Guerard's Real Estate Blog

Be Aware, An Illinois Builder Can Be Liable to Subsequent Purchasers for a Breach of The Implied Warranty of Habitability Regardless of a Valid Wavier in the Construction Contract with the Original Purchaser.

 

The recent opinion in the case of Fattah v. Bim, 2015 IL App (1st) 140171 should be a cause of concern for home builder’s.  The result may be a surprise to many experienced members of the industry.   A home owner, a subsequent purchaser of the home (the “Second Purchaser”) brought an action against the builder of home (the “Builder”), alleging a breach of implied warranty of habitability for delivery of the home with latent defects in construction or design of a patio which led to its collapse (the estimated cost of repair was $70,000 to $100,000). The patio on plaintiff’s single-family home collapsed four months after he moved in.  Plaintiff had bought the house “as-is” from its original purchaser, who had waived the implied warranty of habitability on the house when she purchased it new three years earlier from the Builder.  In a matter of first impression in Illinois, the Court held the Second Purchaser, who purchased the home from the purchaser who bought it from the Builder (“Original Purchaser”) did not have knowledge of the builder’s valid waiver of the implied warranty of habitability entered into by the Builder with the Original Purchaser, and therefore was not bound by that waiver.  Further it held an “as-is” provision in an addendum to the real estate contract between the Original Purchaser and the Second Purchaser did not protect the Builder, as it was found not to be sufficient evidence of the Second Purchaser’s knowing waiver of the implied warranty of latent defects, a required element for a valid waiver. For more info see www.guerardr.com