California’s push to overhaul condominium construction defect liability stalled at the finish line. The bill passed the state Senate late Sunday night, but the session expired without a vote in the General Assembly.
Assembly Bill 1903 lost forward momentum after making its way through a legislative amendment grinder. Multiple changes sent the bill back and forth between chambers, even in its final days.
California YIMBY, a pro-housing advocacy group, pushed AB 1903 among several bills this year. The organization fumbled one, but managed to propel other housing bills to Gov. Gavin Newsom’s desk.
California has spent years trying to address housing affordability by encouraging more housing types. Housing advocates hoped to resurrect languishing condo construction by amending the state’s 2003 Right to Repair Act.
A related bill would have raised liquidated damages when buyers walk away from a sales contract. The California Association of Realtors stalled that bill in committee.
Condo defect reform initially seemed likely to pass. It cleared the Assembly in May with no “no” votes. The Senate, however, had other ideas and grafted significant amendments to the bill, starting in the Senate Judiciary Committee over the summer.
The bill picked up additional floor amendments in the final days of the current legislative session. Senators approved the revised text and sent it back to the Assembly. Those late changes built on the narrowing the bill underwent earlier in the Senate Judiciary Committee.
Issues with the bill
Consumer attorneys, HOA groups and other advocates teamed up to oppose AB 1903. They argued the original bill would have made it harder and more expensive for homeowners to uncover widespread defects and pursue claims before the damage became severe. They said it shifted risk from builders to homeowners.
Notably, the Senate committee’s own analysis undercut one of the bill’s central premises. Condo production has fallen sharply in California since a post-2007 peak, but the Senate analysis found litigation isn’t the main reason. The committee’s identified list of culprits includes rising labor and material costs, permitting requirements and fees, and regulatory hurdles.
Local opposition to housing, financing availability and buyer demand also play a role, along with land values and construction timelines. Outside research cited by the committee concluded that defect litigation adds cost but isn’t the “sole or even the primary cause” of weak condo development.
The setback occurred despite broad bipartisan support and continued industry pressure to ease liability rules. With both major condo bills sidelined, lawmakers and industry groups are expected to regroup. Pressure to address California’s condo-supply shortfall hasn’t eased.
“We will continue to work on construction defect reform to help build more starter homes residents can afford,” California YIMBY posted on social media.
