Category - Real Estate

1
The New EPA Underground Storage Tank Regulations: A Compliance Primer
2
Significant Victory for the Building Industry: Liberty Mutual is Rejected Once Again, This Time by the Third Appellate District in Holding SB800 is the Exclusive Remedy
3
UPDATE – McMillin Albany LLC v. Superior Court
4
Primary Defense Obligations Inescapable Despite Escape Clauses According to California Court of Appeal
5
Extra Extra
6
Disclosure, Disclosure, Disclosure
7
Contractor License Overview – With a Twist
8
SB 652: Homeowners Required To Notify Potential Buyers Of Construction Defect Claims
9
Colorado Update: Proposed Legislation Regarding HOA Condominium Defect Claims
10
Contractors: CALGreen Energy Provisions Have Been Changed

The New EPA Underground Storage Tank Regulations: A Compliance Primer

By: Richard Glucksman, Esq. and Ravi Mehta, Esq.
July 20, 2017

Published by AmWINS – Download Article

Background

Underground storage tanks (“USTs”) have long been used in a wide variety of residential, commercial, and industrial applications. UST regulations are intended to safeguard public health and safety, as well as reduce the economic impacts of a UST system failure. Most obviously, leaks in UST systems have the potential to contaminate the natural environment, and groundwater in particular, which is a significant source of drinking water.1  Additionally, UST regulations are designed to prevent damage, injury or death by combustion of stored material.

Congress began legislating the regulation of UST systems in 1984, and has since developed increasingly more comprehensive and robust regulations, with the most recent iteration established in 2015. These developments represent responses to advances in preventative technology, including leak detection and secondary containment, as well as changes in the substances being stored in UST systems. Further, congressional action on UST systems has been underscored by the goal of creating a more uniform set of regulations among state and local governments, as well as on tribal lands.2

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Significant Victory for the Building Industry: Liberty Mutual is Rejected Once Again, This Time by the Third Appellate District in Holding SB800 is the Exclusive Remedy

By: Richard H. Glucksman and Ravi R. Mehta
December 8, 2016

I. Elliott Homes, Inc. v. Superior Court (Certified for Publication, Cal. Ct. App. Dec. 2, 2016

The California Court of Appeal for the Third Appellate District recently elaborated on the scope of the Right to Repair Act, commonly known as SB-800 (“Act”).  In Elliott Homes, Inc. v. Superior Court of Sacramento County (Kevin Hicks, et al.) (certified for publication, Cal. Ct. App. Dec. 2, 2016), the Court considered whether the Act (and specifically the Act’s pre-litigation procedure) applies, when homeowners  plead construction defect claims based only on common law causes of action, as opposed to violations of the building standards set forth in the Act (Civil Code §896).  The Court answered this question affirmatively.

The homeowners of seventeen (17) single-family homes filed a Complaint against the builder of their homes, Elliott Homes, Inc. (“Elliott”), alleging common law causes of action for construction defects.  Elliott filed a motion to stay the litigation on the ground that the homeowners failed to comply with the pre-litigation procedure set forth in the Act.  The trial court denied the motion, agreeing with the homeowners that this pre-litigation procedure did not apply because the homeowners had not alleged a statutory violation of the Act.  Elliott appealed.  The Court of Appeal purely considered the question of whether the Act, including its pre-litigation procedure, applies when a homeowner pleads construction defect claims based on common law causes of action, and not on statutory violations of the Act’s building standards.

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UPDATE – McMillin Albany LLC v. Superior Court

By: Richard H Glucksman and David A. Napper                                     September 30, 2016

The matter has been fully briefed and the construction industry is one step closer to receiving the California Supreme Court’s highly anticipated decision regarding McMillin Albany LLC v. Superior Court (2015) 239 Cal.App.4th 1132.  The Supreme Court will address the split of authority presented by the Fifth Appellate District Court’s holding in McMillin Albany, which outright rejected the Fourth Appellate District Court’s holding in Liberty Mutual Insurance Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98.  The issue is whether the Right to Repair Act (SB800) is the exclusive remedy for all defect claims arising out of new residential construction sold on or after January 1, 2013.  Oral argument is still pending, and CGDRB will continue to closely monitor the progress of this case.  Stay tuned.

Primary Defense Obligations Inescapable Despite Escape Clauses According to California Court of Appeal

By: Ravi R. Mehta and Katherine J. Flores
May 10, 2016

In general, insurers are permitted to limit the risks they assume through provisions within the policy terms.  For example, many policies attempt to preclude coverage in instances where another insurance policy providing for defense is available to the insured. California courts generally disfavor these types of “other insurance” or “escape” clauses based on public policy concerns.  In two recent decisions, the California Court of Appeal found such clauses unenforceable.

In Underwriters of Interest Subscribing to Policy Number A15274001 v. ProBuilders Specialty Insurance, Co. (2015) 241 Cal.App.4th 721, Plaintiff, Underwriters of Interest Subscribing to Policy Number A15274001 (“Underwriters”), insured Pacific Trades Construction & Development, Inc. (“Pacific Trades”).  Additionally, ProBuilders Specialty Insurance Company (“ProBuilders”) insured Pacific Trades.

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Extra Extra

All Claims for Construction Defects in Residential Construction Sold on or after January 1, 2003 are Subject to Requirements and Procedures of the Right to Repair Act (SB 800)

McMillin Albany LLC v. Super Ct. 2015 F069370 (Cal.App. 5 Dist.)

By: Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper
September 8, 2015
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In a particularly dramatic and noteworthy fashion and breaking with the Fourth Appellate District and rejecting the holding in Liberty Mut. Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98, the Fifth District Court of Appeal held that the California Legislature intended that all claims arising out of defects in new residential construction sold on or after January 1, 2003 are subject to the standards and requirements of the Right to Repair Act, commonly referred to as SB800, including specifically the requirement that notice be provided to the builder prior to filing a lawsuit.  Thus, SB 800 is the exclusive remedy for all defect claims arising out of new residential construction sold on or after January 1, 2003.

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Disclosure, Disclosure, Disclosure

A Brief Reflection Regarding the Trend Towards Heightened Disclosure Requirements in Real Property Transactions

By: Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper
September 1, 2015
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A brief reflection regarding the trend towards heightened disclosure requirements in real property transactions including the recent case of Wong v. Stoler (2015 WL 3862525), where the seller’s failure to disclose private sewer line resulted in rescission of the contract.

In a very recently published opinion in a real property disclosure case, the First District Court of Appeal in Wayson Wong v. Ira Stoler (2015 WL 3862525), held that the trial court declined to effectuate a rescission of the contract based on incorrect justifications and that its alternative remedy failed to provide the purchasers with the complete relief to which they were entitled.

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Contractor License Overview – With a Twist

By: Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper
September 1, 2015
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The California Contractors State License Board provides licenses to contractors and regulates the state’s construction activity. The California Business and Profession (“B&P”) Code Section 7031 prohibits unlicensed contractors from bringing or maintaining an action to recover compensation in any court in the state of California. Section 7031 also addresses, amongst other issues, recovery from an unlicensed contractor and when proof of licensure is required in a civil suit. In order to recover in a civil action, a contractor must allege that he or she was a duly licensed contractor at all times during the performance of that act or contract, regardless of the merits of the cause of action brought by the person. Section 7031 protects consumers who enter into agreements with contractors and promotes the public policy of having licensed, competent, and honest builders. See Montgomery Sansome LP v. Rezai (2012) 204 Cal.App.4th 786. However as further examined by the recent case of Art Womack v. David Angus Lovell et al. (2015) WL 3658066, Section 7031 also protects the builders and contractors from cagey pleading practices by Plaintiff homeowners.

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SB 652: Homeowners Required To Notify Potential Buyers Of Construction Defect Claims

By: Richard H. Glucksman and Jon A. Turigliatto
February 5, 2015

Beginning July 1, 2014, SB 652 amends the Transfer Disclosure Statement required under Civil Code §1102.6 for residential property, to ask sellers about the following type of specified claims “threatening or affecting” the property:

  1. Claims for damages by the seller pursuant to Civil Code § 910 or 914.
  2. Claims for breach of warranty pursuant to Civil Code §900.
  3. Claims for breach of an enhanced protection agreement pursuant to Civil Code §903.
  4. Claims alleging defect or deficiency in the property or common area improvements pursuant to Civil Code §910 or 914.

Newly enacted SB 652 requires the seller of residential property to disclose to potential purchasers all specified claims of damages related to construction defects, including all pre-litigation claims presented to the builder and the status of those claims.

Existing law, pursuant to SB 800, requires a homeowner to follow a mandatory procedure prior to filing a construction defect lawsuit. The process requires the homeowner to submit the claim to the builder, and then gives the builder a right to repair the defects. If the builder fails to make repairs, or the repairs are not adequate, the homeowner may proceed with the filing of a lawsuit. While existing law also requires that a seller of residential property disclose at the time of transfer anything that materially affects the value of the property, there is no requirement that a homeowner notify a potential buyer of a construction defect within the home.

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Colorado Update: Proposed Legislation Regarding HOA Condominium Defect Claims

By: Richard H. Glucksman and Jon A. Turigliatto
February 5, 2015

DISCUSSION

As part of our on-going mission to monitor and track legislatures, legal decisions and developments throughout the United States that impact our clients, we share the following brief discussion of potential tort reform legislation presented in Colorado regarding construction claims by Homeowner Associations for condominiums.

Lawmakers in Colorado formally introduced SB 220, a proposed measure requiring:

  1. Condo owners to submit to alternative-dispute resolution, such as mediation or arbitration, for any construction defect claim that occurred when the homeowner association required alternative-dispute resolution, even if the requirement no longer exists at the time the claim is brought;

  2. Notice be given prior to the purchase and sale of a condominium that the homeowner association’s may require binding arbitration of certain disputes; and

  3. The association’s board to obtain the written consent of a majority of the condo owners before a construction defect lawsuit is filed on behalf of the homeowner association (emphasis added).

Currently, in Colorado, homeowner association boards are only required to obtain two condominium owners’ consent to file a construction defect lawsuit against a developer. SB 220 would real significantly increased this requirement by requiring that the association board must obtain the written consent of a majority of the condominium owners before filing a construction defect lawsuit. This helpful requirement would have had the practical impact of reducing the number of lawsuits filed and decrease the threat of frivolous lawsuits against developers. Furthermore, it would require more construction defect claims to be resolved out of court, further discouraging homeowner associations from bringing meritless claims against developers.

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Contractors: CALGreen Energy Provisions Have Been Changed

California Contractor Operations Affected by CALGreen Energy Provisions

By: Richard H. Glucksman and Jon A. Turigliatto
February 5, 2015

Energy provisions effective July 1, 2014, instead of January 1, 2014

There have been changes to California contractors whose operations are affected by residential and non-residential energy regulations or CALGreen energy provisions. Contractors are being alerted to the change in the effective date to the 2013 California Energy Code, 2013 California Administrative Code – Chapter 10, and certain energy provisions in the 2013 California Green Building Code (CALGreen).

The original effective date of January 1, 2014, for specific sections of the 2013 triennial edition of the California Building Standards Code, Title 24, has been changed to July 1, 2014.

The California Energy Commission (CEC) experienced unanticipated delays necessitating the CEC energy related provisions. The California Building Standards Commission (CBSC) approved the CEC action and issued Information Bulletin 13-07 on December 18, 2013, announcing the delayed effective date.

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