Explaining The Warranty of Merchantability When Building a New Home in Oklahoma

The Warranty of Merchantability is a term that doesn’t often come up when purchasing a new home, but is crucial when it applies. When you have a new home built, many buyers may not initially be concerned about the condition of the property and the long-term reliability of its construction. Most people purchasing a newly built home have a certain level of expectation that it meets all necessary livability criteria. However, home craftsmanship has ranges and levels of expertise. This mean you may not always get a reliable build.

One legal protection that buyers may invoke in this instance is the Warranty of Merchantability. While this warranty is more commonly in association with the sale of goods, it can also be relevant in the context of home buying. This is particularly the case when it intersects with the Warranty of Quality. Below, we explore what the Warranty of Merchantability entails, how it applies to new home buying, and the limitations that come with its use in civil procedures.

What is the Warranty of Merchantability

The Warranty of Merchantability ensures that goods sold meet a basic level of quality and are fit for the ordinary purposes for which such goods are used. In the context of real estate, this principle can be extended to the construction and sale of newly built homes, implying that the home must be constructed in a manner that allows it to serve its primary function: providing safe and habitable shelter. However, a house doesn’t have to be uninhabitable for it to fall under the Warranty of Merchantability.

The Warranty of Merchantability is related to, but is distinct from, the Warranty of Quality. The latter specifically relates to the builder’s or seller’s guarantee that the home meets certain standards of construction. Further, it guarantees it is free from defects that would impair its use or value. Both warranties emphasize that the work on the home must happen in a “workmanlike manner.” Essentially this means that the construction must meet the expectation of standards for professionals in the industry. A home that is not built to these standards may be unfit for its intended use, violating the Warranty of Merchantability.

How the Warranty of Merchantability Relates to New Homes

When purchasing a new home, buyers often assume that the property will be in perfect condition. However, the Warranty of Merchantability does not promise perfection. Instead, it guarantees that the home is reasonable and functional for ordinary residential use. This is where the distinction between perfection and reasonableness comes into play.

• Perfection: Buyers may expect a flawless home, with no defects or issues at all. However, homes are complex, and minor imperfections happen, even in new builds.
• Reasonableness: The Warranty of Merchantability focuses on whether the home is reasonably fit for habitation. This includes ensuring the home’s structure is sound, systems (plumbing, electrical, HVAC) function properly, and that the home meets basic safety standards.
• As it applies to new construction the warranty of merchantability does not require the new construction to be uninhabitable. Habitability applies more to rental property. New construction that violates the warranty of merchantability can still be habitable and constitute a breech of merchantability.

For example, minor cosmetic defects, such as uneven paint or a slightly misaligned floor, may not constitute a breach of the Warranty of Merchantability. However, more serious issues, such as faulty wiring or structural instability, could be grounds for a claim, as they would render the home unfit for ordinary use.

Example Arguments for Using the Warranty in Court

A buyer may argue that the home is not merchantable if they discover a significant issue, such as:

• Structural Defects: A buyer could argue that major foundation cracks or significant settling of the home that compromises its safety and stability violate the Warranty of Merchantability.
• Electrical System Issues: If the wiring in a home is faulty and poses a fire risk, the buyer may argue that the home is unfit for its ordinary residential use.
• Inadequate Insulation or HVAC Problems: Homes that fail to maintain a reasonable interior temperature due to poor insulation or HVAC malfunctions could also be in breach of the Warranty of Merchantability, as they would not provide adequate shelter.

Additionally, while the house may be habitable, it doesn’t mean that you don’t have a case. Significant imperfections in the home that would devalue it below the price of purchase can be an argument as well. Jeauguneat v. Jackie Hames Const. Co. is a case that allows the courts to not have to find the house uninhabitable to conclude a breach in the implied warranty.

Limitations of the Warranty of Merchantability in Civil Procedure

While the Warranty of Merchantability offers protection to new homebuyers, it is not without limitations. This is especially when used in civil lawsuits. Courts typically focus on whether the home is functional and fit for ordinary residential use, but not whether the home is perfect or exceeds expectations. Some limitations to invoking this warranty in court include:

1. Reasonable Time Frame: Claims under the Warranty of Merchantability must often be within a reasonable time after the buyer discovers a defect. This time frame can vary depending on the jurisdiction and the specific facts of the case.
2. Burden of Proof: The buyer must prove that the home fails to meet the standard of merchantability. This can be difficult when it comes to minor defects, as the court will determine whether the issues materially affect the use of the home.
3. Express Warranties: Many homebuilders provide express warranties, which can limit or supersede implied warranties like the Warranty of Merchantability. If the builder provides specific assurances about the condition of the home, the buyer may have limitations to those terms rather than broader protections under merchantability.

In order to avoid these limitations, you should always talk with a lawyer before pursuing a court case. These cases can cost you in the long run if they aren’t properly litigated. A lawyer with experience handling Warranty of Merchantability is your best chance of winning your breach of contract case.

Tulsa Civil Litigation Attorneys

The Warranty of Merchantability provides critical protection to new homebuyers by ensuring that their property meets a reasonable standard of quality and functionality. However, it does not guarantee perfection, and buyers must understand that minor cosmetic issues do not constitute a breach of this warranty. Given the complexities of proving a claim under the Warranty of Merchantability in court, and the limitations imposed by express warranties and legal deadlines, it is essential to have experienced legal counsel review your evidence.

Our business law attorneys can help determine whether your case has merit and can guide you through the process of seeking compensation for defects that render your home unfit for its intended use. We will review all your facts and evidence to ensure your case is airtight. Here at Kania Law Office, we pride ourselves on our ability to help new homebuyers with their property issues. For a free consultation, call us at 918-743-2233, or you can reach us through our Ask A Lawyer section.