In the case Standard Pacific Corp. v. Superior Court, several owners of homes in a Southern California subdivision sued the builder, Standard Pacific, alleging construction defects. The builder requested that the court stay the proceedings until the homeowners complied with the requirements of California’s "Fix-it" law, under which owners are required to give builders notice and opportunity to repair alleged defects prior to filing suit.

The owners argued that the builder’s failure to comply with the Fix-it law’s "documentation and information" production requirements (Sec. 912) released owners from the law’s pre-litigation procedures. They argued that the burden of proving compliance was on the builder.

The trial court agreed with the owners and fined the builder $1,000.

On appeal, the trial court’s ruling and fine was reversed, though allowed the owners an opportunity to prove that the builder had not, in fact, provided them with the required documentation and information. The Court of Appeals rejected the builder’s argument that the Fix-it law provided only an "opt-in" protection for the builder, whereby it could obtain the protection of the pre-litigation procedures by producing the documentation and information at issue.

Rather, the court explained, the express language of the statute requires that the builder "shall" produce the information, and "provides a sanction for noncompliance — the builder who fails to comply is ‘not entitled to the protection of this chapter, and the homeowner is released from the requirements of this chapter …’ "

Because the owners were seeking to invoke this builder-noncompliance-based exception to the rule that required owners to follow prescribed pre-litigation procedures, the Court of Appeals ruled that the burden to factually prove the builder’s noncompliance was on the owners.

In order to avoid an unfair result, though, the court held that the trial court should provide owners the opportunity to prove that the builder had not complied with the documentation and information mandates of the Fix-it law.

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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