Home warranties are a valuable resource that can protect residential homeowners from incurring unwanted costs to repair their home.  In North Carolina, there is an implied warranty of habitability and express warranties that can protect homeowners.  Homeowners armed with an understanding of these warranties are better able to protect their interests.

Implied Warranty of Habitability

The implied warranty of habitability applies to the construction of residential homes.  But, homeowners are often surprised to hear that this warranty exists and inevitably ask – what is the implied warranty of habitability?

The implied warranty of habitability requires that the home and fixtures are free from major structural defects and that the home is constructed in a workmanlike manner.  Stated differently, the builder is providing the assurance that the labor and products are acceptable in terms of quality.

This is a warranty that every builder gives to a residential homeowner, even if the builder and the homeowner never discuss or agree to the warranty.  The implied warranty is presumed to apply by law.  The builder and the homeowner, however, can agree that the implied warranty will not apply to the home construction.  The builder will often put a clause in the purchase contract that the homeowner agrees to waive the implied warranty of habitability.  Homeowners should make sure they review the purchase contract.

Unfortunately, for homeowners, there is no definite set of situations to which the implied warranty of habitability applies.  The warranty is applied on a case-by-case basis.  In past cases, homeowners have argued that the implied warranty habitability applied to repeated flooding in basements, foundation cracking, lack of availability of adequate water supply, a chimney that failed to remove smoke, and non-moisture resistant siding.  When an issue arises with your home, the best course of action is to contact a construction law attorney to discuss if the implied warranty of habitability may apply to your situation.

So who can assert a claim under the implied warrant of habitability?  Originally, the initial buyer of the home from the builder was the only person who could bring a claim for breach of the implied warrant of habitability.  Now, subsequent purchasers of the home can also bring a claim under the implied warranty of habitability.  If you buy a home from someone, you can pursue the original builder if the home is poorly constructed.

But, this does not mean that the builder is not without protection.  Claims for breach of the implied warranty of habitability must be brought within six years from the specific last act or omission of the builder or substantial completion of the house, whichever occurs later.  This protects the builder from being exposed to claims beyond the six year period.

Express Warranties

Just like any other product or service, home construction can be backed by an express warranty.  An express warranty is a written statement that promises the condition of the workmanship on the house or a product used to build the house.  An express warranty will allow for the repair or replacement of the work or product under certain circumstances.

Stated differently, an express warranty can also be thought of as a contract between the homeowner and the builder or the manufacturer providing the products to the house.  The homeowner should ask the builder for all express warranties that will be provided on the home and the materials used to build the home.  In comparison to the implied warranty, the express warranty provides specific coverages.  As such, a builder will often provide an express warranty so that they know exactly what is covered.

While not all express warranties are the same, a typical express warranty is a 2-10 Home Buyer’s Warranty.  This warranty contains one year of coverage from the date of closing for defects in materials and workmanship.  This same warranty contains coverage for two years on all systems, such as electrical, plumbing, and mechanical.  Finally, the warranty contains coverage for 10 years for structural defects, such as physical damage to load bearing elements of the structure.

The North Carolina Supreme Court recently enforced an express warranty for a 20 year period, despite the manufacturer arguing that the six year time period should apply.  The manufacturer of a protective sealant provided the homeowner a 20 year warranty that the sealant would not crack, craze, or delaminate.  Just over six years later, the homeowner filed a lawsuit against the manufacturer when the sealant started cracking and blistering.  The manufacturer argued that the lawsuit should be barred because it was brought after the six year period.   The Supreme Court allowed the 20 year warranty to stand and stated that a supplier offering a warranty beyond the six year period should not be allowed to then argue the warranty is limited to only six years.  This is a great outcome for homeowners as courts should enforce express warranties for the time period the warranty is in place.

Like any contract, the homeowner should thoroughly review the express warranty provided by the builder or product supplier.  The terms of the contract will dictate what is covered and what is not covered.  Often, express warranties will not cover certain aspects of the home, usually called “exclusions.”  It is important for the homeowner to read the warranty and understand what is covered.  Some common exclusions are:

  • Improper maintenance by the homeowner or defective material or work supplied by anyone other than the builder or supplier
  • the homeowner’s failure to give prompt or proper notice of a claim
  • mold, fungus, termites, radon, rotting of any kind, or asbestos
  • any defect or damage the homeowner knew about before the effective date of the warranty.

A homeowner should not just assume that coverage automatically exists because an express warranty exists.  A homeowner should read the express warranty in detail before signing it and ask questions if they do not understand.

The implied warranty of habitability and express warranties are valuable tools that can protect homeowners.  Armed with this information, homeowners are in a better position to make sure they do not incur costs for which they are not responsible.  A construction lawyer can help homeowners enforce these warranties. Fill out the form on the right or call us to find out more about how Sodoma Law construction attorneys can represent you in and out of court.

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