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Arizona Appeals Court Affirms Implied Homebuyer Warranties

By August 3, 2021November 14th, 2022No Comments

By Howard Fischer | Daily Independent

Home builders can’t escape their legal responsibility to create “habitable” houses by instead giving buyers a different kind of warranty, the state Court of Appeals has ruled.

In a new ruling, the judges acknowledged Tina Zambrano signed an agreement with Scott Homes Development Co. that provided for a “limited warranty” on the property.

More to the point, that document said that warranty “is the only warranty applicable to the purchase of the property.” And it said that she, as the buyer, “waived any right to any other express or implied warranties dealing with things like habitability and workmanship.”

But Judge David Gass, writing for the three-judge panel, said her signature on that document is irrelevant.

“A new home buyer cannot waive — and a builder cannot disclaim — the implied warranty of workmanship and habitability,” (Judge Gass) wrote. “This prohibition precludes a waiver even when, as here, the building gives an express warranty in consideration for the waiver.”

And Gass said public policy supporting the idea of an implied warranty outweighs any argument about the freedom to contract.

Spencer Kamps, lobbyist for the Home Builders Association of Central Arizona, said this is the first court ruling of its kind saying sellers and buyers cannot waive the warranty rights they have under Arizona law by providing something else.

But Kamps, whose organization was not a party to the litigation, pointed out the implied warranty law is essentially a remedy for homebuyers created not by the legislature but instead by the Arizona Supreme Court. And he noted the appellate judges said that means they are bound by those precedents unless and until the top state court revisits the issue.

James Holland Jr. said his client Scott Homes was not seeking to avoid being responsible for any issues, saying it recognizes it has an obligation to build quality homes.

“It just wants to define everyone’s rights ahead of time to avoid disputes and misunderstandings,” he said, something that can be done with a specific warranty, spelled out in print, versus a more generic implied warranty.

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