The California Supreme Court ruled in McMillin Albany LLC et al. v. The Superior Court of Kern County, (1/18/2018) 4 cal. 5th 241, that California’s Right to Repair Act, California Civil Code sections 895 et seq. (“Act”) is the sole remedy for construction defect claims for economic loss and property damages regarding new residential construction. The Act establishes a pre-litigation dispute resolution process that must be followed before filing a construction defect action for new residential construction purchased after January 1, 2003. The Act provides a builder with the right to attempt to repair construction defects before litigation is filed.
The McMillin ruling resolved a split among two court of appeal decisions regarding the scope of the Act: Liberty Mutual Insurance Company v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98 and Burch v. Superior Court [(2014) 223 Cal.App.4th 1411. Those cases held that the Act is not the exclusive remedy for construction defect lawsuits that allege property damage arising from new residential construction. Therefore owners of new residential construction where construction defects had caused property damage were not required to proceed under the Act and instead could proceed with common law claims. McMillilin removes that option.