I Bought a Newly Built Home From a Developer in Atherton or Palo Alto, and After Moving In I Found Leaks and Cracks — Can I Still Go After the Builder, and How Many Years Does the Warranty Actually Cover?

Direct Answer

Usually, yes. Under California's SB 800, leaks and structural cracks can generally be pursued for 10 years, while irrigation and drainage get just 1 year. Before any lawsuit, you must give the builder written notice and let the statutory repair process run.

Who this article is for

• You recently bought a developer-built spec home in Atherton, Palo Alto, Menlo Park or Los Altos, and since moving in you have found water intrusion, cracked walls or foundation, or plumbing trouble. You want to know whether it is still early enough to go after the builder.
• You bought a three- to five-year-old home from its first owner and want to know whether the original builder's obligations passed to you with the title.
• You are touring new construction above $5M and preparing an offer, and you want to settle who answers for defects, and through what process, before you sign.
• You bought land and hired a general contractor to build a custom home, and you want to understand how your protections differ from a spec home buyer's.
• You live overseas or out of state, or hold the property through a family office or trust, and need a clear framework of deadlines to hand to your attorney and property manager.

Three things that decide your claim

When a new home develops problems, whether you can pursue them, for how long and by what route comes down to three questions: how you acquired the house, what kind of defect it is, and whether the responsible party still exists. Misjudge any one of the three and the deadline may already have passed.

One: bought finished from a builder, or built for you — two different rulebooks

A spec home falls under SB 800. Civil Code §896 opens by stating that this body of law applies to original construction intended to be sold as an individual dwelling unit. Under §911, a builder includes the developer, general contractor and original seller, so long as that party was in the business of selling residential units to the public at the time of sale. Section 938 narrows it further: the seller must have signed the purchase agreement on or after January 1, 2003. A developer who tears down an older house in Atherton or Palo Alto, builds new and lists the result for sale is the textbook SB 800 case.

The protection survives a resale. Section 945 makes its standards, rights and obligations binding on all original purchasers and their successors in interest. Buy a 2023-built home from its first owner and you stand inside the same SB 800 framework; you simply inherit whatever time is left. In McMillin Albany LLC v. Superior Court (2018), the California Supreme Court confirmed that SB 800 is the virtually exclusive route for defect claims on new homes. Owners cannot sidestep its prelitigation procedures by suing the builder directly in negligence or on other common-law theories. Section 943 does preserve separate claims to enforce express contract terms, and for fraud and personal injury.

A custom home usually runs on the contract. If you own the land and the house was built under a construction contract you signed with a GC, it was never built for sale, and it generally sits outside SB 800. Your footing is the construction contract itself plus the general limitations periods in the Code of Civil Procedure: 4 years for breach of a written contract (CCP §337(a)), and for latent defects you could not see, a 10-year outer limit from substantial completion (CCP §337.15). CCP §337.1 sets a 4-year outer limit for patent, visible defects, but subdivision (f) expressly excludes owner-occupied single-family homes. That does not mean no limit applies; the general limitations periods are still running.

There is gray area between the two. An owner may claim to have built for personal use and then sell soon after completion, or a developer may sell you the lot and have an affiliated company build the house. Whether either counts as a sale by a builder is a question for an attorney reading the actual documents.

Two: what kind of defect it is — which sets how long the clock runs, and when it started

SB 800 uses two different starting points. Most buyers remember only the number 10.

The first is the general limit in §941: 10 years from substantial completion of the home, and no later than the recording of a valid notice of completion. Every item in §896 without its own stated period, including water intrusion, structural, soils and fire protection, is measured this way. The clock tracks when the house was finished, not when you bought it. If a spec home sat on the market for eighteen months after completion, a year and a half of those 10 years was gone the day you got the keys.

The second is the set of shorter category limits in §896, measured from close of escrow. Section 895(e) defines close of escrow as the date of transfer between the builder and the original purchaser. That matters a great deal to resale buyers. On a new home first sold in 2024, the 4-year limit for plumbing operation ends in 2028, even if you bought it in 2026.

Two kinds of problems sit on neither clock. Fit and finish on cabinets, flooring, countertops and paint finishes falls under the written warranty in §900 rather than the SB 800 standards. And a defect in a manufactured product on its own, such as an appliance that simply fails, is excluded from SB 800 by §896(g)(3)(E); that is a matter for the manufacturer's warranty.

Three: when something goes wrong — who to pursue, and in what order

The order is set by statute. Before suing, §910 requires written notice to the builder by certified mail, overnight mail or personal delivery, with your name, address and contact information and a reasonably detailed description of the nature and location of the problem. The sequence then runs as follows. The builder acknowledges receipt in writing within 14 days (§913). It completes an initial inspection and testing within 14 days of acknowledgment, and any second inspection within 40 days of the first (§916). Within 30 days of inspection, it may make a written offer to repair, naming the contractor who will do the work with that contractor's license number, and compensating for the losses listed in §944 (§917). You have 30 days to accept, or you may ask the builder for up to three additional contractors it does not control (§918). Work must begin within 14 days of acceptance, with every effort to finish within 120 days (§921). A builder may also decline to repair and offer cash instead, conditioned on a reasonable release (§929).

The deadlines bind the builder just as tightly. If it fails to acknowledge, inspect or make an offer on time, or does not complete repairs as scheduled, the owner is released from the process and may sue directly (§915, §920, §925). Section 914 also lets a builder elect, in the purchase agreement, to use its own contractual procedure in place of the statutory one, and that election is binding once made. Which of the two your signed documents specify determines the path you will have to take.

There may be more than one party to pursue. Many spec homes are held and sold through a single-project LLC, and it is not unusual for that LLC to be dissolved once the project is done. Dissolution does not erase liability. Under Corporations Code §17707.07, claims against a dissolved LLC may be enforced against its undistributed assets, expressly including insurance assets, and against members to the extent of assets distributed to them. Claims against members must be brought before the earlier of the limitations period expiring or four years after the dissolution took effect. SB 800 §936 separately holds general contractors, subcontractors, material suppliers and design professionals liable to the extent their negligence or breach caused a violation of the standards.

Section 944 lists what can be recovered: reasonable repair costs, losses caused by the repair work, relocation and storage expenses, reasonable investigative costs and more. Section 943(b) caps recovery on single-family homes, however, at the reasonable value of repairing the violation, meaning the lesser of the repair cost or the resulting loss in the home's value (subject to the common-law exception for personal use).

The numbers: time limits for each SB 800 defect category

The headline figures first. Under Civil Code §896 and §941, water intrusion, structural, soils and fire protection defects have no separate limit and take the general 10-year period from substantial completion. Plumbing and sewer operation, electrical operation and cracked exterior walkways and driveways run 4 years; paints and stains 5 years; dryer ducts and landscaping 2 years; and irrigation and drainage only 1 year. Each of those shorter periods runs from the builder's close of escrow with the first buyer.

"Substantial completion" refers to the term as used in §941, no later than the recording date of a valid notice of completion. "Original close of escrow" refers to the close of escrow between the builder and the first buyer as defined in §895(e). The table summarizes the current statutory text and excludes tolling and other exceptions.

What to take away. First, the clocks on problems inside the same house can differ tenfold. Water seeping behind a shower wall falls under §896(a)(17) and has 10 years; a failed irrigation system in the same yard that floods the lawn has 1. Second, neither starting point favors a resale buyer. The 10-year period runs from substantial completion and the category limits run from the first buyer's closing; none runs from your own. Third, there is a quieter hurdle well before any deadline. Section 945.5(b) gives the builder a defense where the owner unreasonably failed to minimize or prevent damage in a timely way, including by not giving the builder timely access to inspect and repair. Sitting on a problem without reporting it or containing the damage can, by itself, shrink what you recover.

What we see in the field

A $20M-range new build: however long the claim period, it never beats a sharp look before signing

In May 2026, MK Group toured a newly built Atherton estate in the $20M range with the decision-maker for a cross-border family office. He was pressed for time and flying home the next day. The floor plan worked, the neighborhood was sound, and on paper the house was hard to fault. He asked for our read on the spot.

The answer was a candid one: the house had everything going for it except the workmanship, which was rough for a $20M property. It read more like a spec home a builder had rushed to market than a residence finished for long-term ownership. The client passed on it, no deal was made, and he said he would continue the search when he returned to Silicon Valley in August. Marie Wang (DRE# 02110980) and Kevin Mo (DRE# 02127623) returned to that showing in a market analysis video on Atherton prices reaching a record $10M in May: buyers above $20M have almost no tolerance for flaws, and one visible issue with the lot, the craftsmanship or a street-facing position is enough for them to walk away from the whole house.

Read against the question here, the lesson is about sequence. SB 800 gives buyers claim windows ranging from 1 to 10 years, but it answers what to do when something breaks, not whether the house was worth the price. Move into a spec home that already shows signs of being rushed, and what follows is a months-long cycle of written notice, inspection, repair offer and reinspection, lived out on what is effectively a job site. Anything you can spot during a showing should never be left to a claim after move-in. Only what cannot be seen should be handled by settling the claim path before you sign. For the workmanship details worth checking on a tour, see Two New Silicon Valley Estates, One $30M and One $10M — Where Does the Workmanship Actually Differ?

In market context: about 9% of $5M+ sales across eight cities were built in 2022 or later

The headline figures first. Per MLSListings Q2 2026 single-family closings, Atherton, Palo Alto, Los Altos Hills, Menlo Park, Los Altos, Woodside, Hillsborough and Saratoga recorded 249 sales at $5M and above. Of those, 23, or about 9.2%, carried a year built of 2022 or later. Those 23 sales closed at a median of about $8.11M, above the roughly $6.81M median for all $5M+ sales across the eight cities.

Source: MLSListings closed single-family sales in Santa Clara and San Mateo counties, CloseDate 2026-04-01 through 2026-06-30, processed through the MK Bay Area Pulse 2026 Q2 pipeline. "Built 2022 or later" counts listings with a YearBuilt field of 2022 or later and cannot show whether the seller was the builder. City samples range from 15 to 47 sales.

What to take away. Of the 23 sales, 16 list a year built of 2026 and 4 list 2025, so nearly all of them reached the market shortly after completion. When those buyers got the keys, every SB 800 clock was still close to its start, which is exactly the moment to be clear on the process and on who you would pursue. By city, nearly a third of Menlo Park's $5M+ sales were recent new construction, and about 15% of Atherton's. In the same quarter, not one $5M+ sale in Los Altos Hills or Hillsborough was built in 2022 or later. Buy at this price point in the first two cities and your odds of ending up in new construction are markedly higher.

Common misconceptions

One: "I filed a request in the builder's warranty portal and sent emails, so I've given notice"

You have not. Section 910(b) is direct on this: an owner may report problems through the customer-service procedure in the builder's contract, warranty or other documents, but that request does not satisfy the statutory notice requirement. Statutory notice must be delivered to the builder by certified mail, overnight mail or personal delivery, must state that it is a claim for violation of these standards, and must reasonably describe the nature and location of the problem. Keep using the portal in parallel, but whether your deadline is preserved, and whether the builder's 14-day acknowledgment period has started, turns on that formal notice. Where it goes is also set by law. Under §912(e), the builder must maintain an agent for notice registered with the California Secretary of State, or tell the owner in writing of a designated third party to receive it. A resale buyer without the original sale documents can look up the builder's registered notice agent through the Secretary of State.

Two: "A new home comes with a 10-year warranty, so anything that goes wrong in 10 years is covered"

Ten years is only the default for items without their own limit. Section 896 gives plumbing and electrical operation and cracked exterior driveways and walkways 4 years, paint 5 years, dryer ducts and landscaping 2 years, and irrigation and drainage 1 year. Fit and finish is covered by a written warranty of at least 1 year under §900. The easier thing to miss is the starting point: the 10 years run from substantial completion, and the category limits from the builder's close of escrow with the first buyer. None of them starts the day you move in.

Three: "If something's wrong with the house, going straight to a litigator is the fastest route"

Skipping the process is often the slowest route. In McMillin Albany (2018), the California Supreme Court upheld the builder's motion to stay the lawsuit precisely because the owners had not first gone through SB 800's notice, inspection and repair procedure; §930(b) likewise lets a builder seek a stay when an owner has not complied. The reverse also holds. If the builder misses its own statutory deadlines, failing to acknowledge within 14 days or to inspect or offer repairs on time, the owner is released from the process and may sue directly. The real value of an attorney is getting the process right from the very first notice.

Four: "The builder's LLC has been dissolved, so there's no one left to pursue"

Dissolution makes a claim harder, not impossible. Corporations Code §17707.07 allows claims against a dissolved LLC's undistributed assets, including insurance assets, and against members to the extent of assets distributed to them. Claims against members, however, must be brought before the earlier of the limitations period expiring or four years after dissolution. SB 800 §936 also makes general contractors, subcontractors, material suppliers and design professionals answerable for the problems each of them caused. The real exposure is timing: overlook the date the LLC was dissolved, and the window to pursue its members can close before you ever find the defect.

Five: "I bought a newer home from its first owner, so SB 800 has nothing to do with me"

It does. Section 945 makes SB 800's rights and obligations binding on original purchasers and their successors, so resale buyers can assert them too. What you inherit, though, is the time remaining. The 4-year, 2-year and 1-year category limits run from the builder's closing with the first buyer and may be nearly spent. Section 912(h) requires the builder to advise the first buyer to pass the home's documents on to later owners, so ask the seller for them when you write your offer. If they cannot be produced, you can request them from the builder, who must provide them within 30 days of a written request (§912(a)–(d)). A resale seller's duty to disclose known defects is a separate track, covered in Selling a Bay Area House — Which Problems Must Go Into the Disclosures, and Can a Buyer Sue Me If I Leave One Out?

Six: "A custom home I built with my own GC is protected by SB 800 too"

Usually it is not. SB 800 governs homes built for sale. A house on land you bought, under a construction contract you signed, is pursued on that contract and the general limitations periods: 4 years on a written contract (CCP §337(a)), with latent defects subject to a 10-year outer limit from substantial completion (CCP §337.15). In practice, nearly all of a custom home owner's protection lives in the contract. Warranty length, how a defect is defined, arbitration versus litigation, and how far the GC's insurance reaches all need to be negotiated before ground is broken. The contractor bond the CSLB requires is just $25,000 (Business and Professions Code §7071.6), which offers essentially no cover against defect repairs on a multimillion-dollar home.

Next steps

1. Before you write an offer, check the CSLB license: pull the general contractor's license number from the permit records or the seller's documents, then look it up at cslb.ca.gov. Confirm whether the license is active, its classification (new homes are typically Class B, General Building), its bond and workers' compensation records, and any public disciplinary actions.
2. Find out whether the seller is a single-project LLC: search the selling entity on the California Secretary of State's bizfile Online and note its formation date, current status (Active, Suspended, Terminated and so on), the managers or members listed on its Statement of Information, and its agent for service of process. Also confirm the builder's SB 800 notice agent registered under §912(e), which you will need if you ever serve a §910 notice. If the LLC was formed almost exactly when construction began and carries the street address in its name, expect it to be dissolved once the house sells, and ask up front whether the project carries liability insurance that remains in force.
3. Read which process the contract elects: confirm whether the builder chose the statutory repair process or its own contractual alternative under §914, whether an enhanced protection agreement is attached (§901–903), and whether there is an arbitration clause. Check the preliminary title report for the procedure notice the builder must record under §912(f), and request the plans, soils reports, maintenance recommendations and product warranties available under §912(a)–(d).
4. Start a file the day you move in: maintain the home according to the builder's and manufacturers' written maintenance requirements and keep records, since §907 and §945.5(c) make failure to maintain a builder defense. When a problem appears, photograph it and log the date right away, then have your attorney assess it and serve a §910 written notice by certified or overnight mail rather than relying on a portal ticket. For the other dated tasks to calendar in the first weeks after closing, see I Just Closed on a $5M+ Home in Atherton or Palo Alto — What Do I Do in the First 12 Weeks?
5. For a custom home, write the protection into the construction contract: before work begins, agree with your GC on the length and scope of the written warranty, the process for giving notice of and repairing defects, how disputes will be resolved, certificates of insurance for the GC and major subcontractors, and the plan for recording a notice of completion. That date will set when the 10-year outer limit on latent defects begins.

This article is written for decision-making education and is not legal or tax advice. Whether SB 800 applies, when each time limit starts or is tolled, whether a builder's alternative procedure is enforceable, the extent of liability for a dissolved LLC and its members, insurance coverage, and the enforceability of custom home construction contract terms all depend on the specific documents and facts. Confirm with your attorney before serving any statutory notice or filing suit.