📋 Overview

You've received a demand letter from a homeowner claiming construction defects in your work. California has specific procedures for handling construction defect claims, including the Right to Repair Act (SB 800) which gives you the opportunity to inspect and repair before litigation. This guide will help you protect your license, respond strategically, and minimize exposure.

License at Risk

Unresolved defect complaints can trigger CSLB investigation and license discipline under B&P Code 7109 (departure from standards).

Right to Repair

Under SB 800 (Civil Code 895+), you typically have the right to inspect and offer repair before the homeowner can sue.

Insurance Notice

Immediately notify your general liability insurance carrier. Failure to give timely notice can void coverage.

Common Construction Defect Claims

  • Structural defects - Foundation cracks, framing issues, load-bearing problems
  • Water intrusion - Leaks, improper waterproofing, drainage failures
  • Code violations - Work not meeting building code requirements
  • Material defects - Substandard materials, improper installation
  • Finish defects - Poor workmanship on visible surfaces
  • System failures - HVAC, plumbing, electrical not functioning properly
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Professional Response on Letterhead

Case review, response letter asserting your repair rights, and strategic guidance to protect your license.

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🔍 Evaluate the Claim

Before responding, conduct a thorough review of the project and the claimed defects. This will help you determine if the complaint has merit and what defenses may apply.

Risk Assessment Matrix

Defect Type Potential Exposure Risk Level
Structural/Foundation Full repair cost + temporary housing + consequential damages HIGH
Water intrusion/Mold Remediation + health damages + potential toxic tort HIGH
Code violations Correction costs + permit fees + CSLB discipline MEDIUM
Cosmetic/Finish issues Repair or replacement of affected areas LOW
Warranty claim Per warranty terms (typically repair/replace) MEDIUM

📄 Project Records

  • ✓ Signed contract with scope of work
  • ✓ Change orders and modifications
  • ✓ Building permits and inspections
  • ✓ Photos during construction

📝 Communications

  • ✓ Emails and texts with homeowner
  • ✓ Prior complaints or punch lists
  • ✓ Warranty information provided
  • ✓ Final walkthrough documentation

Notify Your Insurance Carrier Immediately

Most CGL policies require prompt notice of any claim or potential claim. Failure to notify your carrier can result in denial of coverage. Send written notice within 24-48 hours of receiving the demand letter.

🛡 Your Defenses

California law provides contractors with several defenses to construction defect claims. Identify which apply to your situation.

Right to Repair (SB 800)

Under Civil Code 910-938, for residential construction after January 1, 2003, homeowners must give you written notice and allow inspection before filing suit. You have 14 days to acknowledge, 14 days to inspect, and 30 days to offer repair.

When to use: Homeowner threatens lawsuit without first following pre-litigation procedures.

Statute of Limitations/Repose

Patent defects: 4 years from completion. Latent defects: 10 years from substantial completion. Claims outside these windows are time-barred under CCP 337.1 and 337.15.

When to use: Project was completed many years ago; check completion date against claim date.

Work Per Plans and Specifications

If you built exactly according to architect/engineer plans and specs, liability may shift to the design professional. Known as the "Spearin Doctrine" in California.

When to use: Defect arises from design, not construction execution.

Homeowner Modification or Misuse

Under Civil Code 944, there's no liability if the defect resulted from the homeowner's unreasonable failure to maintain or alterations to the work.

When to use: Homeowner made changes, failed to maintain, or used property beyond intended purpose.

Passed Final Inspection

While not a complete defense, passing city/county building inspections creates evidence that work met code at time of construction.

When to use: All work was permitted and passed required inspections.

Weak Defenses to Avoid

  • "They paid the final invoice" - Payment doesn't waive defect claims
  • "It's been too long" - Without checking actual statute dates
  • "The subcontractor did it" - You're still liable to homeowner (seek indemnity from sub)
  • "They signed off on the work" - Latent defects can appear later

⚖ Response Options

Choose your response strategy based on claim validity, your defenses, and business considerations.

Invoke Right to Repair

For residential work, send a formal acknowledgment requesting inspection access. This is required under SB 800 and gives you control of the repair process.

  • Required pre-litigation step
  • Opportunity to fix at your cost
  • Shows good faith

Negotiate Settlement

If defect exists, negotiate a cash settlement or agree to repair scope. Often cheaper than litigation even if you have defenses.

  • Avoids CSLB complaint
  • Preserves relationship
  • Limits legal costs

Dispute Claim

If claim lacks merit or defenses are strong, send formal denial with documentation. Be prepared for escalation.

  • Preserves all defenses
  • May deter weak claims
  • Document everything

Tender to Insurance

Turn claim over to your liability carrier to handle investigation, defense, and potential settlement.

  • Professional defense
  • Coverage for damages
  • Required for coverage

Cost-Benefit Analysis: Repair vs. Litigation

Example: $15,000 claimed repair cost

Repair if you handle it $8,000-12,000
Your attorney fees (defense) $15,000-30,000
Expert witness fees $5,000-15,000
Lost time from work $5,000+
CSLB investigation response $3,000-10,000
LITIGATION COST IF YOU LOSE $50,000+

Repair First Strategy

For claims under $50,000, offering prompt professional repair often costs 30-50% less than litigation - even if you believe you'd ultimately prevail. Document everything and get signed completion acknowledgment.

📝 Sample Responses

Copy and customize these response templates for your situation.

SB 800 Acknowledgment & Inspection Request
We acknowledge receipt of your notice dated [DATE] regarding claimed construction defects at [PROPERTY ADDRESS]. Pursuant to California Civil Code Section 916, we hereby request to inspect the property to evaluate the claimed conditions. Please provide access on one of the following dates: [DATE OPTIONS]. We take all concerns seriously and are committed to addressing any legitimate issues in accordance with our warranty obligations and California law. The inspection will allow us to properly evaluate the claimed defects and, if warranted, prepare a repair proposal as provided under the Right to Repair Act. Please confirm an inspection date within 14 days. We look forward to resolving this matter promptly.
Repair Offer Response
Following our inspection on [DATE], we are prepared to offer the following repairs pursuant to Civil Code Section 919: [DESCRIBE REPAIR SCOPE] This repair work will be performed at our expense within [TIMEFRAME] of your written acceptance. The repairs will be warranted for [WARRANTY PERIOD] from completion. Upon completion, we request your signature on a repair completion acknowledgment. This offer remains open for 30 days per Civil Code 919. If we do not receive acceptance by [DATE], this offer will expire. We believe this proposal fully addresses the claimed conditions and demonstrates our commitment to quality workmanship.
Statute of Limitations Defense
We acknowledge receipt of your demand letter dated [DATE]. After reviewing our records, we must respectfully dispute this claim. The project at [ADDRESS] was substantially completed on [COMPLETION DATE], as evidenced by [final inspection/certificate of occupancy/final payment]. Your claim, made more than [X] years after completion, is barred by California Code of Civil Procedure Section 337.1 (4-year limit for patent defects) and/or Section 337.15 (10-year statute of repose). The conditions you describe were visible and discoverable at or shortly after completion. Accordingly, any claim for these conditions has expired. We deny liability for the claimed defects and will vigorously defend any legal action.
Homeowner Modification Defense
We have reviewed your claim regarding [DEFECT DESCRIPTION] at [PROPERTY ADDRESS]. Based on our inspection and records, the condition you describe appears to result from [subsequent modifications/failure to maintain/alterations] performed after our work was completed. Specifically, [DESCRIBE MODIFICATION OR MAINTENANCE FAILURE]. Under California Civil Code Section 944, a builder is not liable for damages arising from alterations, modifications, or a homeowner's unreasonable failure to minimize or prevent damage. We completed our work in accordance with the contract and applicable building codes, as confirmed by [inspections/permits/final walkthrough]. We therefore deny responsibility for the current condition.

🚀 Next Steps

Immediate actions to protect your license and business.

Step 1: Notify Insurance

Contact your GL carrier within 24-48 hours. Send written notice with copy of demand letter.

Step 2: Gather Records

Pull all project files including contract, permits, photos, emails, and inspection records.

Step 3: Respond Timely

Under SB 800, you have specific deadlines. Don't let them lapse by ignoring the claim.

Step 4: Document Everything

From this point forward, confirm all communications in writing. Photos, emails, certified mail.

If They File a CSLB Complaint

  • Respond within 15 days - CSLB expects written response to all complaints
  • Provide documentation - Contract, permits, inspection records, communications
  • Consider mediation - CSLB offers voluntary mediation for some disputes
  • Get representation - License defense attorney if formal accusation filed

If They File a Lawsuit

  • Forward to insurance immediately - They'll assign defense counsel
  • File answer within 30 days - Don't let default judgment enter
  • Assert all defenses - SB 800 compliance, statutes, specifications defense
  • Identify subcontractors - May need to tender defense/seek indemnity

Protect Your License

Construction defect claims can threaten your CSLB license. Get professional help responding strategically.

Schedule Consultation - $450

California Resources

  • CSLB Website: cslb.ca.gov - License lookup, complaint process
  • Right to Repair Act: Civil Code 895-945.5 - Full text of SB 800
  • B&P Code 7000+: Contractors State License Law
  • Building Standards: California Building Code (Title 24)