I'm a California contractor who entered into a oral contract with another contractor (my partner) to build custom homes and do remodels.
My partner built two custom homes while we were still partners parading his clients around the custom home we were building and telling me that he was just doing some consulting work for them.
What I'm worried about is being sued for construction defect (ten years) by his clients because they knew we were partners.
My question: Does the statute of limitations run the two years for an oral contract or does it piggyback onto the construction defect statue?
1 Answer from Attorneys
There are multiple statutes of limitations for construction defect actions, all of which would apply to you if your company was involved in the construction. You also have other serious concerns based on the facts as you've presented them. Your licensing status could be an issue. You cannot "partner" up with someone as you've done without one of you either being the employee of the other or having a joint venture license issued by the CSLB (which also requires you to both have your own licenses as well). Under California law if you are not properly licensed at all times during the performance of the contract, you are not entitled to any money; the flip-side of that is if you've been paid the project owner could sue to recover any money, regardless of the quality of the work.
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