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The Basics Of New-Home Warranties

When helping clients purchase new home construction, knowing the basics about new-home warranties can add more value to your service.

New-home warranties fall into three categories:

Statutory: These are warranties specifically required by law. These warranties range from two years for the quality of workmanship and materials to 10 years for major structural components.

Implied: These are warranties inferred by legal precedent set in past lawsuits. Most states have case law that protects new-home buyers from faulty workmanship. One of the most common is the implied warranty of habitability, which guarantees that the house will be free from defects that substantially impair its use and enjoyment.

Express: These are written warranties provided by the home builder. A builder may decide to provide express warranties about the home in the purchase contract, even in the absence of a law requiring it to do so. Specific express warranties often benefit a home builder because the builder may attempt to disclaim all implied warranties by providing specific ones. However, most courts hold that a disclaimer of an implied warranty is void because it defeats the purpose of the warranty: to protect consumers from faulty workmanship.

Homeowners must provide builder with a written notice of any alleged construction defect, then give the builder a reasonable amount of time to resolve the problem and only after these steps, contact the Texas Real Estate Construction Commission for state-sponsored inspection and dispute resolution.

In order to avoid warranty disputes, advise your clients to read contracts carefully and to ask the salesperson questions.

For more information regarding Builder contracts, consider attending a 2 hour seminar: New Home Builder Contracts and Addendums offered by MetroTex, CCAR, GFWAR.

Source: Realtor.org

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