Most residents of Southern California possess an understanding that claims for property damage and personal injury must be started before the statutory deadline for such claims expires. This deadline is known to almost everyone as the “statute of limitations.” But California law imposes another deadline that is known to very few people outside the legal profession. This deadline is called a “statute of repose”, and it ssubjects most construction-related claims to a strict 10-year deadline. The question in most cases involving the statute of repose is when the deadline begins to run.
The language of the statute
The statute of repose says that no action may be commenced against a person or a surety of such person “who develops real property or performs or furnishes the design, specifications, surveying, planning, supervision, testing, or observation of construction or construction of an improvement to real property. . . .” The statute applies to claims for latent defects in “the design, specification, surveying, planning, supervision, or observation of construction or construction of an improvement to, or survey of, real property” and claims for injury to property “arising out of such latent deficiency.”
Substantial completion defined
The statute enumerates four events that may constitute substantial completion:
- Date of any final inspection by the applicable public agency;
- Date of recording a notice of substantial completion;
- Date of use or occupation of the improvement in question; or
- One year after termination or cessation of work on the improvement.
The expiration of the 10-year period of repose effectively terminates all claims for defects in the property. The statute is intended to cut off all claims relating to defects in real property so that architects, engineers, contractors and others engaged in the design and construction of improvements to real property know that no claims can be brought against them for any work performed before the statutory deadline becomes effective.
The long view
The statute of repose offers valuable protection to the real estate development and construction industry. Anyone who may have a claim affected by the statute of repose may wish to consult an experienced construction and business attorney about the exact legal effect of both the statute of limitations and the statute of repose.