Tuesday, January 30, 2007

Must homebuilders give buyers an express home warranty?

Hey gang, this might be informative for you...it's an occassional nugget from the ISBA Bar Journal for new lawyers...

Is a seller of new construction (builder) required by law to provide the buyer with an express warranty (full or limited)? I know that the implied warranty exists under Illinois law, but is an express warranty required?

SCOTT A. NOLAN, CRYSTAL LAKE. An express warranty is not required. The purpose of the express warranty is to limit the liability otherwise imposed by the much broader common law general warranty of habitability. Builders may grumble that they are having to "give" something to buyers, but the builders' attorneys know that the builders are "taking away" some of the buyers' protection established by the warranty of habitability.

BOB PARK, ROCK ISLAND. No, Illinois law does not require a new builder-home seller to provide an express warranty. Like other market decisions, the buyer is free to buy from a builder who offers an express warrant or one who does not. There may also be third-party warranties available for purchase. Years ago, when a builder-seller refused to stand behind his product, the supreme court created an implied warranty of habitability. Now that we have that implied warranty, there is little incentive for the General Assembly to pass a law requiring an express warranty.

T. J. THURSTON, HUNTLEY. Bob put it very well. I would add that most reputable builders/sellers include an express warranty on new construction, typically for different lengths depending on the item (e.g., one year for labor, ten years for materials). In today's competitive market for new construction, it is an incentive to get the buyer to close on the house because it is easier to rely upon an express warranty than it is to sue under an implied warranty. Just as there is no law that any product must include an express warranty, there is no law requiring such on new construction housing.


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