A buried provision in California's construction defect law could affect your lease, your landlord's obligations, and your long-term occupancy security.
Most gym and fitness studio owners in California don't realize that a provision buried in AB1903—a bill focused on construction defects—could reshape the legal landscape around the buildings they occupy or own.
Here's the situation: If you lease space in a condominium project or townhouse development built on or after January 1, 2027, the builder's liability for construction defects just got shorter. Understanding this matters because it affects how long your landlord can pursue claims against the builder, which indirectly affects the stability and maintenance of your building.
California law has long required builders to repair construction defects when discovered. Historically, once a builder completed repairs, owners and associations could not be forced to sign away their right to sue—they kept that option indefinitely.
AB1903, enacted in 2026, repeals that protection. Under the new rule codified in Civil Code Section 926, builders can now obtain a full release from liability one year after completing repair work. Once that release is signed, the homeowner's or association's right to sue the builder is extinguished, and the builder's ongoing liability is capped.
This applies specifically to condominium projects and townhouse developments constructed on or after January 1, 2027.
If your fitness business occupies a unit in a newer condo or townhouse project, your landlord—the unit owner or the homeowners association—now faces a tighter deadline to pursue construction defect claims. Once the builder completes repairs and the one-year window closes, that avenue closes permanently.
This affects you indirectly but meaningfully. Construction defects—faulty HVAC systems, structural issues, water intrusion, electrical problems—don't always show up immediately. If your landlord misses the window to pursue a claim, and a serious defect emerges later, the cost of repair falls on the property owner, not the builder. That cost could translate into higher rent, deferred maintenance, or pressure to sell the property.
For studio owners who own their own condo or townhouse unit outright, the impact is direct: you have one year from the builder's completion of repairs to decide whether to accept a release. After that, you lose the ability to sue for defects discovered later.
If you're leasing space in a newly constructed condo or townhouse project, ask your landlord about any outstanding construction defect claims or repair work. Understand the timeline. If you own your unit, document any defects now and consult with legal counsel before signing any builder release—the one-year window is not indefinite.
The effective date for new projects is January 1, 2027. Existing buildings are not affected.
For a detailed, business-specific guide to how AB1903 affects fitness facility leases and ownership in California, a free resource is available through industry trade associations and local commercial real estate counsel.