Buyer protections were significantly diluted in 2002 by legislative action via SB800 (a strong Builder lobby helped bring this about). Title 7 of the California Civil Code is now in place.
SB800 "...specifies the rights and limitations of individual owners of single family homes and individual units of attached dwellings and, in the case of a common interest development (i.e., condominium project), any association of owners, to bring an action for construction defects against a builder, developer or original seller ("builder"), and the requirements for doing so."
I cover SB800 on page 3 of this document: http://docs.Steven-Anthony.com/BuilderRealtorAgent.pdf
You will also find an additional link that covers SB800 more thoroughly. A number of CA Civil Code Sections are touched on; however, the most prudent thing to do in my opinion is to seek legal advice!
SB800 is the legislation covering construction defects, and there are specific guidelines as to how claims should be filed and what is covered. You need to speak with an attorney who specializes in construction defects law. I don't know anything about this firm but here is one in the bay area - http://www.berding-weil.net/construction-defects/
Lance King/Owner-Managing Broker