Housing Merchant Implied Warranty

General Business Law § 777-a provides for a housing merchant implied warranty in the contract of sale for all new homes, which survives the passing of title.  Pursuant to the statute, the home must be free from all defects resulting from a failure to have been constructed in a skillful manner for one year from and after the warranty date.  For two years from and after the warranty date, the homeowner is assured that the plumbing, electrical, heating, cooling and ventilation system in the home are free of defects resulting from a failure of the builder to install such systems in a skillful manner.  Additionally, the home must be free from all material defects for six years from and after the warranty date.  These warranties do not extend to work done on the home that was defective, or non-defective supplies used in the building process, or patent defects discoverable upon reasonable inspection.

A waiver of any of the above the warranties may be contracted to between the builder-vendor and the homeowner.  Fumarelli v. Marsam Development, Inc., 238 A.D.2d 470, 657 N.Y.S.2d 61 (2d Dept. 1997), for example, involved a suit for breach of the housing merchant implied warranty against the builder by the purchaser of a newly-constructed condominium unit.  Here the purchase agreement contained a disclaimer that waived the housing merchant implied warranty and any other warranties, implied or express.  The purchase agreement only included a limited warranty, and the court found this to be the only warranty enforceable on the parties.  Pursuant to public policy, however, no agreement may exclude all warranties.

Timely notice to the builder of the breach of warranty is also necessary to maintain such a claim.  In Finnegan v. Brooke Hill, LLC, 38 A.D.3d 491, 833 N.Y.S.2d 107(2d Dept. 2007) plaintiffs were individual unit owners in a condominium complex who noticed defects in common areas of the building.   The court found the six-year warranty period in the limited warranty to be inapplicable, since the defects alleged in the complaint were not related to a “major structure,” because they did not affect the safety or sanitary needs of any of the units. Therefore, the plaintiffs were only left to avail themselves of either the one-year or two-year warranty period in the limited warranty, and since they failed to give written notice of the warranty claim for breach of the housing merchant implied warranty to the builder within 30 days after expiration of the warranty period, they were barred from such claims as well.

Prior to General Business Law § 777-a, contracts for the sale of newly constructed homes carried an implied warranty that the construction was performed in a skillful manner and the building were free of material defects.  The passage of the statute does not, however, supersede the common law implied warranty, nor does it prevent homeowners from bringing suit under the common law theory as well as under the statutory theory of liability.  Fumarelli v. Marsam Development, Inc., 92 N.Y.2d 298, 680 N.Y.S.2d 440 (1998).

Comments are closed.