Can a Builder obtain a Release for Money Instead of making Repairs?

screen-shot-2016-10-11-at-4-43-38-amOne of the protections under the statute for 海南福彩app下载owners and associations is that a builder cannot obtain a release for the payment of money unless it is reasonable. In addition, when a builder makes repairs, it cannot do so in exchange for a release.

Civil Code §926 – Release or waiver in exchange for repair work provides that: “The builder may not obtain a release or waiver of any kind in exchange for the repair work mandated by this chapter. At the conclusion of the repair, the claimant may proceed with filing an action for violation of the applicable standard or for a claim of inadequate repair, or both, including all applicable damages available under Section 944.”

But don’t forget to read Civil Code §929 – Cash offer in lieu of repair; release which provides: “(a) Nothing in this chapter prohibits the builder from making only a cash offer and no repair. In this situation, the 海南福彩app下载owner is free to accept the offer, or he or she may reject the offer and proceed with the filing of an action. If the latter occurs, the standards of the other chapters of this title shall continue to apply to the action.

(b) The builder may obtain a reasonable release in exchange for the cash payment. The builder may negotiate the terms and conditions of any reasonable release in terms of scope and consideration in conjunction with a cash payment under this chapter.”

There is one case so far that interprets releases under the statute. It is Belasco v. Wells (2015) 234 Cal. App. 409. In this case, a 海南福彩app下载owner received $25,000 in exchange for a release from a builder under the statute. The 海南福彩app下载owner took the money and then filed a lawsuit. The 海南福彩app下载owner argued that the provisions of the statute do not allow for a release. The trial court and the Court of Appeal disagreed.

The Court found that the 海南福彩app下载owner, an attorney, knowingly accepted the money in exchange for a release. The court did not find any fraud to void the release and upheld the release.

The lesson to be learned is that if you sign a release it may be enforceable. The statute is designed to protect 海南福彩app下载owners from unwittingly signing a release for their entire 海南福彩app下载 if they are paid for one item. For example, before SB800 was enacted, builders would offer a 海南福彩app下载owner $500 for their door and get a general release for the entire house. This is unreasonable. The statute makes this unenforceable but it does allow for the payment of money in exchange for a release if it is reasonable.

Leave a Reply

Your email address will not be published. Required fields are marked *