BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1892|
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THIRD READING
Bill No: AB 1892
Author: Halderman (R)
Amended: 4/16/12 in Assembly
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMMITTEE : 8-0, 7/2/12
AYES: Price, Corbett, Correa, Hernandez, Negrete McLeod,
Strickland, Vargas, Wyland
NO VOTE RECORDED: Emmerson
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 75-0, 5/17/12 (Consent) - See last page
for vote
SUBJECT : Department of Consumer Affairs: construction
defect
solicitations
SOURCE : Author
DIGEST : This bill requires the Department of Consumer
Affairs (DCA) to post a notice on its Internet Web site
advising consumers who receive a construction defect
solicitation to check with their builder in addition to
taking any further action.
ANALYSIS :
Existing law:
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1. Establishes the DCA, which oversees more than 36 boards,
bureaus, committees, and a commission, and other
programs that regulate more than 100 businesses and 240
professional categories, including doctors, nurses,
dentists, engineers, architects, contractors,
cosmetologists and automotive repair facilities, and
other diverse industries. These regulatory entities
license, register, or certify more than 2.5 million
professionals and health care practitioners, investigate
complaints, and discipline violators. They also
establish the minimum qualifications and levels of
competency for licensure.
2. Provides construction defect liability standards for
newly constructed housing and a process for the
resolution of construction defect disputes, including a
pre-litigation process that allows builders to repair
defects before a homeowner can file suit.
This bill requires DCA to post the following statement on
its Internet Web site: "If you receive a construction
defect solicitation, please check with your builder in
addition to taking any further action."
Background
SB 800 (Burton and Wesson), Chapter 722, Statutes of 2002),
was considered landmark legislation in the area of
construction defect litigation. The bill affected two
significant reforms. First, the bill established
definitions of construction defects for the first time, in
order to provide a measure of certainty and protection for
homeowners, builders, subcontractors, design professionals
and insurers. Second, the bill imposed a procedure that a
homeowner must follow before bringing suit against a
builder. The homeowner must send a written notice to the
builder setting out the nature of the claim. The builder
must acknowledge the claim in writing. The builder may
then elect to conduct inspection and testing of the alleged
defect within a specified period, and must provide certain
documentation to the homeowner on request regarding
building plans and specifications.
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The builder may then offer to repair the alleged violation
within a prescribed period. Such an offer to repair must
also compensate the homeowner for all applicable damages
recoverable. Upon receipt of the offer to repair, the
homeowner has a prescribed period in which to authorize the
builder to proceed with the repair. The offer to repair
must also be accompanied by an offer to mediate the dispute
if the homeowner so chooses.
The homeowner is relieved from any further pre-litigation
process if the builder fails to acknowledge the claim
within the time specified, elects to not go through this
statutory process, fails to request an inspection within
the time specified, fails to make the offer to repair or
otherwise strictly comply with the obligations of the
statute within the times specified, or if the contractor
performing the repair does not complete the repair in the
time or manner specified.
Department of Consumer Affairs . The mission of DCA is to
protect and serve California consumers while ensuring a
competent and fair marketplace. DCA helps consumers learn
how to protect themselves from unscrupulous and unqualified
individuals and protects professionals from unfair
competition by unlicensed practitioners.
The DCA issues licenses for more than 100 business and 200
professional categories, including doctors, dentists,
contractors, cosmetologists and automotive repair
facilities. The DCA includes 40 regulatory entities (nine
bureaus, one program, twenty-five boards, three committees,
one commission, and one office) which establish minimum
qualifications and levels of competency for licensure.
They also license, register, or certify practitioners,
investigate complaints and discipline violators. The DCA's
operations are funded exclusively by license and regulatory
fees. The DCA provides these entities with administrative
support. The committees, commission and boards are
semi-autonomous bodies whose members are appointed by the
Governor and the Legislature.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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SUPPORT : (Verified 8/6/12)
California Building Industry Association
ARGUMENTS IN SUPPORT : The author's office states that
existing law includes a detailed "pre-litigation" process
for addressing construction defects known as the SB 800
process. The process is complex, and it is difficult for
homeowners to navigate without the assistance of an
attorney. As a result, the author's office proposes that
homeowners first investigate whether the builder is willing
to fix a construction defect. In an ideal situation, a
homeowner would have their defect fixed by a builder
without needing to invoke the assistance of the
SB 800 process or an attorney . Builders have stated that
they are often willing to fix construction defects, but are
not able to express this to homeowners until they have
already hired a lawyer. Thus, it is important that
homeowners have all available information before deciding
how to resolve their construction defect.
ASSEMBLY FLOOR : 75-0, 5/17/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Furutani, Beth
Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Ma, Mansoor, Mendoza, Miller,
Mitchell, Monning, Morrell, Nestande, Nielsen, Norby,
Olsen, Pan, V. Manuel P�rez, Portantino, Silva, Smyth,
Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski,
Williams, John A. P�rez
NO VOTE RECORDED: Fletcher, Bonnie Lowenthal, Perea,
Skinner, Yamada
JJA:d 8/7/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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