Real estate exposure
A job finished years ago doesn’t disappear when the property changes hands. This pillar covers how a California contractor’s prior work can create exposure in a later real estate sale — the legal theories involved, the defenses available, and what to do if you’re contacted about old work.
A California real estate sale runs on disclosure. A seller completes a Transfer Disclosure Statement (TDS) under Civil Code §1102 et seq., and that form often asks about known defects, prior repairs, and construction work — including work a contractor performed for a prior owner. When a buyer later discovers a problem tied to that work, the contractor who performed it can be pulled into the dispute, even without a direct relationship to the buyer and even years after the job closed.
This isn’t automatic liability. It depends on what the contractor knew, what was disclosed, how the work was performed, and which legal theory the buyer’s attorney is pursuing. The pages in this pillar walk through each of those variables.
Disclosure duties (Civil Code §1102 et seq.). California’s TDS statute governs what a seller must disclose at sale. Civil Code §1102.1 makes clear that an “as-is” sale doesn’t waive a buyer’s misrepresentation or concealment claims — codifying the rule from Loughrin v. Superior Court (1993) 15 Cal.App.4th 1188. Civil Code §1102.2 sets out the transactions exempt from TDS altogether (new-subdivision sales, foreclosure/REO, most fiduciary transfers, and others).
Concealment and fraud theory (Civil Code §§1572, 1710). The core theory a buyer uses against a contractor isn’t the TDS itself — contractors don’t sign it — it’s suppression of a known fact by someone bound to disclose it, under Civil Code §1572(3) and §1710(3). This is the theory that reaches a contractor who knew about a defect in their own work and didn’t disclose it.
Duty absent privity. A contractor who never contracted with the eventual buyer can still owe a duty of care under the multi-factor test from Biakanja v. Irving (1958) 49 Cal.2d 647, applied to a design professional’s duty to future homeowners in Beacon Residential Community Assn. v. Skidmore, Owings & Merrill LLP (2014) 59 Cal.4th 568. Beacon‘s extension from architects to contractors specifically is doctrinal inference, not a direct holding — see the standing note in Build Notes below.
The economic loss rule and its limits. Where a buyer’s claim is really about the contract, not a duty independent of it, the economic loss rule can bar recovery for purely economic harm — the rule from Aas v. Superior Court (2000) 24 Cal.4th 627. But intentional concealment can pierce that rule: Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979, and most recently Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, which lets a fraudulent-concealment claim survive the economic loss rule where its elements are independent of the contract and the conduct exposed the plaintiff to harm beyond what the parties reasonably contemplated.
The SB 800 boundary. For new residential construction, McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241 holds that the Right to Repair Act (Civil Code §§895–945.5) is the virtually exclusive remedy for construction-defect claims against a builder — which matters enormously to whether a contractor is treated as a “builder” under SB 800 or as a hired contractor outside it. That distinction is its own child page in this pillar.
(Card copy per child page — short teaser line plus link, matching the homepage pillar-card pattern. Full table below for dev/build reference; render as cards on the live page.)
Child Page
CA Law Reference
Biakanja (1958); Beacon (2014)
Loughrin v. Superior Court (1993)
McMillin Albany (2018); BPC §7044
Civ. Code §§1689, 1692, 3343, 3294
Doctrinal framework only — no case citation
H&S Code §§13113.8, 19211, 17926
Aas (2000); Robinson Helicopter (2004); Rattagan (2024)
Before you ask
Yes, potentially — California’s discovery-based fraud statute of limitations (Code Civ. Proc. §338(d)) runs three years from discovery, not from the work itself, though a 10-year statute of repose under Code Civ. Proc. §337.15 sets an outer boundary for latent construction defects.
Not automatically. Civil Code §1102.1 and the holding in Loughrin v. Superior Court (1993) 15 Cal.App.4th 1188 establish that an as-is sale doesn’t waive a buyer’s concealment or misrepresentation claims — it affects the condition the buyer is deemed to accept, not fraud claims about what was hidden.
No. McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241 makes SB 800 the near-exclusive remedy for builders of new residential construction — but a hired contractor who isn’t acting as the “builder” under BPC §7044 may fall outside that framework entirely. See the “Builder vs. Hired Contractor” child page.
Talk to an Attorney Today if you’ve been contacted about work you performed on a property that has since been sold — or Request a Consultation to understand your exposure before it becomes a problem.