The question before us whether the implied warranty extends to subsequent purchasers. It does cover latent defects not discoverable by a reasonably prudent inspection of the building at the time of sale. Why? Because: (1) a builder should be in business to construct buildings free of latent defects; (2) the buyer cannot, by reasonable inspection or examination, discern such defects; (3) the buyer cannot normally rely on his own judgment in such matters; (4) in view of the circumstances and the relations of the parties, the buyer is deemed to have relied on the builder; and (5) the builder is the only one who has or could have had knowledge of the manner in which the building was built. As between the builder and owner, it does not matter whether there has been an intervening owner. The effect of the latent defect on the subsequent owner is just as great as on the original buyer and the builder is no more able to justify his improper work as to a subsequent owner than to the original buyer. The above is based on public policy. A real estate attorney can explain further.
Courts have held that that the implied warranty of habitability and good workmanship is implicit in the contract between the builder and original purchaser and is automatically assigned to the subsequent purchaser. This interpretation of an implied warranty as a contract remedy is consistent with our court decisions. Courts have discussed the implied warranty of habitability explicitly in terms of contract law and held that it, like any other provision, could be waived.
If you have any questions regarding implied warranty, we invite you to contact us at 713-513-5566. Our experienced attorneys can help you make the right decision.