TL;DR — Key Takeaways
- A California HOA can pursue the developer or builder, the general contractor, subcontractors, material suppliers, product manufacturers, and design professionals, but not all on the same terms.
- The builder generally answers under the Right to Repair Act’s standards. Others are generally liable only to the extent their own negligence or breach caused the problem.
- The Right to Repair Act covers original construction intended to be sold as individual dwelling units, which includes newly built for-sale condominium projects. It excludes condominium conversions.
- For homes the Act covers, the California Supreme Court has held it is effectively the exclusive remedy for defects, and its pre-litigation procedure applies however the claim is pleaded.
- Every claim runs up against the ten-year statute of repose, measured from substantial completion.
- A defendant with no assets or insurance is rarely worth pursuing, however clear its fault.
A California HOA with a construction defect claim can pursue the developer or builder, the general contractor, subcontractors, material suppliers, product manufacturers, and the architects and engineers who designed the project. The builder generally answers under the Right to Repair Act’s performance standards; the others are generally liable to the extent their own negligence or breach caused the defect. Which parties are worth naming depends on who caused what, whether their responsibility can be proved, and whether they have insurance to pay a judgment.
This post covers the defendants. Whether the association has standing to sue for a particular kind of damage is a separate question, covered in what to do when your HOA dispute has too few owners.
Does the Right to Repair Act apply to your project?
Most of the analysis depends on this threshold question.
The Right to Repair Act, Civil Code sections 895 and following, applies to original construction intended to be sold as an individual dwelling unit, and only to units where the seller signed the purchase agreement on or after January 1, 2003. A newly built condominium project sold unit by unit falls within that description, including its common areas. Condominium conversions are expressly excluded: an apartment building later converted to condominiums is not original construction intended to be sold as individual units.
Where the Act applies, the California Supreme Court held in McMillin Albany LLC v. Superior Court (2018) that it is effectively the exclusive remedy for construction defects in covered homes, covering both economic losses and actual property damage, and that its pre-litigation procedure applies regardless of how the claim is labeled. An association cannot avoid the Act by pleading negligence or strict liability instead.
Where the Act does not apply, as with a conversion or pre-2003 construction, common-law theories remain available: negligence, strict liability against parties in the business of producing mass housing, breach of contract, and breach of warranty. Those theories come with their own limits, including the rule that negligence claims generally require actual damage to property, not merely a defect that has not yet caused harm. Does the Right to Repair Act apply to you covers the scope question in detail.
The defendants, one by one
The developer or builder. The primary defendant in almost every association defect case. Under the Act, the builder is liable for violations of the Act’s functionality standards, which address matters such as water intrusion, structural integrity, soils, fire protection, plumbing, and electrical systems, subject to the builder’s defenses. The builder also has the right to receive notice and an opportunity to repair before suit.
The general contractor. Where the general contractor is a separate entity from the developer, it can be named, typically for its role in building the project and for the work of the subcontractors it hired.
Subcontractors. The trades that actually performed the defective work, whether framing, waterproofing, roofing, windows, stucco, or plumbing. Under the Act, parties other than the builder are generally liable only to the extent the claimant proves they negligently caused a violation of the standards or breached a contract. In practice, subcontractors are frequently brought in by the builder through cross-claims for indemnity rather than sued directly by the association, and their insurers often fund a significant share of any settlement.
Material suppliers and product manufacturers. Where a defect traces to a failed product, such as windows, roofing materials, or plumbing components, the manufacturer may be liable. Manufacturer warranties can also provide a route that does not require litigation at all.
Architects and engineers. Design professionals can be liable where the defect lies in the design rather than the construction. Claims against them carry additional procedural requirements, including a certificate of merit that must be filed before or with the complaint in a professional negligence action, confirming that counsel consulted a qualified professional in the same discipline who believes the claim has merit. Architect and engineer contracts covers design professional liability.
If your association is trying to work out which parties belong in a claim, that decision is usually driven by the expert investigation of what failed and why. Call Bay Legal at (650) 668-8000 in Northern California or (213) 668-8000 in Southern California.
Where the money usually comes from
In practice, construction defect recoveries are funded mostly by insurance rather than by defendants’ own assets, and understanding the coverage picture early shapes who is worth naming.
Builder and contractor liability policies. The developer, the general contractor, and each subcontractor typically carry commercial general liability insurance. Those policies, and the years in which they were in force, frequently matter more than the defendants’ balance sheets.
Wrap-up programs. Many condominium projects are insured under a consolidated program covering the developer and the trades together for work on that project. Where one exists, it can simplify the coverage picture considerably, and identifying it early is worth the effort.
Additional insured status. Builders commonly require subcontractors to name them as additional insureds, which is part of why subcontractors are drawn into association cases through the builder.
The association’s own coverage. An association’s property insurer that pays for resulting damage may pursue the responsible parties itself, which can affect how the association’s claim is coordinated.
Coverage questions are specialized and policy-specific. They are a reason to involve counsel and the association’s broker early rather than a question to resolve from the outside.
The pre-litigation sequence
Before suing, an association typically has to work through overlapping procedures.
Member notice. Civil Code section 6150 requires written notice to members and a meeting at least 30 days before filing suit against the developer.
The Calderon process. Associations of 20 or more units must complete a pre-litigation process under Civil Code section 6000 before suing the builder, beginning with a notice of commencement of legal proceedings. Serving that notice tolls the applicable limitations and repose periods, against all potentially responsible parties.
The Right to Repair Act procedure. For covered homes, the builder has the right to notice of the claim, to inspect, and to offer to repair before suit, under Civil Code sections 910 and following. A builder that fails to respond to a proper notice can lose the benefit of the procedure.
No member vote. A CC&R provision requiring member approval before the board sues the developer is void under Civil Code section 5986. Civil Code 5986 covers why.
The clock
The ten-year statute of repose for latent construction defects runs from substantial completion of the improvement, not from discovery. It is not extended by a builder’s promises to repair. Shorter periods apply to patent defects and to some property damage claims, running inside the ten years.
For a project built in phases, each phase may have its own substantial completion date, which means each may carry its own deadline. HOA developer transition covers building a deadline map.
When a defendant is not worth naming
Being at fault and being worth suing are different things.
A subcontractor that has dissolved, has no insurance, or had coverage that excludes the relevant work may be clearly responsible and still unable to contribute anything. Naming it adds cost and complexity without adding recovery. The same is true of a developer entity created for a single project and wound up afterward, though in that situation insurance, the general contractor, and the subcontractors’ insurers may still provide a route.
The practical question for each potential defendant is not only whether it caused the defect but whether there is insurance or an asset to pay. Answering that early, through the association’s counsel and experts, shapes the entire case. Suing someone with no money covers the collectability question generally.
Bay Legal represents associations in construction defect matters. Reach us at (650) 668-8000, (213) 668-8000, or through baylegal.com/contact-us.
Frequently Asked Questions
Who can an HOA sue for construction defects in California?
The developer or builder, the general contractor, subcontractors, material suppliers, product manufacturers, and design professionals such as architects and engineers. The builder generally answers under the Right to Repair Act’s standards, while others are generally liable to the extent their own negligence or breach of contract caused the defect.
Does the Right to Repair Act apply to condominium common areas?
It applies to original construction intended to be sold as individual dwelling units, sold under purchase agreements signed on or after January 1, 2003, which includes newly built for-sale condominium projects and their common areas. It expressly excludes condominium conversions.
Can an HOA avoid the Right to Repair Act by suing for negligence instead?
Not for homes the Act covers. In McMillin Albany LLC v. Superior Court (2018), the California Supreme Court held that the Act is effectively the exclusive remedy for defects in covered homes, including actual property damage, and that its pre-litigation procedure applies regardless of how the claim is pleaded.
Can an HOA sue an architect or engineer?
Yes, where the defect lies in the design. A professional negligence action against an architect or engineer requires a certificate of merit filed before or with the complaint, confirming that counsel consulted a qualified professional in the same discipline who believes the claim has merit.
How long does an HOA have to sue for construction defects?
The ten-year statute of repose for latent defects runs from substantial completion of the improvement, not from discovery, and is not extended by repair promises. Shorter periods apply to patent defects. For associations of 20 or more units, serving a Calderon notice tolls the limitations and repose periods.
