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.
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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.
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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