By: Thomas S. Tripodianos Published: October 2005

Home Warranty

Question. With all the rain (and flooding) that has plagued the region recently I’ve received a number of inquiries as to what a builder’s liability is in connection with storm water damages. The good news (for builders at least) is there is no special liability for unusually high amounts of rain. This month I will take the opportunity to explore home warranties which may come in to play.

In the case of renovations a contractor has an obligation to comply with the plans and specifications which form a part of the contract. An inadvertent and insubstantial deviation from the specifications will not ordinarily be deemed a breach of the parties’ agreement. Any claim that work is inferior to that required by the specifications must be established by the owners.

The provisions of the General Business Law govern warranties on the sales of new homes. Except as otherwise provided by the statute concerning the exclusion or modification of warranties, other implied warranties may arise from the terms of the contract or agreement or from a course of dealing or usage of trade.

The "housing merchant implied warranty" created by these provisions is implied in the contract or agreement between builder and owner for the sale of a new home and becomes effective on the "warranty date." The warranty that a home will be free from defects due to a failure to have been constructed in a skillful manner endures for one year from and after the warranty date. The warranty that a home will be free from defects due to a failure by the builder to have installed the plumbing, electrical, heating, cooling and ventilation systems in a skillful manner endures for two years from and after the warranty date. The warranty that the home will be free from material defects endures for six years from and after the warranty date. The warranty extends to the first person to whom the home is sold and, during the unexpired portion of that period, each successor in title to the home.

"Material defect" means actual physical damage to the load-bearing portions of the home caused by failure of such load-bearing portions which affects their load-bearing functions to the extent that the home becomes unsafe, unsanitary or otherwise unlivable. "Constructed in a skillful manner" means that workmanship and materials meet or exceed the specific standards of the applicable building code. When the applicable building code does not provide a relevant specific standard, such term means that workmanship and materials meet or exceed the standards of locally accepted building practices. Other defined terms are: "building code;" "plumbing systems;" "electrical systems;" and "heating, cooling and ventilation systems."

Written notice of a warranty claim based upon a housing merchant implied warranty must be received by the builder prior to the commencement of any action for damages caused by the breach or for other relief, and no later than thirty days after the expiration of the applicable warranty period. Furthermore, the owner and occupant of the home must afford the builder reasonable opportunity to inspect, test and repair the portion of the home to which the warranty claim relates.

The measure of damages in an action for breach of a housing merchant implied warranty is the reasonable cost of repair or replacement and property damage to the home exclusive of the value of the land, unless the court finds that, under the circumstances, the diminution in value of the home caused by the defect is a more equitable measure of damages.

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