Court: Buyers of new homes can sue builders over hidden defects

By Howard Fischer, Capitol Media Services | Yuma Sun

PHOENIX – Buyers of new homes are entitled to sue builders for hidden defects for up to eight years – even if they have signed contracts waiving that right, the Arizona Supreme Court ruled Wednesday.

In a ruling with wide implications, the justices said that the common law “implied warranty of workmanship and habitability’’ recognizes the fact that home buyers are not experts in all the things that are required in constructing a house.

“A homebuyer must … rely heavily on the builder-vendor’s knowledge of construction quality, as builders are skilled in the profession, modern construction is complex and regulated by many government codes,’’ wrote Justice Ann Scott Timmer. “And homebuyers are generally not skilled or knowledgeable in construction, plumbing, or electrical requirements and practices.’’

She acknowledged that, in general, people are legally entitled to sign contracts defining the responsibilities of each. That presumes both parties are “sophisticated’’ and equally aware of the risks and terms.

But in cases of new homes, Timmer said, there is an “inequality in bargaining power’’ between the builder and the buyer.

“The implied warranty was created in recognition of this disparity, and undoubtedly reflects the homebuyers’ reasonable expectations that a newly constructed home would be properly designed and built,’’ she wrote.


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September 2022