Construction Warranties In New York, Sometimes Less Is More

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Any property owner considering construction work will want reassurance that the work will be done well, and will be free of defects for a specified timeframe. Given this, many contractors include a warranty clause in their contract. Such warranties (also called guarantees) require the contractor to correct any defects through additional work on the project over the specified time.

Warranties under New York law may be found where they are expressly written, but may also be implied through the conduct of the parties or by operation of the law. For example, if the contractor agreement did not contain any warranty clause, the owner would be able to bring a legal action against the contractor for breach of warranty or contract within six years of project substantial completion under the New York Uniform Commercial Code. Many property owners may be surprised to learn that they may actually be better protected with no warranty provision in the agreement, over one that states coverage for a shorter time frame.

Factors such as representations made, either by the contractor or supplier, in any printed materials may create an additional express warranty. Since these tend to be fact specific and will vary from project to project, they can exist on a case-by-case basis. Further, warranties can also be implied in the law, based either on legislation or the actions of the parties involved. The New York Appellate Division, in the matter of Lange v. Blake, established the existence of an implied warranty where a contractor makes representations of specific knowledge or skill, in their ability to perform the project work.

When the subject of construction is a new home, however, New York law provides an additional Housing Merchant warranty that applies to the construction of a new residence. Originally stemming from a 1988 court finding, this was later made part of Article 36-B of the NY General Business Law. It provides:

The home will meet or exceed building code requirements.
In the absence of any defined standard, the home must be constructed with workmanship and materials that meet or exceed locally accepted building practice standards.
One year from the warranty date the home will be free from defects due to a failure to have been constructed in a skillful manner.
Two years from the warranty date the plumbing, electrical, heating, cooling and ventilation systems of the home will be free from defects due to a faulty installation.
Six years from the warranty date the home will be free of material defects.

Whether a Housing Merchant warranty will apply to any specific property is based on numerous factors, including whether the owner already owns the land or if the builder is selling the lot and new home together. Also the homeowner may be required to provide advance notice to the contractor before being able to bring an action for violation of such warranty. For specific advice on your individual warranty or construction concern it may be wise to seek independent legal opinion. This article is not intended to provide legal advice or opinion.
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