Legal Question in Real Estate Law in California

The builder is not technically required to provide you with ANY warranty, except to pass on the warranties that come with manufactured products, such as the dishwasher, stove, etc. Sometimes components such as pre-fabricated windows have manufacturer's warranties as well. However, California Civil Code section 896, 897 and 900 provide specific quality standards that new construction must meet. Different components of the structure have different time limits in which you can sue for them being defective. They range from one year for fit and finish of carpentry, for example, to four years for plumbing, five for paints and stains, and ten for latent defects in major structural components.

These are "statutes of repose," meaning the time limits run from when the defective construction is completed (technically close of escrow, or the date a notice of completion is recorded so there is no fighting over construction dates). That is different from statutes of limitations, which run from when an injury, loss or damage is known. You will, however, generally only have one to four years from when a defect is discovered. You also are required to give the contractor notice and an opportunity to repair any defects before you sue.

Civil Code section 901 provides that a builder may but is not required to give a warranty that covers more or extends longer than the Code requires, but the builder is not required to offer anything more.

As far as what they should keep to, from a legal standpoint until you have a signed purchase and sale contract, what they say during negotiations doesn't matter. Their legal obligations regarding quality of construction are only what is put in a contract and the code provisions in Civil Code sections 895 through 945.5.

So, my recommendation is that you do two things. First, read Civil Code sections 896, 897 and 900, to see what rights you have without any warranty at all. Then see if the builder is offering anything better, longer or more comprehensive than that. Also look at what third party "warranty" coverage is available. Technically those "warranties" are insurance. The benefit is that they are backed by an insurance company with money to pay for repairs, whereas your builder may retire, go out of business, or just not be able to pay for any major problem down the road. The downside is that home warranty insurance is usually more limited in coverage than you would imagine without reading the fine print, and 9 times out of 10 costs more than if you just banked the premiums and paid for the repairs that come up if the builder is out of the picture.

All in all, beyond what the Code provides, it is just a risk benefit analysis, and not an easy one to make. Only you can decide how risk averse you are and what you are willing to pay for what level of protection. Just make sure you know exactly what you are getting and what you are not, for how much, before you pay for anything beyond what the Code requires.

The ten (10) year is the outer limit upon which you can sue for construction defects. It applies to hidden defects, called latent defects. A four (4) year statute applies to "patent" defects. A latent defect becomes a patent defect when it is discovered. There is no warranty.