Business Workshop: Second Buyers Can Sue Homebuilders

A recent Pennsylvania Superior Court decision has increased the risk of lawsuits by homebuyers against builders — not only can the first buyer of a new home bring a lawsuit against a builder, but now any subsequent buyer within 12 years of the home’s construction can file a claim.

In the case in question, a builder constructed a home in Jamison, Bucks County. After living in the home a few years, the first buyers sold it to a family who discovered water infiltration around the windows in the master bedroom.

The second buyers filed a complaint against the builder alleging only one count: breach of the “implied warranty of habitability,” which is the guarantee that the home is habitable.

The Superior Court held that the implied warranty of habitability should not end when the first buyer sells the property, and held that the risk of a hidden defect should continue with the builder for the full 12 years stipulated under Pennsylvania law.

The plaintiffs were thus permitted to continue their lawsuit against the builder.

The court explained that liability is still limited by two factors. First, homeowners must file the claim within 12 years from the time of the completion of the construction. Second, the breach of the implied warranty must still be proven. The homeowner must show that a defect is hidden and non-obvious, that it is a result of the builder’s design or construction, and that it affects the habitability of the residence.

Builders should be aware of this change in the law and realize that latent defects may now subject them to liability up to 12 years after the construction is complete, no matter how many times the house is sold.

For more information on this topic, please contact Kevin McKeegan at [email protected].

This article originally appeared in the Pittsburgh Post-Gazette’s Business Workshop section. Business workshop is a weekly feature from local experts offering tidbits on matters affecting business.

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