In a case of first impression before the Appellate Courts in Pennsylvania, the Pennsylvania Superior ruled that the Implied Warranty of Habitability applied to a second or subsequent purchaser of a home.

In 2003, The Cutler Group (the “Builder”) built a home purchased by the Fields. In 2006 the Conways purchased the home from the Fields.  Two years later the Conways discovered water infiltration in their master bedroom.  The Conways sued the Builder asserting a breach of the implied warranty of habitability (the “Warranty”).  The Builder filed Preliminary Objections and the Bucks County Court of Common Please granted the P.O.’s and dismissed the case.

On appeal, the Pa Superior Court reversed the Lower Court and found that the implied warranty of habitability should now apply to subsequent homeowners.   The Pa Superior Court reasoned:

  • The Warranty is based upon public policy considerations;
  • There is no requirement for privity of contract to assert a breach of the Warranty;
  • A subsequent purchaser should be entitled to the same assurances from the builder regarding the habitability of the home as the original purchaser;
  • The risks of latent defects should rest with the builder as compared to a homeowner;
  • It is inequitable to shift the risk of latent defects to a subsequent homeowner;
  • The Warranty’s applicability should not depend on whether a property is still owned by the original homeowner or whether the property was sold.

This is a victory for homeowners and a setback for builders.  In a tough economy and stagnant construction industry it is devastating news to Builders. Now for 12 years (period of the statute of limitations) builders can be liable for latent defects that affect the habitability of the home. 

So what does this mean for you? First, if you had a case dismissed and you are within the time period to seek reconsideration, you need to file a Motion For Reconsideration and/or appeal. Second, if your case was dismissed and the statute of limitations has yet to expire then you should file a new case. There will be res judicata issues. However, you should cite the change in the law.  Third, if you have yet to file a lawsuit then it is a must that the original builder be included as a Defendant! 

This decision was handed down on November 5th.  The time period to file a Petition For Allowance of Appeal has yet to expire. I would be shocked if such a Petition is not filed. Stay tuned I would expect we may hear from the Pa Supreme Court on this issue.