Quality assurance (QA) and quality control (QC) programs have become an essential part of modern homebuilding. From pre-pour foundation inspections to final punch list walkthroughs, builders use these processes to prevent, catch, and correct issues early. QA/QC also promotes building code compliance and delivers a better product to homebuyers.

But an important question sometimes comes up, especially in the context of construction defect claims:

If a builder’s QA/QC inspections identify an issue, or show that work was performed correctly, can those findings be used in court?

An insurance company posed this question to Paul Weckerly, our president and CEO, and former general counsel. Through the unique perspective of a seasoned attorney, he shared a surprising analysis—especially for builders in California. Turns out, the answer depends on the project’s location, the type of QA/QC inspection, and who performed the job.

California’s Unique Rule: Senate Bill 800 and Civil Code §43.99

California is an outlier when it comes to the admissibility of certain QA/QC findings in construction defect litigation.

In 2002, California passed Senate Bill 800, also known as the “Right to Repair Act.” The law sought to reduce litigation by creating a process for homeowners to notify builders of defects and providing time for the builder to make repairs before legal action can proceed. One of SB 800’s goals is to encourage builders to hire third-party inspectors as outside professionals to independently verify construction quality during the build process.

To achieve that, SB 800 created California Civil Code §43.99, which includes a critical provision:

“…The fact that an inspection by a qualified person has taken place may not be introduced as evidence in a construction defect action, including any reports or other items generated by the qualified person.”

So, if a builder hires a third-party inspector who meets the statute’s definition of a “qualified person,” any evidence that inspector generates—reports, photos, notes—cannot be admitted in a construction defect case, whether it helps or hurts the builder’s case.

Why Does This Rule Exist?

The intent was simple: encourage builders to invest in quality without fear that every report could later be weaponized in court. It also protects third-party inspectors from becoming easy litigation targets, ensuring they can focus on the inspection work rather than courtroom testimony.

• For builders: Use third-party inspections under SB 800 as valuable for catching and correcting problems before closing. However, they can’t serve as defense evidence in later disputes.
• For insurers: Don’t expect third-party QA/QC reports to be part of your litigation strategy in California. They’re off-limits.
• For inspectors: You have protections from liability to homeowners for construction defects and your work product usually cannot be introduced in defect cases by the homeowner.

What About the Rest of the States?

SB 800’s protections are unique to California. In most other states, third-party QA/QC findings are admissible when relevant, authenticated, and meet the hearsay exception. There are few special protections, so records can be used in response to claim disputes—by either side—if they meet evidentiary standards.

It’s high risk, high reward for builders. Records associated with uncorrected defects offer powerful proof for the prosecution. However, builders benefit by having third-party evidence showing defect corrections and code compliance for their defense.

What Is the “Hearsay Exception” and Why Does it Matter?

In most states, even if QA/QC records are relevant, they still must get around a legal rule called hearsay to be admitted in court.

Hearsay refers to a statement made outside the courtroom that’s later presented as evidence. Written reports and inspection notes are usually considered hearsay because the person who wrote them isn’t speaking directly in court at that moment.

However, there’s an important caveat to this rule: the business records exception (Federal Rule of Evidence 803(6) and similar state rules). If QA/QC reports were:

1. Made as part of the builder’s regular business activities,
2. Created at or near the time of the inspection by someone with knowledge, and
3. The company has a consistent practice of keeping such records,

…then they can often be admitted as evidence, even though they’re technically hearsay.

That’s why in most states, other than California, builders should assume their QA/QC reports could end up in evidence if litigation occurs.

Third-Party vs. Internal QA/QC

Another factor is whether an independent third party or the builder’s own staff performed the QA/QC inspection.

Third-Party Inspections

• California: If the inspector is a qualified person under SB 800, findings are not admissible. The law defines “qualified person” as someone operating independently with the appropriate certifications and/or licenses to perform the inspection and no less than five years of applicable experience.
• Other states: In most cases, reports remain admissible if they satisfy evidentiary rules.

Internal Inspections

• California: Internal QA/QC records created by the builder’s employees are not covered by §43.99. They could be subject to discovery and admissible if relevant because the law states that it does not lessen the liability of the builder or developer for damages caused by construction defects. 
• Other states: Internal records are generally admissible if they meet the business records hearsay exception.

What About Photos?

So, is there merit to avoiding photo evidence to lower the legal risk? According to Paul, the answer is no. In his opinion, it’s “counterproductive.”

In California, if the inspection falls under §43.99, photos are inadmissible anyway. That means builders and their third-party inspectors are free to capture real conditions—good or bad—without fear they’ll end up in a courtroom. In other states, photos taken as part of QA/QC may be discoverable and admissible.

However, from a quality standpoint, photos are invaluable for:

• Verifying that work was completed according to plan.
• Documenting corrections to identified issues.
• Providing a visual record for training and process improvement.

The benefits of having a complete record, especially when showing issues were fixed, often outweigh the risk.

How Does Discovery Work in Defect Cases?

So, as a builder, it may feel like a Catch-22 when it comes to QA/QC documentation to minimize your legal risk. Here’s some good news. Even outside of California, defect litigation typically relies most heavily on post-closing inspections and expert testing—not pre-closing QA/QC reports.

Why? The central question in a defect case is whether a defect exists at the time of trial or arbitration. Destructive testing, moisture mapping, and forensic engineering reports usually carry more weight than photos and reports from months or years earlier.

That doesn’t mean QA/QC records won’t be called into court. They can be. But they’re rarely the deciding factor. Therefore, engaging in independent QA/QC, documenting all findings and corrections, and retaining records is still what’s best for builders to deliver a high-quality home.

What Are Best Practices for QA/QC Documentation?

Whether you’re building in the Golden State or somewhere else, the goal of QA/QC is the same: identify and fix issues before turning a home over to the buyer. But when it comes to the potential use of these records in litigation, builders and insurers can follow a few best practices.

1. Know Your State’s Rules

If you operate in California, understand when §43.99 applies and ensure third-party inspectors meet the “qualified person” requirements. In other states, assume your QA/QC records could be used in litigation.

• Document Issues and Resolutions
  Don’t just note a defect. Show it was fixed, including when, by whom, and how. A before-and-after photo pair can turn a potential liability into a clear record of acting responsibly.
• Keep Records Organized

Courts and arbitrators look more favorably at builders who can produce clear, consistent documentation rather than a haphazard collection of notes.

• Train Staff and Inspectors

Make sure everyone conducting inspections understands what to record, how to record it, and the importance of accuracy and timeliness.

• Consult Legal Counsel

Your attorney can advise on how best to structure inspection programs to support quality improvement while minimizing unnecessary legal exposure.

For builders and insurers, the value of QA/QC isn’t just about legal defense. It’s about building better homes, avoiding claims in the first place, and having confidence in the product delivered to the homeowner.

Paul summed things up well:

“The greatest value of third-party quality inspections is to get it right, not to prove you got it right.”

Don’t Let Defects Derail Your Build

QA/QC programs catch issues early, but they’re only one layer of protection. A warranty program extends that protection long after closing—documenting repairs, resolving disputes, and helping builders stay ahead of legal and financial risk. Together, they form a more complete strategy for reducing exposure and safeguarding both your business and your buyers.

PWSC’s warranty program doesn’t just cover repairs—it documents them. Construction experts analyze each claim and assess repair needs against state-specific building codes. Clear records of defects and fixes help resolve disputes efficiently. When issues arise, PWSC’s mediation and arbitration processes keep claims out of court. The result: lower risk, faster resolutions, and greater confidence for both builders and homeowners.

Protect your projects by partnering with PWSC. Learn more at: https://www.pwsc.com/builders/.