| The
New Home Warranty Act of 1986 made some significant modifications to the law.
This act became effective on August 30, 1986, and was most recently amended
in 2004. The Act applies to any structure
which is designed and used as a residence. Certain warranties are made by
the builder to the original purchaser of a new home and to subsequent owners
who purchase the home during the warranty period. |
Exclusions The act does not cover fences, landscaping, off-site improvements, driveways, or any other improvement not a part of the house itself. After the first year, the act does not cover the concrete floor of a basement or garage that is not part of the foundation wall of the home. Consequential damages are specifically excluded as are damages for several specific causes, such as mold and mold damage. |
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All new homes are automatically covered by a warranty starting from the time the first purchaser obtains title to the house or occupies the house, whichever occurs first. There are three different warranty periods. The first period is for one year and warrants that the house is free from any defects due to noncompliance with the building standards. The building standards are defined to be those standards adopted by any city, parish or other political subdivision in the building, electrical and mechanical codes. If the house is not located in an area that has any of these standards, then the Standard Building Code applies. The Standard Building Code is a national guideline for local codes that may or may not be as comprehensive as local codes. | |
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The second warranty period covers all electrical, heating, cooling, ventilating and plumbing systems for a period of two years. This warranty does not include appliances or fixtures and only comes into effect if a defect is the result of a failure to comply with the building standards. The final warranty period is for a period of five years and warrants that the house will be free of major structural defects due to non-compliance with the building standards. Major structural defects are defined to be actual physical damage to certain load-bearing parts of a house if the damage is extensive enough to make the house unsafe, unsanitary, or unlivable. Load-bearing parts would be foundations, walls, beams, roof-framing systems, columns, girders and lintels. Sounds like a good warranty doesn't it? Let's analyze it for a minute and see. Building codes are set for the primary purpose of public safety. Codes are usually minimal and cover such things as minimum framing requirements to insure the building doesn't collapse and minimum electrical requirements to insure that two toasters on the same circuit don't cause a fire. The New Home Warranty Act does nothing more than make the builder liable for a limited amount of time if he does not adhere to these minimal types of standards. The Act also provides several exceptions to the builder's minimal liability. For example, the home owner is required to notify the builder of any defects by certified or registered mail. If this isn't done within a "reasonable time," the builder may no longer be responsible. Also, the home owner must give the builder a chance to repair the defect before the home owner can attempt his own repair. The home owner, after giving the builder a chance to repair, has only thirty days after the expiration of the warranty period in which to file suit. In other words, if suit is not filed within two years and thirty days because of a defect in the plumbing, the right to recover terminates. Remember also that the defect in the plumbing must have resulted from the builder's failure to comply with the building standards. |
Contract rights Can the home owner still sue the builder under the contract because it was not finished in a workmanlike manner? This certainly would have been the case before the New Home Warranty Act was passed. Since the act states that it is the exclusive remedy against the builder, there may be some doubt as to whether the act or the terms of the contract would control. The builder and owner can waive the provisions of this act and agree to their own warranty like provisions. |