Bill Naumann Discusses SB 800, HOA Construction Defects, Insurance, and Building Safety
Bill Naumann Discusses SB 800, HOA Construction Defects, Insurance, and Building Safety
California homeowners associations face a difficult combination of aging buildings, rising insurance costs, changing inspection requirements, and construction problems that may remain hidden for years. In a wide-ranging interview with Dave of ProTec Building Services, William H. “Bill” Naumann, founder of The Naumann Law Firm, explains how these issues intersect and what HOA boards and property managers should understand before a manageable problem becomes a costly dispute.
Bill brings more than 40 years of experience to the conversation. His practice focuses on construction defect matters, and his earlier insurance-law experience gives him a valuable perspective on the policies that may respond when a builder, developer, or subcontractor is accused of defective work.
The interview addresses California’s Right to Repair Act, commonly known as SB 800, SB 326 balcony and deck inspections, changes in construction insurance, reserve planning, water intrusion, destructive testing, mixed-use developments, board education, and the building-safety lessons associated with the Champlain Towers South collapse.
Watch the complete interview below, or continue reading for the major insights and takeaways from Bill’s conversation with Dave.
Construction Defect Law Is a Specialized Field
Bill describes The Naumann Law Firm as a boutique practice focused on construction defect cases. That concentration matters because these claims often require attorneys to coordinate with architects, engineers, building-envelope specialists, insurance professionals, contractors, HOA boards, and community managers.
Construction defect cases also frequently involve questions about insurance coverage. Bill began his career interpreting the policies builders purchased and addressing whether insurers had a duty to defend their insureds. That experience remains relevant because coverage can influence how a claim proceeds, which parties participate, and whether a proposed repair or settlement is financially realistic.
Remote court appearances, board meetings, mediations, and settlement conferences have also changed the geographic reach of this work. Although The Naumann Law Firm has long handled matters throughout Southern California, remote proceedings have made it more practical to serve associations and property owners in other parts of the state.
Why Construction Defect Cases May Move More Efficiently Today
Bill recalls an earlier era when a deposition could involve dozens of attorneys, each representing a different subcontractor or insurance interest. In some newer developments, a builder may purchase a project-specific wrap insurance policy covering multiple trades. Instead of coordinating with a separate attorney for nearly every subcontractor, the parties may deal with one or a smaller number of defense teams.
That structure can sometimes reduce duplication, expense, and delay. According to Bill, certain cases involving project-specific coverage can be resolved substantially faster than cases with fragmented insurance arrangements.
The policy structure matters. Before evaluating a potential claim, relevant questions may include:
- Is the builder still in business?
- Was a policy in effect for the project and time period at issue?
- What deductible or self-insured retention applies?
- Does the policy contain exclusions for soils, earth movement, or other conditions?
- Does one policy cover the project, or are multiple contractors and carriers involved?
Modern construction policies can be highly customized. The actual language of the applicable policies can therefore have a significant effect on the claim.
Rising Insurance Costs Create Pressure for HOA Budgets and Reserves
The interview also addresses a challenge affecting associations well beyond construction defect litigation: the rising cost and reduced availability of insurance.
Wildfires, storms, mudslides, and other large losses have placed substantial pressure on the insurance market. Bill notes that associations may face higher premiums while receiving lower limits or less favorable coverage. That combination can create a serious budgeting problem for communities whose reserve assumptions were developed before major insurance increases.
The practical takeaway is that HOA boards should review insurance projections during the reserve-planning process rather than treating prior-year premiums as a reliable forecast. Newer communities should pay particular attention to whether their initial budgets and reserves realistically account for the cost of adequate coverage.
Reserve planning also matters when physical components are older than an association was led to believe. Bill points to condominium conversions as an example: a component may be represented as relatively new even though the underlying streets, utilities, or structures are decades old. If an association begins with inaccurate assumptions about component age or remaining useful life, its reserves may be inadequate from the start.
Heavy Rain Can Reveal Defects That Stayed Hidden for Years
Extended periods of rain often function as a real-world stress test for buildings and communities. Roof leaks, window leaks, drainage failures, slope movement, foundation problems, erosion, and landslides may become visible in a matter of weeks after remaining unnoticed during dry conditions.
Bill explains that as long as construction continues, construction defect disputes will continue. Water does not need to enter dramatically to indicate a potentially serious problem. A stain, recurring dampness, efflorescence, or a small leak may be the visible symptom of a larger failure behind the finished surface.
This is why early documentation is so important. Boards and property managers should record when and where a condition appears, take photographs and video, retain maintenance and repair records, and avoid assuming that cosmetic treatment has corrected the underlying cause.
The firm’s guide to documenting leaks, cracks, and other construction defects provides additional steps property managers can use to build a clearer record.
What SB 800 Was Designed to Do
California’s Right to Repair Act, commonly called SB 800, created construction standards and a prelitigation process for certain residential construction defect claims. In general, the process gives an eligible builder an opportunity to inspect claimed defects and propose repairs before a lawsuit proceeds, although whether the law applies and how its procedures operate depend on the facts of the matter.
Bill has a particularly informed perspective because his former firm participated in the discussions surrounding the legislation. He explains that the building industry wanted an opportunity to make repairs, while homeowner advocates wanted enforceable standards and a workable remedy for defective construction.
In practice, the builder’s deductible may influence whether the right-to-repair process produces a direct repair. If the problem can be corrected within or near the builder’s deductible, the builder may be more willing to fund the work. When repairs could cost millions of dollars, however, the matter may be tendered to insurance instead. In a large community, a condition repeated across many units can transform what appears to be a small repair into a major claim.
Bill’s assessment is that the SB 800 process may work more smoothly for contained problems than for widespread defects. A builder may address part of a larger issue while the remaining conditions continue through the claim process.
Anyone evaluating a potential claim should also understand that California construction defect deadlines are not one-size-fits-all. The firm’s overview of the 10-year construction defect deadline explains why an association should not assume every claim remains available for a full decade.
Why Surface Inspections May Not Reveal the Cause
An inspector can identify staining, cracking, moisture, corrosion, displacement, or another visible symptom. Determining the cause can require a deeper investigation.
Bill emphasizes that construction defect professionals often do not know why a component is failing until qualified experts perform destructive testing. A moisture meter or infrared camera may indicate the presence of water, but it may not show whether the source is defective flashing, improperly installed waterproofing, a failed joint, inadequate drainage, or another concealed condition.
This distinction is especially important when a community is evaluating repairs. Correcting the visible damage without identifying the source may allow the same problem to return.
SB 326 Inspections and Their Limitations
The conversation also examines California’s SB 326 inspection requirements for certain exterior elevated elements in condominium projects. Bill points out that the statutory inspection process does not necessarily require destructive testing. Inspectors may use visual observations and tools such as moisture meters, but concealed framing and waterproofing conditions can remain difficult to evaluate without opening part of the assembly.
That creates a practical tension. Destructive testing may provide more complete information, but it also adds cost and requires restoration of the tested areas. The statutory approach attempts to identify safety risks without making the inspection so invasive and expensive that communities cannot reasonably complete it.
The interview was recorded before the original January 1, 2025 inspection deadline. That deadline has now passed for affected associations. For communities whose reports identified unsafe conditions, deterioration, or water intrusion, the issue has shifted from obtaining the inspection to understanding the findings and taking appropriate corrective action. The firm’s article on what an HOA should do after an SB 326 report identifies defects discusses that next stage.
Bill also explains the role of representative sampling. The law requires an inspector to reach the applicable confidence level; it does not necessarily mean every deck or balcony must be opened or examined in precisely the same manner. In construction defect litigation, experts may test a statistically relevant sample and use the results, when appropriate, to evaluate whether a condition is likely repeated throughout the project.
Sampling must be designed by qualified professionals. An association should not independently reduce the scope of a legally required inspection based on a simple percentage or informal assumption.
Decks Are Not the Only Common-Area Components That Need Attention
SB 326 brought necessary attention to balconies, decks, walkways, and other exterior elevated elements. Bill and Dave caution, however, that communities cannot allow one inspection mandate to distract them from the rest of the property.
Other components that may require regular attention include:
- Roofs and building-envelope systems
- Windows, doors, flashing, and sealants
- Site drainage, swales, and stormwater systems
- Slopes, retaining walls, and erosion-control measures
- Underground parking structures
- Pumps and mechanical equipment
- Fences, gates, and perimeter improvements
- Planters and their waterproofing systems
- Streets, sidewalks, and other association-maintained areas
The governing documents should be reviewed carefully to determine the association’s maintenance responsibilities. In the interview, Bill describes a community that did not realize it was responsible for land outside its perimeter wall. Overlooked property can create both repair costs and liability exposure.
Inspect the Entire Community Before Resolving a Defect Claim
This is one of the interview’s most important legal takeaways. A construction defect settlement commonly requires the association to release claims against the settling parties and insurers. Once a broad release is signed, the association may not be able to return later with another defect that should have been investigated before settlement.
For that reason, Bill says his team attempts to evaluate the full project, review prior inspection reports, and understand all known areas of concern before resolving a case. A focused complaint about leaking windows should not prevent the association and its professionals from asking whether the same project also has roofing, drainage, waterproofing, soil, balcony, or other common-area problems.
Boards should also be cautious when evaluating offers of a “free inspection.” They should understand who will perform the inspection, what will be examined, whether the scope is sufficient, how the work is funded, and what obligations may follow. A limited preliminary review of a specific concern is not necessarily equivalent to a comprehensive building investigation.
Board Turnover Can Make a Claim Harder to Reconstruct
Construction defects often develop over many years, while the people and companies serving a community may change repeatedly. Bill describes matters in which an association has cycled through several boards, management companies, and general counsel firms before seeking construction defect representation.
That turnover can make it difficult to reconstruct when a defect was first noticed, what the developer promised, which repairs were attempted, and what professionals previously recommended. Organized record retention is therefore critical.
Associations should maintain inspection reports, reserve studies, governing documents, plans and specifications, warranties, correspondence, meeting minutes, photographs, repair proposals, contracts, invoices, insurance records, and homeowner complaints in a system that survives changes in board membership or management.
Bill and Dave also identify board education as an industry-wide need. Volunteer directors are responsible for decisions affecting a nonprofit corporation and valuable common-area assets, yet many begin their service without formal training. Experienced management, legal, insurance, engineering, reserve, and maintenance professionals can help directors understand the issues before voting on a major repair, claim, or settlement.
Expanding Maintenance Services Can Expand Liability
Some management companies have expanded beyond administration and begun offering landscaping, maintenance, or other property services. Bill advises companies considering that model to evaluate the additional risk with their insurance professionals.
Property maintenance involves numerous trades and potential hazards. Gate failures, negligent repairs, unsafe work practices, or injuries can create liabilities that may not fit neatly within coverage written for traditional management services. A company should confirm that its insurance matches the work it actually performs rather than assuming its existing policy automatically covers every added service.
The Champlain Towers Lesson: Small Warning Signs Cannot Be Ignored
The Champlain Towers South collapse in Surfside, Florida, was a catastrophic reminder of what can happen when deterioration, water intrusion, and delayed repairs converge. Although every building and legal matter is different, Bill identifies a universal lesson: a small problem left unresolved can become a much larger and more expensive problem.
Water intrusion is especially dangerous because it can affect concealed structural materials over time. In underground parking structures, for example, white mineral deposits on a wall may indicate water moving through concrete or masonry. If the source is not corrected, prolonged moisture exposure can contribute to corrosion of embedded reinforcing steel and deterioration of the surrounding concrete.
Bill also points to planters, flat roofs, below-grade walls, and parking structures as recurring areas of concern. These assemblies depend on waterproofing materials being selected, installed, protected, and maintained correctly. Manufacturer instructions matter, and even a good product can fail when it is improperly installed or reaches the end of its service life.
The practical lesson is straightforward: investigate warning signs early. A stain on a ceiling may result from a minor issue, but it may also be evidence of a significant concealed failure. Waiting rarely makes diagnosis or repair less expensive.
Key Takeaways for HOA Boards and Property Managers
Bill’s discussion offers several practical lessons for California communities:
- Document defects when they first appear. Record dates, weather conditions, locations, resulting damage, complaints, and attempted repairs.
- Identify the cause, not only the symptom. Cosmetic repairs may conceal evidence without correcting the underlying failure.
- Review reserves using current costs. Insurance, labor, materials, inspections, and major repairs may cost far more than older studies anticipated.
- Understand the association’s complete maintenance responsibility. Review the governing documents and inspect all common-area assets, not only decks.
- Preserve institutional records. Board, manager, and attorney turnover should not erase the history of a building problem.
- Act before deadlines become an emergency. Construction defect claims can be governed by different notice requirements and limitation periods.
- Investigate broadly before signing a release. A settlement may prevent later claims against released parties.
- Use qualified professionals. Legal, engineering, architectural, insurance, reserve, and building experts address different parts of the problem.
Speak With a California Construction Defect Attorney
If your HOA has discovered recurring leaks, balcony or deck deterioration, waterproofing failures, drainage problems, cracking, slope movement, or other signs of defective construction, early evaluation can help the board understand its options before evidence is lost or a deadline expires.
The Naumann Law Firm, PC represents homeowners associations and property owners in complex construction defect matters throughout California. To discuss the circumstances affecting your property, call 844-492-7474 or contact The Naumann Law Firm online to request a consultation.
This article is provided for general informational purposes only and does not constitute legal advice. The application of SB 800, SB 326, insurance coverage, inspection requirements, and construction defect deadlines depends on the specific facts and law governing each matter. Consult our qualified California attorney regarding your circumstances.