In recent real estate news, the Arizona Supreme Court ruled that homebuyers can sue home builders anywhere up to eight years after purchase for construction defects. The new law states that buyers may even sue if they signed a contract waiving those rights.
The ruling came with some fairly wide implications, with many of the Supreme Court justices noting the current common law, which states “implied warranty of habitability and workmanship.” This law was made to show the fact that most homebuyers do not have expertise when it comes to home construction.
Relying On Homebuilders
Justice Ann Scott Timmer noted that homebuyers must heavily rely on vendor and builder construction knowledge, depending on them to build a quality home. Modern construction is very complex and under strict regulations, thanks to government codes. Most homebuyers do not have knowledge or skills when it comes to plumbing, construction, electrical requirements, etc.
As a homebuyer, it is your legal right to sign a contract that defines your responsibilities and the responsibilities of the homebuilders. Presumably, each party is well aware of the terms and risks.
However, when it comes to new homes, bargaining power between buyer and builder begins showing inequality.
The ruling created this implied warranty for defects to recognize the disparity between builders and buyers. This reflects any reasonable expectations a new homebuyer might have about the construction and design of a modern home.
A Divided Ruling for Home Defects
Justice Clint Bolick joined King, pointing out the fact that nowhere in Arizona state law is there anything written regarding implied habitability. Rather, this law regarding potential defects was created by the State Court of Appeals back in 1979.
Timmer noted the irrelevancy of Bolick’s statement, saying the decision was implicitly affirmed by state laws.
She noted that the freedom to the contract has long been of the greatest importance in public policy. As a result, courts do not infringe upon that lightly. However, when identifiable public policy clearly outweighs enforcement, the court should refuse to enforce certain contractual terms.
What This Means For Homebuyers
Arizona homebuyers can now file reasonable complaints regarding defects in home purchases. Here’s how it works, according to Timmer:
A recent homebuyer that is unhappy with their purchase may now file a complaint with the Registrar of Contractors against the homebuilder’s license to receive recovery fund money. However, Timmer noted that this law is not a substitute for enforcing the implied warranty. The payments for this “recovery fund” have a $30,000 cap. As a result, they do not provide any such reimbursement for additional consequential damages.
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