Real estate exposure

Your Liability If Work You Performed Is Discovered After a Sale

A contractor and a home’s current owner don’t need a contract for a duty to exist between them. California courts use a multi-factor test to decide when that duty attaches to work performed for someone else, years before the eventual buyer ever appears.

How this situation typically arises

The pattern is consistent: a contractor performs work — a remodel, a repair, an addition — for a property owner. Years later, that owner sells the property. The buyer later discovers a problem connected to the original work: a leak traced to a repair, a structural issue tied to an addition, a code violation that was never corrected. The buyer sues the seller, and often names the original contractor as well, even though the contractor’s only contract was with the seller, not the buyer.

This raises a threshold legal question before any facts about the work itself matter: does a contractor owe any duty at all to a buyer they never had a contract with? Under California law, the answer can be yes.

The legal test: duty without privity

California’s leading case on imposing a duty toward a non-privity third party is Biakanja v. Irving (1958) 49 Cal.2d 647. The California Supreme Court set out six factors courts weigh to decide whether a duty of care extends beyond the parties to a contract:

1. The extent to which the transaction was intended to affect the plaintiff

2. The foreseeability of harm to the plaintiff

3. The degree of certainty that the plaintiff suffered injury

4. The closeness of the connection between the defendant’s conduct and the injury suffered

5. The moral blame attached to the defendant’s conduct

6. The policy of preventing future harm

The California Supreme Court applied these factors in Beacon Residential Community Assn. v. Skidmore, Owings & Merrill LLP (2014) 59 Cal.4th 568, holding that a principal architect owed a duty of care to future homeowners even without a direct contractual relationship. Beacon is an architect case — its holding runs against a design professional, not a contractor. Extending that reasoning to a contractor’s own work is a doctrinal inference courts could plausibly draw using the same Biakanja factors, not a rule Beacon itself established for contractors. No published California case has been confirmed applying this exact framework to a contractor defendant in a concealed-prior-work fact pattern — see the standing note under Build Notes.

What actually drives exposure up or down

Applying the Biakanja factors to a contractor’s situation, the same underlying facts tend to move the analysis in predictable directions:

Factors that tend to increase exposure:

The contractor knew about a defect or code issue in their own work and didn't disclose or correct it
The problem is directly traceable to the specific work performed (a strong “closeness of connection” showing)
The work was the kind a future buyer would obviously rely on (structural, electrical, plumbing — not cosmetic)
The harm was reasonably foreseeable at the time the work was done

Factors that tend to reduce exposure:

The work was permitted, inspected, and signed off by the local building department
The defect arose from something outside the contractor's work — later renovations, deferred maintenance, or a different trade entirely
Substantial time and independent intervening events separate the original work from the harm
The contractor had no actual knowledge of a problem at the time the work was completed

What this page doesn't cover

This page explains whether a duty can exist — not what a contractor’s specific defenses look like once one does. Three related questions get their own pages in this pillar:

Whether an “as-is” clause in the sale contract changes anything — see “Does an ‘As-Is’ Clause Protect You as the Contractor?”
Whether the work falls under SB 800's builder framework instead of this common-law duty analysis — see “Are You a ‘Builder’ Under SB 800 or Just a Hired Contractor?”
Whether the economic loss rule bars the claim entirely — see “The Economic Loss Rule: Your Best Defense Against a Pure-Economic Claim”

Before you ask

Questions contractors ask first.

Can I be sued by someone I never had a contract with?

Yes, potentially. Under Biakanja v. Irving (1958) 49 Cal.2d 647, California courts can impose a duty of care on a party toward a non-privity third party by weighing six factors, including foreseeability of harm and the closeness of the connection between the conduct and the injury.

Does the Biakanja test apply the same way to contractors as it does to architects?

Not automatically. Beacon Residential Community Assn. v. Skidmore, Owings & Merrill LLP (2014) 59 Cal.4th 568 applied the Biakanja factors to hold a principal architect owed a duty to future homeowners. Extending that specific holding to a contractor is a reasoned inference from the same factors, not a rule Beacon itself decided for contractors.

Does getting the work permitted and inspected protect me?

It helps, though it isn’t automatic protection. A permitted, inspected, and signed-off job weakens the “moral blame” and “foreseeability” factors in a duty analysis, and can support other defenses depending on the specific claim. It doesn’t eliminate the underlying question of what the contractor knew and disclosed.

Talk to an Attorney Today

Talk to an Attorney Today if you’ve been contacted about a property you worked on years ago — or Request a Consultation to understand this exposure before it becomes a problem.