Homebuilder Misrepresented Square Footage of Home
Question: We signed a purchase contract with a homebuilder for a new house to be built in north Scottsdale. After we closed escrow and moved into our new home, we discovered that an outside wall was in the wrong location per the plans and specifications for our new home. As a result, there is less square footage of living area. The homebuilder has refused to talk to us. Has the homebuilder breached the purchase contract? What are our damages?
Answer: A homebuilder will be liable for breach of the purchase contract if the new home contains substantially less square footage of living area than stated in the plans and specifications. The Arizona Court of Appeals has ruled that the homebuilder breached a purchase contract when the square footage of the new house under the plans and specifications was to be 2,089 square feet, but the actual square footage was 1,793 square feet. Your damages would be the value of the lost square footage.
For example, if the cost of construction is $100 per square foot and you lost 200 square feet, your damages would be $20,000.
If a house being purchased is not new, however, the standard purchase contract for resale houses states in capitalized bold print that the buyer must verify the square footage during the 10-day inspection period. This strong language has eliminated almost all post-closing claims for wrongful square footage by buyers of resale homes.