Purchasing a newly constructed home comes with its own special benefits as well as problems. Hopefully, your home's appliances will work, the foundation and structure will function properly, and you won’t have to concern yourself with making major repairs to a house that should have been perfect when you walked in the door.
What if do you, however, discover a problem? What if the pipes burst days after you move in or the roof leaks the following winter? What if the foundation cracks a few months later? Fortunately, there are a number of remedies available to you.
You may have heard of the Latin phrase “caveat emptor,” or “buyer beware.” This doctrine has both a legal and a literal meaning: if you purchase real property, you bear the risk that it is defective in some way.
The rule of “buyer beware” applied to newly constructed homes in Utah until very recently. However, under current law, a home buyer can expect that a newly purchased home will meet certain basic standards. A Utah builder is expected to construct homes free from serious defects before selling them. You should be capable of living in the home and the home should not have any serious problems. (This part of the law was established by a court case called Davencourt at Pilgrims Landing Homeowners Ass'n v. Davencourt at Pilgrims Landing, LC, 221 P.3d 234 (Utah 2009).)
When you move into your beautifully constructed new home, it should have the look, feel, and function of a new home.
Many prudent builders in Utah provide the buyer with a written construction warranty. Typically, this warranty promises that the builder will correct certain types of problems the buyer discovers in the home or property for a set period of time. The builder is not obligated to fix elements of the home that you simply decide you dislike, but the builder is obligated to follow the terms of the written warranty.
These terms may vary from builder to builder. While typical warranties last one year, some may last longer or cover a more comprehensive list of problems. When you discover a problem in your home, carefully review your warranty and consider having it reviewed by an attorney.
If you find something wrong with the home, such as an electrical defect or leaky plumbing, and it appears to be covered by the warranty, your next step is to contact the builder and ask that he or she fix the problem within the warranty period.
Construction warranties usually will not allow you to cancel the sale and move out of the home. They also usually do not allow you to get a cash payment from the builder. Rather, these warranties require the builder to fix the problems that you discover after closing.
The warranty may state a particular way in which you are supposed to notify the builder of problems. Be sure to follow these carefully. In any case, however, it’s wise to put your request into writing, and to take careful notes of any telephone conversations, in case you need to follow up and prod the builder into taking appropriate action.
As mentioned above, all newly constructed homes have to be fit for occupation and reasonably free from defects, whether they came with a written warranty or not. This is what’s called an “implied warranty of workmanship and habitability,” which is part of Utah law by virtue of the Davencourt case mentioned above.
The builder is legally required to fix the problems in your home — particularly any defects that affect its structural integrity or otherwise make it unsafe. (The builder is not required to fix minor, trivial, or aesthetic defects.) Specifically, you probably have a remedy under Utah’s implied warranty if you:
If you don’t have a written warranty, and don’t fit the above description, however, Utah law might not help you. If, for example, you find a problem with your new home’s surrounding grounds, a problem in the common areas (if you bought a home within a community run by a homeowner’s association), or a minor defect that does not render the property unsafe (i.e. the wrong shade of paint, or tiling that is the wrong size), you probably will not be able to succeed in a claim against the builder. (See Nolin v. S & S Const., Inc., 301 P.3d 1026 (Utah App. 2013).)
Suppose you close on a new home only to discover it has problems. You may feel especially helpless if you realize that you never received a written warranty from the builder.
While it’s true that written warranties are usually more comprehensive and easier to enforce than the implied warranties discussed above, it is possible to enforce an implied warranty. Contact the builder and explain why the problem makes the home unsafe. Request that the builder fix the problem.
If your letters to the builder don’t bring results, your best bet is to contact an attorney to see whether the defects in your home warrant legal action.
Hopefully, your builder will correct the problems with your home before you have to contact an attorney. However, if you do have to seek a lawyer's services, make sure to explain the specific details of the defect you discovered, how you discovered it, and how long it took to discover. (Collecting evidence in advance of this meeting will be helpful.)
If you’re considering bringing a lawsuit for problems with a new home, you may feel that the builder defrauded you. Utah law indicates, however, that the correct remedy is probably an action for breach of contract, rather than fraud. (Utah Code Annot. §78B-4-513.) Discuss this with your attorney and remember that whatever type of claims you bring, the law should provide a remedy that places you in just as good a position as you were in before purchasing the home. The builder should pay for the defect and any damages or injuries you suffered because of the defect. In rare cases of serious defects which, for some reason, cannot be corrected by the builder, you may even be able to cancel the sale after closing and get your money back.
Finally, remember that, if you find yourself in the unfortunate situation of having discovered a defect, you should not have to live with it. And, you shouldn’t have to pay for it. With any luck, the builder will promptly remedy the defect and you’ll be on your way to enjoying your new home.