Purpose and Scope

Civil Code section 896 establishes a set of standards for residential construction, and provides tort liability for entities that fail to meet those standards. (Civ. Code, Sec. 896 [“In any action seeking recovery of damages arising out of, or related to deficiencies in, the residential construction ... a builder ... shall, except as specifically set forth in this title, be liable for, and the claimant's claims or causes of action shall be limited to violation of, the following standards, except as specifically set forth in this title”].) (Homes v. Superior Court of San Diego Cnty. (2013) 214 Cal.App.4th 1090, 1101.)

The standards cover numerous aspects of residential construction, including:

• “water issues” (Civ.Code, § 896(a)),
• “structural issues” (Civ.Code, § 896(b)),
• “soil issues” (Civ.Code, § 896(c)),
• “fire protection issues” (Civ.Code, § 896(d)),
• “plumbing and sewer issues” (Civ.Code, § 896(e)), and
• “electrical system issues” (Civ.Code, § 896(f)).

(Id.)

“[T]he Act applies broadly to ‘any action seeking recovery of damages arising out of, or related to deficiencies in, the residential construction.’” (McMillin Albany LLC v. Superior Court of Kern Cnty. (2015) 192 Cal. Rptr. 3d 53, 60 citing Sec. 896.)

“In such an action, ‘the claimant's claims or causes of action shall be limited to violation of’ the standards set out in section 896.” (Id. citing Sec. 896.) “Section 896 does not limit application of the Act to actions seeking recovery for deficiencies that have not yet caused property damage.” (Id.) “The language limiting a claimant's claims or causes of action does not make an exception for common law tort causes of action where the defect has caused property damage.” (Id.) “By its plain language, the Act applies to any action for damages related to construction deficiencies, and limits a claimant's claims or causes of action to claims of violation of the statutory standards.” (Id.)

Limitations of Sec. 896

“Section 896 does not provide that “any action arising out of the Act is an action under the Act.” (McMillin, supra, 192 Cal. Rptr. 3d 53 at 63 citing Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98, at 108) “As previously discussed, it provides that ’[i]n any action seeking recovery of damages arising out of, or related to deficiencies in, the residential construction ..., the claimant's claims or causes of action shall be limited to violation of’ the standards set out in Chapter 2.” (Id., citing Sec. 896.) “The language of the statute clearly and unequivocally expresses the legislative intent to limit the causes of action available to a homeowner claiming damages arising out of, or related to deficiencies in, the construction of the homeowner's residence.” (McMillin Albany LLC v. Superior Court of Kern Cnty. (2015) 192 Cal. Rptr. 3d 53, 63.)

McMillin has now been decided and warrants a different ruling than the court issued on the demurrer. In McMillin Albany LLC v. Super. Ct. (2018) 4 Cal.5th 241.) the California Supreme Court held that The Right to Repair Act (hereinafter “the Act”) provides an exclusive remedy for damages resulting from construction defects in residential buildings.

The Court held that although the legislature preserved common law claims for personal injury, the Legislature made “the Act the virtually exclusive remedy not just for economic loss but also for property damage arising from construction defects.” (McMillin Albany LLC v. Superior Court, supra, 4 Cal.5th at 247.) As with economic losses, the Act expressly includes property damages resulting from construction defects among the categories of damages recoverable under the Act. (Id. at 252.) The California Supreme Court held that the legislative history of the Act confirms what the statutory text reflects: the Act was designed as a broad reform package that would substantially change existing law by displacing some common law claims and substituting in their stead a statutory cause of action. (Id. at 256.) By its ruling, the Supreme Court of California disapproved the holdings in Liberty Mutual Insurance Company v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98, and Burch v. Superior Court (2014) 223 Cal.App.4th 1411.