Anyone who has purchased a newly built home from a builder/developer is likely familiar with construction defects. Some are minor. Others are not. Builder contracts often require a buyer to close escrow before these defects are corrected—trusting in the builder’s representations that the defects will be included in a punch list and will be promptly remedied.
Over the years we have spoken with many homeowners who have disclosed their experiences with what comes next—after close of escrow. Repeatedly we have been given incredibly similar accounts of builder promises, but not performance. A history of delay, neglect, broken promises, discourtesy and refusal to honor the builder’s own new home warranty is common. In our experience there is not any one builder that has these complaints. It appears to be an endemic practice across the industry.
And there are reasons that builders can ignore repair requests. The builder contract provisions dealing with the warranty issue that we have reviewed are lengthy and confusing. They are primarily concerned with disclaiming all meaningful warranties and substituting a much weaker warranty that favors the builder.
Under recent caselaw, the builder practice of disclaiming warranties will no longer work.
The Arizona Court of Appeals gave Arizona homeowners some much needed help when dealing with new home construction defects. In the case of Zambrano v. M&RCII LLC, 1 CA-CV 19-0635, 7/29/21 the Appellate Court ruled that the implied warranty of workmanship and habitability for a new home cannot be waived. Arizona courts have imposed an implied warranty of workmanship and habitability into every new home construction contract. And now this buyer protection cannot be disclaimed by the seller/builder or waived by the buyer.
This is great news for Arizona homebuyers and will provide a slightly more level playing field for new homeowners.
Platt and Westby, P.C. has offices in Phoenix and Gilbert, Arizona.