manufactured Product Materials: Copies of all maintenance, preventive maintenance and limited warranty information provided by the manufacturers of manufactured products used in the Buyer's residence must be given to the Buyer (CA Civil Code Section 912(c)). Be sure to collect and save all those boxes, wrappers and packaging inserts that provide warranty information. Be sure that your subcontractors do the same and provide them to you. This requirement applies to windows, doors, roofs, plumbing products and fixtures, fireplaces, electrical fixtures, HVAC units, countertops, cabinets, paint, appliances and all other "manufactured products" used in the residence. A "manufactured product" is defined elsewhere in Title 7 as "a product that is completely manufactured offsite." Remember, if a Builder fails to provide these materials to a Buyer, one penalty is that the Builder may forfeit all of the protections provided by the Pre-litigation Procedures (CA Civil Code Section 912(i)).
- Limited Warranties: Copies of all Builder limited warranties must be given to the Buyer (CA Civil Code Section 912(d)). If a Builder has not established any limited warranties other than the mandatory one year fit and finish written warranty required by Civil Code Section 900, then this requirement is only applicable to the mandatory one year fit and finish warranty.
Isn't there an Easier Way?
The only alternative to the requirements imposed by CA Civil Code Section 912 is to "opt out" of the Pre-litigation Procedures. Given the substantial risk that Builders will fail to provide to Buyers all of the necessary product warranties and other documentation required by the Pre-litigation Procedures, many Builders have "opted out" from the Pre-litigation Procedures, establishing their own Claim Process. "Opting out" of the Pre-litigation Procedures may actually be simpler than doing the absolute least amount of work required to comply with them. However, as noted above, the risk that a Builder's Claim Process will be challenged makes it difficult to decide on the best solution.