Our firm represents contractors, subcontractors, builders, declarants and buyers/purchasers of improvements, including newly constructed single family homes/dwellings, in connection with their real estate needs, including purchases and sales, financings, refinancings, home mortgage and construction loans, equity lines, boundary and property disputes, claims involving title, and construction litigation.
In connection with construction litigation involving the purchase and sale of new construction in the State of Connecticut, claims between contractors/subcontractors/builders/declarants and buyers/purchasers often involve the Connecticut New Home Warranties Act.
The Connecticut Legislature enacted the New Home Warranties Act in an effort to protect new home buyers/purchasers from faulty materials or faulty workmanship. The New Home Warranties Act provides that every “improvement” shall be free from faulty materials, constructed in a workmanlike manner according to sound engineering standards and that the improvement is fit for habitation at the time of the delivery. The term “improvement” is defined to include newly constructed single family homes/dwellings, any conversion condominium unit conveyed by a declarant and any fixture or structure which is made a part thereof at the time of construction or conversion by any building contractor, subcontractor or declarant.
The New Home Warranties Act includes both express warranties and implied warranties.
Creating an express warranty is usually a part of every construction contract and is occasionally done unintentionally. There is no requirement that formal words such as “warranty” or “guarantee” appear anywhere in the contract, nor is it required that there be a specific intention to make a warranty. Express warranties are created by written promises, written descriptions of the project, including any plans or specifications, or any sample or model which was made part of the deal.
In the case of an improvement completed at the time of the delivery of the deed to the buyer/purchaser, an express warranty terminates or is valid until the earlier of (i) one year after the delivery of the deed or (ii) one year after the taking of possession by the buyer/purchaser.
In the case of an improvement not completed at the time of the delivery of the deed to the buyer/purchaser, an express warranty terminates or is valid until the earlier of (i) one year after the date of completion or (ii) one year after the taking of possession by the buyer/purchaser.
Implied warranties exist for the same period of time as express warranties and extend to cover conditions such as faulty materials and faulty workmanship. Also included in the implied warranty is a warranty for a particular purpose. A warranty for a particular purpose embraces the notion that if the buyer/purchaser makes known to the builder/contractor/subcontractor/declarant that he is relying on the project for a particular purpose and it appears that he is relying on the builder’s/contractor’s/subcontractor’s/declarant’s skill and judgment, there exists a warranty that the project is reasonably fit for its intended purpose. Implied warranties, however, do not apply to conditions that an inspection of the improvement would reveal to a reasonably diligent buyer/purchaser at the time the contract was signed.
In order for a builder/contractor/subcontractor/declarant to disclaim express and/or implied warranties it must be done explicitly. The disclaimer should clearly identify what warranty is being excluded or a specific defect or class of defect that is being excluded or cite the potential code violation that is being excluded.
General disclaimers stating that the improvement is being sold “as is” or paragraphs that disclaim “all implied warranties” do not satisfy the statutory requirements for disclaiming warranties under the New Home Warranties Act. If a builder/contractor/subcontractor/declarant is trying to disclaim a warranty, it is essential that the disclaimer explicitly state the nature of the warranty that is being disclaimed.
Claims under the New Home Warranties Act have also been brought in connection with several other statutory and common law causes of action under Connecticut law. For example, Connecticut courts have held that a breach of the New Home Warranties Act is also a breach of the Connecticut Unfair Trade Practices Act (CUTPA). Although breaches of the New Home Warranty Act are not a violation of CUTPA in every circumstance, there are many cases where the causes of action are intertwined. This factor is important for builders/contractors/subcontractors/declarants and buyers/purchasers because under CUTPA the prevailing party may be entitled to punitive damages as well as attorneys’ fees.