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(A
version of this article will appear in the California
Construction Law Reporter, published by the West Group.)
By James E. Acret
In
the session that concluded last September, the California
Legislature showed a striking enthusiasm for new laws. More
than 5,000 bills were introduced, of which more than 1,000
passed both houses of the legislature and were signed by
the governor. Unfortunately, the quality of this flood of
legislation was much less impressive than its quantity.
Construction Defects
Of
the bills that passed, most of which went into effect on
January 1, 2003, something over a score have a direct impact
on the business of designing, building and financing construction
projects. By far the most important is SB 800, touted as
the "fix-it bill." (Civil Code §895 et seq.)
SB
800, complicated and crudely drafted, runs to about 20 pages
of close type. Its main points are to establish a list of
construction defects for which builders, contractors and
designers are legally responsible, to establish a builder's
right to repair such defects, to limit damages recoverable
by the owner for such defects, to shorten the statute of
limitations for actions seeking compensation for certain
types of construction defects, to impose a mandatory negotiation
and mediation regime, and to roll back the Aas decision
in which the California Supreme Court held that there is
no tort remedy for construction defects that have not produced
physical damage.
The
new regime is applicable only to residential projects that
closed escrow after January 1, 2003, so its full effects
will not descend upon the industry for many years.
Public Projects
Competitive
bidding requirements are relaxed for emergency repairs of
state highways. Streets and Highways Code §§136.1,
136.5.
The
State Energy Resources Commission is authorized to impose
civil penalties against power plant owners that fail to
meet construction schedules. Public Resources Code §25534.
Public
agencies are required to report to public works contractors
the receipt by the agency of any third-party claims relating
to the contract. Public Contract Code §9201.
Public
contract bids that are submitted late must be returned unopened.
Public Contract Code §4104.5. Public agencies may receive
bids on the Internet. Public Contract Code §1601. Public
agencies must accept or reject alternates before the identities
of bidders or their subcontractors are revealed. Public
Contract Code §§10126, 10780.5, 20103.8.
A
super-agency will finance and construct public projects
in San Diego. Government Code §6531. Certain community
college districts and cities are specifically authorized
to award design-build contracts in accordance with an elaborately
designed system for competitive bidding and competitive
negotiation. Public Contract Code §20175.1, Education
Code §81700.
Contractor Licenses
Protection
of the public is made the highest priority for the Contractors
State License Board. Business and Professions Code §7000.6.
Electricians
must be certified by January 1, 2005. Labor Code §3099.2.
No
trade examination will be required for limited specialty
licenses. Business and Professions Code §7065.01.
CSLB
shall check fingerprints, rapsheets and employment histories
before issuing new licenses. Business and Professions Code
§7069.
A
license bond surety that pays a claim against a contractor
may call for CSLB to initiate disciplinary proceedings against
the contractor unless the contractor reimburses the surety.
Business and Professions Code §7071.11. Contractor
license bonds will increase to $10,000 on January 1, 2004,
and to $12,500 on January 1, 2007. Bond proceeds in excess
of $7,500 are reserved exclusively for the benefit of homeowners.
Business and Professions Code §7071.6.
Rough
and finish carpentry, formerly encompassed by a single classification
("Class C-5 Carpentry, Cabinet and Millwork Contractor")
are split into two separate specialty contract classifications,
as follows:
- C-5:
Framing and Rough Carpentry Contractor. 16 California
Code of Regulations §832.05.
- C-6:
Cabinet, Millwork and Finish Carpentry Contractor. 16
California Code of Regulations §832.06.
The
definition of drywall contractor (Class C-9) was expanded
to include the installation of nonstructural metal framing
members. 16 California Code of Regulations §832.09.
The
definition of C-54 Title Contractor was expanded to include
stone tiles and natural or simulated stone slabs for bathtubs,
showers and horizontal surfaces. 16 California Code of Regulations
§832.54.
Arbitration
Arbitrators
are required to make detailed disclosures of relationships
with arbitration providers, arbitration parties and their
lawyers. Code of Civil Procedure §1281.9. Providers
of consumer arbitration may not have a financial interest
in a party or an attorney for a party. Code of Civil Procedure
§1281.92.
Arbitration
providers must disclose details of earlier arbitrations
administered by the provider for the same party. Code of
Civil Procedure §1281.96. A prevailing party in a consumer
arbitration is not allowed to collect costs or fees from
a consumer. Code of Civil Procedure §1284.3.
Judges
must disclose arrangements to serve as arbitrators and may
be disqualified. Code of Civil Procedure §170.1.
Other New Laws
New
safety requirements are adopted for the design of swimming
pools and spas. Health and Safety Code §115928.
The
Department of Housing and Community Development will develop
universal guidelines for the design of senior citizen housing.
Health and Safety Code §17959.
Plan
checkers and inspectors of residential projects are granted
immunity from liability under certain restricted circumstances.
Civil Code §43.99.
The
statute of limitations for personal injury is extended from
one year to two years. Code of Civil Procedure §335.1.
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To learn more about Thelen Reid's Construction and Government Contracts Department, click here. For more information about books and other legal materials written by James Acret, click here and enter "Acret" in the Search Products Field. To learn more about topics covered in this article, contact Paul Berning at (415) 369-7229 or at pwberning@thelen.com.
©2003 Thelen Reid Brown Raysman & Steiner LLP
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