Secondary Home Buyers Can Sue Contractors for Habitability Claims (PA)

In Conway v. Cutler Group, the state Superior Court ruled on the novel issue of whether the implied warranty of habitability applies to homebuyers who are not the original purchases of the home. In this case the Cutler Group built a new home for the Fields family in 2003. In 2006, the Conway family acquired the home from the Fields. It was not until 2008 that the Conways discovered water entering their home around the windows in their master bedroom. A subsequent inspection of the home revealed a number of defects. In 2011 the Conways sued the Cutler Group for breach of the implied warranty of habitability.

The Bucks County Court of Common Pleas dismissed the complaint, granting Cutler’s preliminary objections on the basis that there was no privity of contract between Cutler and the Conways and that the implied warranty of habitability did not extend beyond the builder and the original purchaser of the home. However, the Superior Court disagreed. A three-judge panel felt that the implied warranty of habitability is based upon public policy concerns and is not a contractually dependent remedy. The court also stated that it would be inequitable to re-shift the risk of latent defects back to a second or subsequent homeowner. The Superior Court also relied on numerous other decisions from states such as New Jersey, New Hampshire, Rhode Island and Illinois for confirmation of the decision.

The court cautioned that the Conway ruling would not result in unlimited liability against homebuilder. “ It is still the plaintiff’s burden to show that the alleged defect is latent, attributable to the builder’s design or construction, and affects habitability.” Moreover, claims filed under the implied warranty of habitability are still subject to the twelve year time limit created by statute of repose.

Thanks to Remy Cahn for her contribution to this post.  If you would like more information please write to mbono@wcmlaw.com