How to Make Sure the Builder’s Warranty is the Only Warranty

August 16, 2016
Aaron S. Marines

Nearly all home builders and developers give some sort of warranty to their buyers.  Sometimes these warranties are limited and negotiated between the builder and the buyer.  Other builders provide a “standard” ten-year warranty from one of many home warranty companies.  No matter what kind of warranty is provided, however, builders want to make sure that the written warranty is the only kind of warranty that applies.  Whenever a builder has a dispute with a homeowner, the  homeowner will try to establish other kinds of warranties:  an implied warranty of habitability, an implied warranty for merchantability or fitness for a particular purpose, a warranty for reasonable workmanship, or claims for misrepresentation of latent defects in the new home construction.

A recent decision by the Pennsylvania Superior Court addressed this issue.  Streiner v. Baker Residential of Pennsylvania decided that if the written warranty is “clear and unambiguous” that it effectively eliminates any other warranty “express or implied as to quality, fitness for a particular purpose, merchantability, habitability, or otherwise.”

In that case, the homeowner was provided a ten year home warranty.  The warranty contained the language quoted above, saying that it was given in lieu of all other warranties, express or implied.  The homeowner discovered construction defects that were not covered by the express ten year warranty.  In order to try to make the builder responsible for these defects, the homeowner alleged that all of these implied warranties applied.  The Superior Court disagreed.  The Court very easily determined that these implied warranties can be waived by the home buyer, so long as the warranty agreement very clearly eliminates any of these implied warranties.

All builders should make sure that whatever kind of written, express warranty that they provide to home buyers, that the warranty clearly, unambiguously, and obviously eliminates any other kind of implied warranties.

Aaron Marines is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He received his law degree from Widener University and practices in a variety of areas including Commercial Real EstateLand Use, Land Planning and Zoning matters.