Picture this: You’re a Virginia homeowner who just moved in to your newly constructed, never-before-lived-in home, most likely in a development. What could be better than a brand new home with no problems to worry about, right? Except … six months later you notice that the window in the kitchen is leaking. A month after that, you see rainwater coming in through both living room windows. Help! What can you do? Who is responsible to fix this?
The good news is that you may be able to hold the builder responsible for the problems.Virginialaw provides some protection for a homeowner who discovers a material defect in a newly constructed home. Whether you can hold the builder responsible depends on:
- whether the builder knew about the defect
- the type of defect found
- whether you discovered the defect before any applicable warranty period expired, and
- the terms of your purchase contract.
Did the Home Builder Tell You About the Problems?
In Virginia, if a builder sells a home with a known defect that is in violation of the building code, the builder must disclose this in writing to the buyer prior to signing the purchase contract (or if it is a pre-construction contract, upon receipt of a certificate of occupancy for the home). (The builder’s disclosure requirements are found in §55-518 B. of the Virginia Real Estate Disclosure Act.)
If the builder did notify you of such a defect prior to actually closing the sale, you had the right to terminate the purchase contract. Of course, many people prefer to negotiate having the builder fix the defect, and proceed with the sale.
If you did not receive such a disclosure about a defect from the builder, and within one year from closing on the home you find a building code violation that the builder apparently knew of, the builder must remedy the defect.
For example, if the local building code requires a higher quality of window than what the builder used, and the builder knew this, then the builder must replace the windows, and compensate you for any damage caused by the leaks.
Before commencing a legal action to enforce your rights under the Act however, you should attempt to resolve the problem by notifying the builder of the violation, and give the builder the opportunity to fix the defect. If the builder’s responsibility is obvious, most builders will fix the problem rather than await a lawsuit
Implied Warranties That Virginia Law Adds to Builder’s Contracts
In addition to the builder’s required disclosure of any known building code violation, the builder must fix the defect if it is covered under a contractual warranty. The good news is that every purchase contract for the first sale of a new home in Virginia contains “implied” warranties.
(The exception is if you owned the property already, and hired the builder to construct the home, in which case you have a “construction agreement” with the builder rather than a purchase and sale agreement. The implied warranties under Virginia law do not apply to a construction agreement.)
This means that Virginia law automatically inserts the warranties into the purchase contract even if they are not expressly written there. These implied warranties say that the home will be free from defects, constructed in a workmanlike manner, and be fit for habitation. (Code of Virginia § 55-70.1.) These are in addition to any warranties actually spelled out in the contract.
The only way a builder can avoid or change the implied warranties in the purchase contract is by having it clearly state the buyer’s intent to waive, modify, or exclude such warranties. But the law wants to make sure you didn’t accidentally sign off on any fine print, so it requires that this statement be conspicuously written on the first page of the contract, IN CAPITAL LETTERS THAT ARE AT LEAST TWO POINTS LARGER THAN THE OTHER TYPE IN THE CONTRACT, and state with specificity the warranty or warranties that are being waived, modified, or excluded. If all possible warranties are being waived or excluded, the contract must specifically set forth in capital letters at least two points larger than the other type in the contract that the home is being sold "AS IS." (Code of Virginia § 55-70.1 C.)
Assuming you didn’t sign away or modify the statutory warranties in your contract, the builder’s responsibility to fix a defect in your home depends on when you discovered the defect. The implied warranties are good for one year from the date you took title to the property or the date you moved in, whichever happened earlier. If the claim relates to a structural defect in the foundation, however, the warranties extend for five years from taking title or possession. (Code of Virginia § 55-70.1.E)
If, within the warranty period, you find a problem with the home that is considered a material defect (for example, if the windows leak because the builder mishandled them and bent their frames),or if the home was not constructed in a workmanlike manner (if the leaking windows were due to the fact that they were installed in a shoddy, unacceptable manner) or if the home is not fit for habitation (if the windows leak to the extent that the home is too wet to live in), the builder must fix the defect, and reimburse you for any damages to the home caused by the problem.
To proceed with a warranty claim, you must first provide the builder with written notice of the claim. The builder has a reasonable period of time, up to six months, to fix the defect. (Code of Virginia § 55-70.1.D.) If the builder does not remedy the problem, you must file a claim within two years of discovering the defect, or two and a half years if you sent the required notice of the warranty claim to the builder. (Code of Virginia § 55-70.1.E.)
Did Your Builder Provide Express Warranties in the Contract?
If the defect you discovered in the home is not covered by Virginia’s implied warranties (for example, if you discovered the problem after a year, or your purchase contract modified the warranties), check the terms of the contract to see whether it contains any express written warranties. This may help you if you have a construction agreement with the builder rather than a purchase and sale agreement (as described above). Despite the fact thatVirginialaw does not provide for any implied warranties in a construction agreement, your builder may have provided express warranties in the construction contract.
You’ll need to study the terms of the contract and the builder’s warranties (or ask a lawyer to do so) to see whether the problem you’ve found is covered under any express warranty. If so, you must follow the procedures set forth in the contract to make a claim under those warranties.
Other Claims the Buyer May Have Against a Virginia Builder
Other legal claims are available which might be helpful in the case of defects that show up after the one year implied warranty period or are not covered by a warranty or disclosure requirement.
For example, you may have a claim for breach of contract. Let’s say the construction of the home materially (meaning in an important way) deviated from the plans and specifications you approved as a part of the contract. For example, perhaps the plans specified much better quality windows than the ones actually used. That’s a breach you can likely base a claim on.
In less common situations, the builder might be held liable in an action for fraud or negligence.
How much money might you receive in damages? If the builder is found to be at fault, the builder will most likely be required to pay for either the cost of the repair, or the decrease in the amount in value of the home due to the defect.
Where to Get Help
Determining whether the builder is responsible for a defect in your new home and what to do about it may not be easy. An attorney in your area can help determine your best course of action and how quickly you need to proceed.
You also might wish to file a complaint against the builder with the Virginia Department of Professional and Occupational Regulation (Compliance and Investigations Division), which is the state agency ensuring that licensed contractors abide by the rules and regulations governing their profession. If the agency determines the builder has violated the rules and regulations, it can take disciplinary action and possibly revoke the builder’s license.
In any case, you’ll want to take care of any issue you find with the house as soon as possible, so you can enjoy living in that brand new home, problem-free!