Homeowners Cannot Assert Claims Against Subcontractors For Breach Of Implied Warranty

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Since 1979, Arizona courts have recognized an implied warranty of workmanship and habitability (“Implied Warranty”) regarding new home construction. Although a contractual relationship (“privity”) is generally required to bring a claim for breach of the Implied Warranty, since the doctrine was first recognized, the Arizona Supreme Court has created two exceptions.

The first exception allows a subsequent home purchaser to bring an Implied Warranty claim against a builder-vendor, because latent defects in a home are equally devastating to original and subsequent purchasers, and the builder vendor, being in the better position to prevent major problems, should bear the costs of poor workmanship. More than two decades later, the Supreme Court created an additional privity exception, allowing Implied Warranty claims against a non-vendor builder. In that instance, the court reasoned that “innocent buyers of defectively constructed homes should not be denied redress on the implied warranty simply because of the form of the business deal chosen by the builder and vendor.”

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