Where are you located? What kind of grass do you have? Can you post a picture of the grass as it is now?

We are in San Diego. Not sure what kind of grass. see pictures below. We have an installed sprinkler system so it is definitely getting enough water.

Looks like another case of dead fescue in CA. I'll let the warm season grass folks point you in the right direction.

Just because you have irrigation does not mean you are getting enough water. You will want to measure your output. Sit out tuna or cat food cans 2 ft from every sprinkler head and 6-8 feet between them. Run the system for 10 minutes then measure the output. In areas that are covered by more than 1 zone, record the results, empty the cans, and measure the output for the other zone(s).

What is the current schedule for your irrigation system? Can you verify that all sprinklers are working and providing "head to head" coverage?

With your grass type and location you would need almost 2" of water per week including mid-day misting to keep it cool - it's a lot of work. That's want the sod farms do to keep that stuff looking good, but they don't pay for water...

A good option is to look into warm season grasses. Since you have quite a bit of shade St. Augustine may be the better option. dchall is probably the best guy to provide more input from here. He can give you more options.

Where in San Diego? I lived in San Diego for a year and didn't use an air conditioner, and I love my air conditioning. You guys sure she needs warm season grass? Just curious.

The San Diego location isn't specific enough. If you live in La Jolla you can grow fescue all day long. If you live east of Grossmont Center, you can't. Tell me more specifically where you live and I can suggest something more specific for the lawn. With your shade it's either going to be the Marathon (with proper care) or St Augustine. Other grasses won't survive the shade.

The sod was probably good sod to begin with. The problem is selecting Marathon (dwarf fescue) sod instead of either bermuda or St Augustine. Fescue grasses are considered good in cool climates. Putting them in warm climates is a bad idea and a really bad idea in a location faced with water shortages.

In San Diego area either bermuda (full sun) or St Augustine (partial to heavy shade but also full sun) should be the predominant lawn types. Unless you are in the morning fog zone next to the beach, trying to grow fescue or Kentucky bluegrass would require torrential amounts of irrigation. Many years ago there was a visitor here from National City. He had basic soil issues, but growing fescue was relatively easy for him because of the morning fog and afternoon coastal breeze.

The previous owners should have been watering new sod 3x per day (breakfast, lunch and dinner) for about 5 minutes each time until the sod roots knit into the ground. By the time you moved in watering should have backed off on the frequency until you were watering 1/2 inch twice a week. The only way you can know how much 1/2 inch is is to measure it with the cat food or tuna cans. Here is the whole scoop on lawn watering for mature turf.

Watering: Deep and infrequent is the mantra for watering. This is for all turf grass all over the place. Deep means 1 inch all at one time. Put some cat food or tuna cans around the yard, and time how long it takes your sprinkler(s) to fill all the cans. Memorize that time. That will be the time you water from now on. My hose, sprinkler and water pressure takes 8 full hours to fill the cans. Your time will likely be less. I like gentle watering. As for watering frequency, that depends on the daytime air temperature. With temps in the 90s, deep water once per week. With temps in the 80s, deep water once every 2 weeks. With temps in the 70s, deep water once every 3 weeks. With temps below 70, deep water once a month. Note that you have to keep up with quickly changing temps in the spring and fall. This deep and infrequent schedule works in Phoenix and in Vermont, so it should work for you. The reason for deep and infrequent is to grow deeper, more drought resistant roots and to allow the soil to dry completely at the surface for several days before watering again. If it rains, reset your calendar to account for the rainfall.

Having said that, you don't have mature turf, so watering half the rate but twice the frequency would be better until you have developed some deep roots. Taking the above into consideration, if you lived in downtown SD or to the west, summertime watering would be once every week and a half at 1/2-inch. If you lived in El Cajon you'd be watering twice a week at 1/2-inch.

My assumption is that i will need to remove the sod, till the ground and lay new seed.

New seed is simple, but not like that. Above all, NEVER rototill in preparation for sod. I would suggest that 'never rototill' was universal advice for all gardening, but defending that position is a huge digression. But for lawns it's a bad idea because the fluffy soil will never settle evenly. It will become bumpy almost immediately and get bumpier and bumpier over the next 3 years. You'll hate yourself for tilling. If you are seeding fescue, summertime is the worst time of year. Spring is only slightly better, but the results will be equally poor. Fall is the best time after the summer heat breaks and the evening temps are cooling off.

Really need to know where you are in the SD area and what you plan to do on the grass.

Thanks for all the info. I live in Mira Mesa. If it is possible, i would like to bring back this grass throughout the entire yard.

Well well. Mira Mesa, especially toward the west, should be fine for Marathon fescue. With respect to temperatures, how would you describe your summers, and especially the end of the summer? How do you know when summer is over? Is August any cooler than July? September cooler than August? I think this is going to be easier than I thought. You just need to rake up the old dead grass, reseed, stomp it down, and water. It would be nice to know whether you have Marathon I, II, or III. They have varying rates of growth getting slower with the higher numbers.