Monday, December 17, 2012

Home Builders Could Be Liable For Repairs

In a case of first-impression in Pennsylvania, the Pennsylvania Superior Court announced that home builders could be liable under the implied warranty of habitability not only to their customers, but also to later purchasers of the residence.
On November 5, 2012, in Conway v. The Cutler Group, (No. 803 EDA 2012) the Superior Court held that the implied warranty of habitability applies to subsequent purchasers of a residence down the line from the original purchaser. In other words, not only can the first purchaser of the home bring a claim against a builder, now any subsequent purchaser of the home within 12 years of its construction can bring such a claim.

The facts are these. In September 2003, a builder constructed a home in Jamison, Pennsylvania. The first resident-purchasers bought the home and lived in it for a time. Then, in June 2006, the second resident-purchasers, the Conways, bought the home. The Conways discovered water infiltration around the windows in the master bedroom in April of 2008. The Conways filed a complaint against the original builder alleging only one count: breach of the implied warranty of habitability.
The Superior Court held that the implied warranty of habitability should not terminate when the first resident-purchaser sells the property. The Court held that the risk of a hidden defect should continue with the builder.
This is a significant extension of the scope of this theory of liability in Pennsylvania. Now, under the Superior Court's reasoning, any subsequent owner of a residential property is able to file a claim against the builder for a breach of the implied warranty of habitability before the 12 year statute of repose expires.

The Court explained that the liability is still limited by two factors. First, any claims brought after 12 years from the time of the completion of the construction are barred by the statute of repose regardless of when defects are discovered. Second, the Court emphasized that the breach of the implied warranty must still be proven. A plaintiff must show that a defect is latent (hidden) and non-obvious, that the defect is a result of the builder's design or construction, and that the defect affects the habitability of the residence.

Because of the Court's holding, the plaintiffs were permitted to continue with their litigation against the builder. Builders should be aware of this change in the law and realize that latent defects may now subject them to liability up to twelve years after the construction is complete, no matter the number of times a home is sold during that period.
Kevin F. McKeegan
Mr. McKeegan has more than twenty-eight years of experience in all aspects of Pennsylvania land use and property development law. While primarily representing property owners and developers, Mr. McKeegan has earned a reputation of being able to work in close coordination with all stake holders - community groups, municipalities and his clients - to smooth the development process. His diverse practice has included representing the developers of an over 1 million square foot regional shopping mall and the owners of a multi-phase residential golf course community. Mr. McKeegan took the lead in drafting a "traditional neighborhood development" zoning ordinance that incorporated not only his client's needs for a mixed-use (office, retail and residential) project but also accommodated community concerns regarding landscaping, buffering and preserving environmentally sensitive areas.
Brandon B. Rothey

Mr. Rothey is an associate at Meyer, Unkovic & Scott LLP. He regularly counsels and represents clients with respect to construction, real estate, and commercial litigation. He has worked on cases for both plaintiffs and defendants involving breach of contract, negligence, negligent misrepresentation, products liability, the Pennsylvania Unfair Trade Practices and Consumer Protection Law, insurance coverage, and professional malpractice. Mr. Rothey has counseled and represented clients in the energy, manufacturing, construction, and health care industries. After receiving his B.S. from Pennsylvania State University, he graduated with a J.D. from the University of Pittsburgh School of Law in 2009.

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