SAN FRANCISCO — The homeowners association for a historic
landmark in San Francisco has received $1.5 million settlement
following application to the Senate Bill 800 claims process years
Also known as California’s “Builder’s Right to Repair Act”,
800 claims is a pre-trial resolution process applying to new
construction or major remodeling dating back to Jan. 1, 2003. The
correction of any defect that, if left ignored, would cause actual —
as opposed to economic — damage was covered by SB 800. These claims
have application time
limits that are complex and left many complaints unaddressed.
Damage from a pre-existing defect that occurred outside of the
four years was not specifically addressed by SB 800, and this
situation continued for 10 years.
Then came Liberty Mutual
Insurance Company v. Brookfield Crystal Cove (2013).
Following the ruling, associations were no longer bound by SB 800
or civil-procedure awards and could now use tort actions to recover
awards from actual physical damage that occurred to common areas as a
result of defects.
A year later, in Burch v Superior
Court, Liberty was reaffirmed and extended the rights of
associations, stating that a builder could be held directly
responsible for negligence pertaining to damages occurring beyond the
time limit set by SB 800.
option has recently emerged. Another case ruling said that
parties to an agreement could design their own claims procedure as
long as the terms were not “unconscionable.”
Rachel M. Miller, senior partner of The Miller Law Firm, told the
Northern California Record that when “ the developer
wants to deviate from the standard pre-litigation procedures set up
under SB 800, they can opt out and establish their own procedures if
they disclose this in the [covenants, conditions and restrictions].”
The parties mentioned previously included 201 Sansome Street
Owners Association and Swinerton Builders, and concerned an office
building formerly known as the Royal Insurance Building, which was
converted by Swinerton in 2006 into 46 residential and two commercial
Following the work, according to a news release, Sansome Street
Owners Association claimed that the building was plagued
with numerous cases of water damage, improperly sealed windows, a
damaged elevator, plumbing problems and numerous structural cracks.
The Association submitted SB 800 papers to Swinerton and the
process, which, according Miller, can take between 1½ to two years,
was in its second year when she was hired to re-evaluate the claim
Within 15 months, Miller had a resolution that pleased the
Association and was acceptable to Swinerton.
Asked about their reaction to the settlement, Miller told the
Record that it was extremely fair.
“The HOA [homeowners association],” she said, “recovered
enough money to fix the priority building repairs required.”
Miller also addressed the lengthy process.
“First, this is a historic building in the city,” she said.
“This required oversight by experts familiar with city-planning
requirements for restoration of historic buildings … Further, the
developer of this project was long gone, took the money from the unit
sales and left town. So it took time to find a responsible entity and
then determine what insurance they had to pay for these damages.”
Miller noted that the prior law firm hired by Sansome practiced
only general corporate law and charged on an hourly basis during the
course of the 18 months.
“We hope that Homeowners Associations now know they have choices
to hire construction defect specialty counsel who can help them on a
contingency fee basis,” she said.
The Northern California Record attempted to speak with
Swinerton Builders, but was told by its national media officer, Jack
Blanchat, that the company declined to comment.