In the case Gundogdu, et al. v. King Mai Inc., the homebuilder (King Mai) filed a notice of completion for a home and continued to own it for nearly a year and a half thereafter before selling it to the buyers (the Gundogdus). After about nine years of owning the property and finding numerous defects in its construction, the buyers sued King Mai.

King Mai said the Gundogdus were barred from bringing suit by the 10-year statute of limitations on construction-defect litigation set forth in California Code of Civil Procedure section 337.15.

The Gundogdus, however, argued that the 10-year statute of limitations didn’t begin running at the time the notice of completion was filed …

In the case Gundogdu, et al. v. King Mai Inc., the homebuilder (King Mai) filed a notice of completion for a home and continued to own it for nearly a year and a half thereafter before selling it to the buyers (the Gundogdus). After about nine years of owning the property and finding numerous defects in its construction, the buyers sued King Mai.

King Mai said the Gundogdus were barred from bringing suit by the 10-year statute of limitations on construction-defect litigation set forth in California Code of Civil Procedure section 337.15.

The Gundogdus, however, argued that the 10-year statute of limitations didn’t begin running at the time the notice of completion was filed, on grounds that King Mai "owned the subject property for almost a year and a half from the time the construction phase was complete."

The trial court found that the statute of limitations barred the buyers’ claims for damages.

The appeal court agreed, and upheld the trial court’s grant of summary judgment in favor of the builder. On appeal, the court clarified that the question at hand was whether King Mai’s continued, passive ownership of the property after construction was complete precluded it from claiming the protection of the statute of limitations.

The appeals court opined that to allow the buyers’ claim to proceed in this matter would defeat the entire purpose of the statute of limitations to limit builders’ and contractors’ exposure to perpetual liability for their work. Accordingly, the court affirmed the trial court’s ruling.

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.

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