Builder Has Limited Liability To Subsequent Buyers

   Question: The homes in our Prescott subdivision were built six years ago on clay soil without proper drainage. In the past two years, there has been settling of the soil so that many homes, including ours, now have large cracks in the walls and patios, and have front doors that do not close properly. We did not buy our home directly from the builder. We bought our home four years ago from a seller who moved to California. At that time we were not aware of any soil problems, and the house seemed fine. Can we file a lawsuit against the builder now for the problems with our home even though we did not buy our home directly from the builder?

   Answer: A builder’s implied warranty of workmanship and habitability — that is, free from construction defects — is enforceable for up to eight years after completion of the home. This implied warranty is enforceable not only by those who bought the home from the builder, but also by subsequent buyers who did not buy the home from the builder. There is a limitation, however, as to subsequent buyers of a home. The limitation is that a subsequent buyer will have a claim against the builder for only latent (or hidden) construction defects which could not have been discovered by a home inspection.

   Therefore, if you had a home inspection four years ago when you purchased your home and there was no evidence of soil-settling problems, you should have a right to file a lawsuit for damages against your builder. You are first required, however, to give your builder the opportunity to repair this soil-settling problem.

  If you would like assistance regarding commercial or residential transactions, potential litigation, HOA issues, estate planning or other legal matters, please call our office at 602.957.9810 and arrange for an initial consultation with one of our real estate attorneys.