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Showing posts from October, 2015

Implied Warranty Update - Does Not Extend to Architects for Design Flaws

I just posted a few days ago about the Illinois implied warranty of habitability and the recent case of Fatah v. Bim, which found that contractors can be liable for a claim of warranty breach by a subsequent homeowner, not the initial buyer, even when the initial buyer signed a waiver with the builder.   The implied warranty is again in the news today, for a second Illinois appellate case, this time about whether the warranty extends to architects for alleged design flaws.  The court held that the warranty addresses the construction itself, not design, and therefore found the warranty did not extend to the architect.   The case is also significant for the court's consideration of warranty disclaimer language in the contracts signed by the buyers, as to potential liability of the developer and other defendants.  The court found the disclaimer, which was in all caps, was sufficiently conspicuous as a matter of law, and that the developer was not required to verbally bring the the d…

New Construction Implied Warranties Waived By the Initial Buyer Can Still Extend to Subsequent Buyers

Illinois recognizes an implied warranty of habitability by the builder-seller of a new construction home to the buyer, that the home will be suitable for habitation.  This warranty is breached when (1) there are hidden, latent defects in or around the residence, that (2) interfere with the dwellers' use of the residence. See Board of Directors of Bloomfield Club Recreation Association v. Hoffman Group, Inc.

Builders can disclaim this implied warranty and buyers can waive it, by an express written agreement, provided that the disclaimer specifically references the implied warranty of habitability, the disclaimer language is brought to the purchasers' attention, as well as the consequences of waiver, and the purchasers knowingly waive their right to pursue any action for breach of the implied warranty of habitability.  This is often coupled with a replacement, express warranty from the builder (for example, to fix any defects within the first year after construction).

The recen…