Question, client buying a house with a couple of structural defects and the house is 2 years old and is bank owned, never lived in. Builder is still in business. Are the 10 year warranties transferrable with the house or just the original owner? And if so does anyone have a web link where I can find the documents to prove it? Note: I did ask the builder the question and he stated not transferable, but that’s just verbal. Thanks in advance.
That’s a good question. I’m an Inspector in Virginia, so the following info relates to homes in Virginia.
The state requires builders to give a 5 years structural warranty; and this warranty “shall be held to survive the transfer of title”. The state law also states the warranties can be “waived, modified or excluded” under certain conditions, but this must be spelled out specifically in the contract (the state law also describes how the exclusions must be presented; type face, etc).
A search VIA the internet under FL building laws/regulations may help you.
This is something I never considered; thanks for the info.
Thanks Jaime, I did try Google searching but mostly what I got was the warranty insurance companies selling their policies to builders. I will inform my client to check with a real estate attorney on this if I cannot find proof for him. I was under the impression that the warranty transferred as I have seen other builders repair defects not from the original owners, but maybe they were just using good public relations. This house I inspected the builder is a small custom builder.
Gordan----Do you mean a warranty program like the ones listed below that the builder may pass on to the orginal buyer of the home when it was built or the actual builders risk ?
Those are insurance companies which back the builder. The actual law for the 10 year warranty which builders must cover is what I need to know is transferable or not.
I would think it would be. but have not had to actually deal with one. If its a law I am sure it is on the house not the owner. (otherwise the contractors would just go around killing the claimants)
so true. One piece of information I read was that a builder could sell the house to an empty shell corp and resell it to bypass the law. But that didn;t get me proof.
The builder should be on the hook. Florida contractor law obligates them for both the obvious and latent defects. I would advise the client to converse first with the contractor, if he fixes it then trys to sue he will not win and it is important to document dates of discovery. If he can’t get anywhere then he should consult an attorney. Do not advise any client regarding law aside from recommending they contact an attorney. I would have him ask the attorney also if he buys it with full knowledge of the defects expecting the contractor to correct it, how might that influence the law and the obligations of the builder under the law.
Brian thanks for the advice
I found this:
Builders are generally responsible for structural defects as indicated in Bolkrum v. Stabb (1975). This applies even to cases of defects occurring after the property has changed hands. In Barnes v. Mac Brown & Co. (1976), the plaintiff in 1971 bought a home built in 1967 from the original owners. On moving in, large cracks among other defects were observed around the basement walls. The plaintiff’s suit against the builders for breach of an implied warranty of habitability which was earlier dismissed by a lower court was upheld on appeal not withstanding the absence of privity between the builder and the subsequent vendee. The builder would however be relieved if the vendor makes himself the principal contractor behind the construction and disposition of the property as in the case of Le Blanc v. Ellerbee Builders Inc. (1975).
In this artical on page three that you might want to read in it’s entirety : http://findarticles.com/p/articles/mi_m1YFN/is_1_7/ai_n25122033/?tag=content;col1
I would also agree with Brian, in my past experience as an expert witness in constructiion litigation cases the contractor is on the hook. But as Brian quoted do not do anything without having the client consult with an attorney.
Happy New Year !
Fred, I appreciate the info and advise.
The warranty would go with the property and is backed by a warranty company. I do know a couple of attorneys that deal with stuff like this and one out in your area if you need to refer anyone. But as others stated…I wouldn’t get to involved on giving advise.