SB 800 – Consumer Protector or Cause for Concern

If you live in Playa Vista or have been in the market, you probably have heard of SB 800, which is the abbreviation for a California senate bill passed last decade, also known as the “fix it” law. It serves to establish a claims process for which “building defects” can be addressed by home purchasers within the first 10 years after new construction. It currently affects Paraiso, Lofts, Villa d’Este, and other Playa Vista complexes.

While this legislation was meant to protect home buyers, it has created many unintended consequences and many laws do. First, it has created a class of attorney I have dubbed “HOA Chasers.” This type of attorney akin to ambulance chasers and can be found at HOA meetings in Playa Vista telling people that making a claim, and most likely a lawsuit, under this law is the thing to do. SB 800 lends itself to home owner association vs. developer litigation creating a claim for any imperfection or wear and tear on their property, large or trivial, and opportunistic attorneys have capitalized on this.

Additionally, SB 800 litigation drives down property values in complexes where it is supposed to protect value. Not only does it unnecessarily scare buyers who may think they are purchasing a property with structural problems and deserve a major price break, it makes financing difficult, eliminating the possibility of FHA or lower down payment conventional financing and significantly reducing the pool of qualified buyers in these already tough economic times. This reduced pool of buyers and feeling that the property may be damaged goods has caused sharp price declines in complexes in Playa Vista where this exists. This litigation also adds to developers’ legal costs, which will trickle down to home buyers resulting in increased prices for new construction properties. Isn’t it time this senate bill is more strictly defined to prevent frivolous claims with harmful unintended consequences?