January 12, 2001
The Aas v. Superior Court decision is GOOD for all homebuyers. It's good because builders might start building condos again. It's good because insurance providers may start insuring condos again. It's good because renters may be able to start buying condos again. Condos are needed for Smart Growth. Condos are needed to limit sprawl/protect the environment.
California, especially San Diego County, desperately needs affordable housing. All the court ruling really did was prevent our already outrageously expensive and under-supplied housing market from getting worse! For all of these reasons, the ruling is good for home buyers.
The ruling stopped an additional layer of abuse by construction dispute litigation plaintiff attorneys. Future home buyers already suffer from a lacking condo supply and high prices. Most of the time, even the home owners involved in this type of lawsuit suffer because the attorneys inflate the claims, exaggerate the defects, and after they take their cut, leave the association and owners with insufficient funds to make any legitimate repairs. Meanwhile, the owners suffer from property value loss, inconvenience and serious disruption to their home life. Allowing the attorneys to sue for some future, hypothetical problem would only worsen the problems, and certainly result in fewer or more expensive condos.
Condos are a vital part of our housing stock. They are the affordable home ownership option: the bridge from renting to owning. They also used to represent half of our entire housing supply. Today, they are less than 20% with most of the units built as high-rise, expensive condos. Monday's ruling has the potential to slowly bring back the condo.
Just when you thought it couldn't get any worse up springs the defeated attorney in the Aas. v. Superior Court case. Talk about a sore loser! This attorney tried to sue a home builder for the value of some homes that exhibited no damage. They claimed code violations, but everyone admitted there was no damage to the homes. The attorney lost his claim for "economic loss" at every level of California courts. He lost in Superior Court, and again in the Appellate Court, so he appealed to the California Supreme Court.
The Supreme Court said no. The court ruled that "home buyers in California already enjoy protection under contract law and warranty law... under the law of negligence and strict liability..., as well as an exceptionally long 10-year statute of limitations for latent construction defects." The case was not about quality, and it did nothing to diminish consumer rights. This ruling is only bad for greedy trial attorneys.
California has the toughest consumer protection laws governing new homes. We are the ONLY state in the nation with strict liability AND a 10-year statute of limitations for latent problems.
In response to the ruling, the public and media are now facing the shameless propaganda machine of the trial attorneys involved with construction disputes. They lost in court, and are now trying to appeal to the court of public opinion. The trial attorneys are now spinning their defeat as a "bad day for homeowners." They pretend to protect consumer rights. Nice try. Most people can see through their lies. Greedy trial attorneys don't like it because it cuts into their legal fees from frivolous, abuse lawsuits against home builders. This case was not about quality. It was about exploiting the code (and the home owners) for profit.
The court simply answered this question: Should home-owners and a homeowner's association be able to recover damages in negligence from a developer, contractor and subcontractors who built their dwellings for construction defects that have not caused property damage. Simply put, there will be no money for damage that may arise. It's called common sense. You can't make someone pay for something that might happen in the future. Where would it end? Think about it. The potential for abuse is overwhelming.
The California Supreme Court ruling in the Aas case was a common-sense ruling. Today's runaway litigation must stop somewhere. This decision is a great start.
George Dale, Dale Braden & Hinchcliffe, APLC;
Jerry Livingston, BIA San Diego County;
Michael Pattinson, Barratt American;
Suzanne Martin, Dale, Braden & Hinchcliffe, APLC;
Bruce Wick, Wick Risk Management;
Fred Martin, Martin Roofing;
Steve Doyle, Brookfield Homes.