Implied Warranties Versus Extended Warranties

If your builder won't fix the problem, you have no alternative but to sue. Many states and local jurisdictions hold builders and developers to an "implied" warranty on the habitability of their homes. (Implied warranties are derived from common law as developed by case law.) In general that means a builder that is authorized to construct homes in a jurisdiction should for a specified time—at least a year or two— replace or repair anything that threatens a home's soundness and the safe functioning of its basic structures and components. While some states have statutes dealing with limitations on when certain actions can be taken in court, implied warranties always must be enforced through litigation.

The desire to avoid costly legal bills and draining court battles if something goes seriously awry helps

When going through an engineering report, note recommended or suggested major work. Then find out whether it was done or still lies ahead.

sell thousands of homes that are constructed by builders who offer the buyers long-term home-protection plans that are backed by insurance. The idea behind long-term warranties is to provide consumers with recourse other than litigation. Warranty plans provide member builders—and buyers of their homes—with ten years of protection against catastrophic losses arising from major design and structural defects. If a member builder refuses or is unable to fix a covered defect, insurance covers repairs that exceed the owner's deductible. (Not all plans charge deductibles—the New Jersey New Home Warranty Program, for example, doesn't.) A built-in disputesettling process usually is available to mediate between buyer and builder.

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