A recent July 2021 ruling in the Arizona Court of Appeals regarding implied warranties in new home construction creates an important rule that all Arizona homeowners and construction companies need to understand. The rule, put simply, is this: An Arizona homeowner cannot waive – and a builder cannot disclaim in its purchase contract- the implied warranties of workmanship and habitability. This article helps home buyers and builders make sense of Arizona laws on both the implied and expressed warranties for home construction.
Arizona New Home Builder Warranties – Implied Warranties Cannot be Waived
The Daily Independent published an article on the recent ruling in regards to a case between Tina Zambrano and Scott Homes Development Co. In this case, the Arizona homebuyer, Tina Zambrano (“Zambrano”), signed a purchase agreement with Scott Homes Co. (“Scott Homes”) to build her a new home. The purchase agreement included language whereby the Buyer explicitly waived her rights to rely on the implied warranties dealing with workmanship or habitability.
After the trial court upheld Scott Homes motion for summary judgment against Zambrano’s implied warranty claim based on this provision, the Court of Appeals reversed. The Division One Court of Appeals three judge panel emphatically stated: “As we study the scales, we conclude the public policy supporting the implied warranty clearly outweighs the freedom-of-contract interest in the waiver’s enforcement. A new homebuyer cannot waive – and a builder cannot disclaim – the implied warranty of workmanship and habitability. This prohibition precludes a waiver even when, as here, the builder gives an express warranty in consideration for the waiver”.
Essentially, the Court of Appeals held the implied warranty of habitability and workmanship standards protected the homebuyer from waiving these warranty rights, even if there was language in the contract to the contrary.
The Court’s position is consistent with Arizona’s public policy in protecting consumers when it concerns express and implied warranties. For example, a contractor specifically warrants that each of the furnished materials and equipment will be new is expressly required to meet those detailed agreements. The Arizona Registrar of Contractors (AROC) also requires that a contractor must perform its construction work to a professional standard of workmanship.
Construction Warranty Claims and Arizona Construction Defect Law
A purchaser of a new home build usually has several potential claims for violations of warranties available when faced with construction defects in Arizona. Contractors – and home purchasers for that matter – would do well to recognize the power of well-drafted express warranties, the existence of the implied warranties (as discussed above), the many AROC rules and regulations, and those rules maintained in the Uniform Commercial Code. Both the common law and Arizona law must be analyzed together to assess a potential complaint or case involving home buyers and builders.
Because of the large number of construction defect claims brought by aggrieved home buyers over the past several years, contractors should be aware of the potential for construction warranty claims under three separate conditions.
- Expressed Warranties by Contract
An expressed warranty – put simply – is a confirmation of a workmanship responsibility by the contractor upon which the other side of the contract can rely on. Expressed warranties generally include the quality of the work, materials and equipment provided under the contract are done well, and are provided good and new. The warranty generally requires the Work will satisfy the requirements of the contract without any material defects. Work, materials, or equipment not satisfying these requirements can be rejected by the buyer because it is considered defective or unsatisfactory.
- Administrative Regulation by the Arizona Registrar of Contractor Standards
If the building or part of the construction project fails to adhere to workmanship standards, the homeowner may file a complaint with the Arizona Registrar of Contractors or, as it is commonly referred to, the AROC. Arizona law authorizes the AROC to suspend or possibly revoke a contractor’s license if the complaint is not resolved by settlement or in the Contractor’s favor after a Hearing. The AROC can require the contractor to repair any defective work as well as possibly provide compensation to the home buyer. Home buyers need to be aware of these options and the relevant statute of limitations involved. Feel free to contact this RSN to discuss these specific requirements and limitation periods.
- Implied Warranties Imposed Under Arizona Law
An implied warranty in Arizona is created by law without any express statement in the contract. These implied warranties are generally established through court decisions, and, per the recent ruling in the Zambrano case, these implied warranties cannot be waived by contract language that attempts to remove the contractor’s obligation to build the home to certain professionally acceptable standards.
Work with an Experienced Construction Law Attorney in Arizona
The attorneys at RSN Law have handled hundreds of real estate and construction cases in Arizona. Our attorneys can assist a new home buyer or contractor that finds themselves entangled in a dispute over the warranties and the professional workmanship standards which apply to new home construction in Arizona. We can review your contract, the construction work and any potential construction defects, and assess the overall validity of the claim. Contact us today at 480-712-0035 to schedule an appointment with our attorneys or make an appointment on the contact us page of our site.
RSN Law intends this article to be for informational purposes, not to be relief on a specific legal matter, and does not create an attorney-client relationship.