New-home buyer can make builder repair defects

MAILBAG

July 09, 2000

Many readers have questions about a builder's responsibility to fix defects in a new home.

Maryland law provides certain minimum protections for new-home buyers. In every sale of a home or condominium to an original purchaser, the law requires that the completed improvement is:

(1) Free of faulty materials;

(2) Constructed according to sound engineering standards;

(3) Constructed in a workmanlike manner;

(4) Fit for habitation.

These statutory warranties do not apply to any condition that an inspection of the home would reveal to a reasonably diligent purchaser at the time the contract is signed.

In some cases, a buyer might need a portion of a new home to be constructed for a particular purpose (for example, access for the disabled, a wine cellar, a built-in sauna, etc.). When the purchaser relies on the builder's skill and judgment to complete the improvement, there is a statutory warranty that the improvement is fit for the purpose.

These warranties may be excluded or modified by a document signed by the purchaser, which details the buyer's consent and specifies the warranty to be excluded or modified.

The statutory warranties exist for defects that appear within one year after the original purchaser takes possession of a completed dwelling (two years for structural defects). They may be enforced by the heirs and personal representative of an original purchaser until the expiration period ends. An action for breach of warranty must be commenced within two years after the defect was discovered or shall have been discovered, and not later than two years after the expiration of the warranty.

In addition to these basic warranties, a builder who sells or constructs a new home may choose to provide the buyer with a new-home warranty security plan, sponsored by a private company. Maryland law requires a builder to disclose in writing to the home purchaser whether the builder participates in a new-home warranty program. The disclosure usually occurs as a contract document.

When a builder discloses that it does not offer a new-home warranty, a buyer has five working days from the date of the contract to rescind it or receive a refund of any money paid to the builder.

The statute prescribes minimum warranty coverage for defects in workmanship and materials, including structural defects. The details of coverage must be provided by a builder at the time of the purchase or construction contract. If a defect appears, the homeowner must follow the procedures specified in the written warranty plan as the exclusive remedy.

If a buyer decides not to participate in a new-home warranty plan offered by a builder, the buyer must waive these rights in writing at the time the contract is signed.

Civil and criminal sanctions are provided for builders who fail to comply with the new-home warranty law. The state law does not apply in Montgomery County, which has its own new-home warranty law.

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