BILL ANALYSIS Ó SB 652 Page 1 SENATE THIRD READING SB 652 (DeSaulnier) As Amended July 2, 2013 Majority vote SENATE VOTE :36-0 JUDICIARY 10-0 ----------------------------------------------------------------- |Ayes:|Wieckowski, Wagner, | | | | |Alejo, Chau, Dickinson, | | | | |Garcia, Gorell, | | | | |Maienschein, Muratsuchi, | | | | |Stone | | | |-----+--------------------------+-----+--------------------------| | | | | | ----------------------------------------------------------------- SUMMARY : Improves real estate disclosures. Specifically, this bill requires the seller of any real property to disclose to a potential buyer specified claims regarding construction disputes. FISCAL EFFECT : None COMMENTS : The author states, "Current law requires a homeowner to follow a mandatory procedure (pursuant to SB 800) prior to filing a construction defect lawsuit. SB 800 provided a pre-litigation procedure in which a homeowner must present a notice of claimed defects to a builder, who is then given the opportunity to correct the defect. If the builder fails to repair the defect, or the homeowner is dissatisfied with the repairs, the homeowner may proceed with the filing of a lawsuit. While SB 800 was intended to relieve builders from rampant litigation and to simplify repair procedures for consumers, it has resulted in the unintended consequence that a subsequent purchaser of the property may be unaware that the original homeowner has made defect claims against the builder's warranty. As such, this bill looks to address this lack of disclosure by requiring a homeowner to, when selling the property, disclose any construction defect claim and the resolution status of that claim. From a consumer perspective, a potential buyer should be aware of the nature of these defect claims and whether or not that defect has subsequently been repaired." SB 652 Page 2 This measure seeks to provide prospective purchasers with potentially helpful additional information regarding claims filed under the SB 800 (Burton), Chapter 722, Statutes of 2002, pre-litigation process that are not expressly covered by the existing disclosure form related to litigation. Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334 FN: 0001555