In a case of first impression, the Superior Court of Pennsylvania in Conway v. Cutler Group, Inc., held that the implied warranty of habitability applies to a second or subsequent purchaser of a home. The Superior Court decision will allow the homeowners to proceed with their lawsuit against The David Cutler Group, Inc. in their claims that Cutler failed to properly install stucco on the home.
In Conway, a case which originated in the Bucks County Court of Common Pleas, the property owners who were the second owners discovered that water was infiltrating their home. Following an inspection, it was discovered that defects along the roof eave and wall junctures were improperly flashed. There was insufficient seal around expansion joints, a lack of expansion or control joints, and other defects relative to the stucco installation. The inspector recommended that the entire house be stripped of its stucco and replaced.
The homeowners filed a complaint against Cutler asserting a breach of the implied warranty of habitability. It had always been the law in Pennsylvania that the implied warranty of habitability only extended from the builder to the initial purchaser. Since the homeowners in this case were the subsequent owners of the home, Cutler asked the court to dismiss the complaint as a matter of law. The court granted Cutler’s preliminary objections, dismissed the complaint and the homeowners appealed to the Superior Court.
The Superior Court determined that the implied warranty of habitability would apply to a subsequent purchaser. The implied warranty is designed to “equalize the disparate positions of the builder-vendor and the average home purchaser by safeguarding the reasonable expectations of the purchaser who is compelled to depend upon the builder-vendor’s greater manufacturing and marketing expertise.” As a matter of public policy, the implied warranty of habitability shifts the risk of hidden construction defects from the doctrine of buyer beware and makes it the responsibility of the builder. The court determined that since the warranty is based upon these public policy considerations, the contract between the builder and a subsequent purchaser is not necessary.
The court believes that a second or subsequent purchaser is entitled to the same assurances as the original purchaser that the home built by the builder is habitable. The court pointed out that if a hidden structural defect does not become apparent until a home is five years old, and the original purchaser no longer owns the home, the current homeowner should not be in a position where they cannot recover against the builder for that hidden defect. The simple fact that the home was sold should not relieve the builder of the responsibility to deliver a home free from hidden defects.
Despite the court’s holding, a plaintiff still has the burden to prove that the alleged defect was hidden, that it is attributable to the builder’s design or construction and affects the habitability of the home. In this case it remains to be seen whether the plaintiffs will be able to prove each of these elements, however, by this ruling, a complaint would no longer be dismissed at early stages of litigation based upon the fact that the plaintiff is a second or subsequent purchaser.
Both contractors and homeowners should be aware of this important change in construction law. The attorneys at Benner and Wild are experienced in representing both homeowners and builders in these types of claims and are prepared to discuss these issues with you.