Is a Contractor Liable to the Second Buyer of a Home for Construction Defects?

A recent court case, Conway v. The Cutler Group, suggests that contractors may be liable for construction defects experienced by the second buyer of a home. In this case, the Conways purchased a home from the owner and after two years of living in the house, they discovered water leaking around the windows. The Conways sued the contractor for a failure of the implied warranty of habitability. The contractor contested the Conway’s claim saying that because they never contracted for the Conways they had never given them any warranties. The court agreed with the contractor and dismissed the claim until the first level of the appellate court reversed the trial court. The appellate court claimed that the warranty of habitability is supposed to “level the playing field between the builder and purchaser of a home and it should be extended to subsequent purchasers.” However, the Pennsylvania Supreme Court disagreed and said that in the future they would not give any warranties to subsequent purchasers.

It is important to note that states rule differently on this issue. States like Iowa and Nebraska have given the warranty of workmanlike construction of new homes to second and subsequent homebuyers.

“Take Away: Contractors may still be on the hook for construction defect claims brought by a second buyer. Although the outcome will be state specific, Nebraska and Iowa courts will likely allow the claim.”

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