Warranty Expires on New Home With Problems
By Ilyce R. Glink and Samuel J. Tamkin
Summary: An owner of a new home is experiencing
many problems. The builder made a list of his concerns, but now the one year
warranty has expired. Ilyce and Sam discuss home warranties and home inspections.
Q: I bought my house from a builder I'd never heard of. He dealt with an agent who said she'd also be my agent. I was a little wary of doing this, especially since I had never heard of the builder.
A few weeks after I bought the home, I noticed lots of problems. I started calling the agent, who had told me that whenever I needed to contact the builder to do so through her.
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The two of them came over one day to see what the problems were. He said he could fix everything. The agent listed all of these items, and we each kept a copy of it.
The next week, the builder came back and made some minor repairs but not all of them. Weeks went by, and I didn't hear anything from either one of them. I started contacting the agent again, but neither of them would contact me back until I started sending them registered letters to them.
I gave the builder a deadline but the only response I got was a registered letter detailing the work he'd done. By this time, the one-year warranty that he'd purchased expired.
The agent and the seller are dodging me. I know now that the two of them were stringing me along so that I would trust them enough not to delve into filing a claim to make him either do the repairs or to pay to have them fixed until the twelve months was up.
While I'm ashamed of myself for being so gullible and trusting and not doing a more-thorough job of researching the builder and the agent and, subsequently, of figuring out the warranty, I don't feel that I should have to pay for these repairs. What should I do?
A. Unfortunately you should have paid more attention to your instincts and should not have purchased from this builder.
Now you know better. You should have fully researched the builder, asked for references, seen his other work, talked to other buyers of this seller’s properties to see if they were satisfied after closing, hired a home inspector to review the construction of the home during the building process and sought out independent advice from either an attorney or a buyer’s agent to help you through the buying process.
Now you need to review the sales contract and home warranty to determine what you can do to get the seller to make repairs.
Many, but not all, contracts provide that the seller and buyer of a home will do a closing inspection of the home to determine what items still need to be corrected by the seller. If you contract has this language and your meeting with the builder created what is generally called a “punch list” of items, the seller has a contractual obligation to fix the items listed on the punch list.
On the other hand, many of the warranties builders provide have so many loopholes that the warranty is essentially worthless. And if the builder is unwilling to abide by the terms of the warranty, you, as a buyer, may be out of luck. If he decides not to fix your house, the builder could simply go bankrupt or go out of business and you’d have no recourse.
While you indicated that the warranty expired, some warranties require only that you give notice of the defects to the seller prior to the expiration date of the warranty. The list you made that the seller signed may be sufficient notice to keep you within the warranty period for those items. In some cases, the warranty period expires unless you sue the builder within the warranty period.
You should also obtain estimates from other contractors to fix those items that the builder failed to fix. Once you know what it will cost you to fix the defects you can decide what makes more sense: suing the builder or fixing your house and moving on with your life.
If you decide to pursue the builder, you should first talk to an attorney that has experience in construction litigation to determine how much it will cost you to sue the seller, and to go over the fine print on your warranty.
Finally, you may want to talk to the building department in the town in which you are located and see if the building inspector is willing to talk about the problems you’re having with the builder.
While I don’t advocate that you badmouth the builder, you can objectively express the issues involved and hope that the building department will have second thoughts about letting the builder build in your community in the future.
But tread carefully. Honest differences of opinion can exist between a buyer and a builder as to the quality of construction and what constitutes a defect in construction. If you are unreasonable in your demands, and make outrageous claims that are without merit, the builder could sue you.
Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce R. Glink’s latest book is 50 Simple Steps You Can Take To Sell Your Home Faster and For More Money In Any Market. If you have questions for them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact them through Ilyce’s website www.thinkglink.com