Also known as: builder-vendor · builder vendor · builder vendors
Written by attorneys — see sources below.
A seller of newly constructed residential property who, by virtue of that role, is subject to an implied warranty that the dwelling was designed and built in a reasonably workmanlike manner and is fit for human habitation.
GreenBuild sold a newly built home to Oliver under a standard contract. Oliver later resold the property to Maya. Maya discovered serious defects in the geothermal system that rendered the home barely habitable. Maya sued GreenBuild for breach of the implied warranty of workmanlike construction. The court dismissed the claim because Maya lacked contractual privity with GreenBuild.
IRM Corp. constructed an apartment building and sold the units to investors who then rented them out. A tenant suffered injury from a latent defect in the wiring installed during original construction. The tenant sued IRM Corp. on a strict liability theory. The court treated IRM Corp. as a builder-vendor whose responsibility for the defect continued after the initial transfer.
In 1974, IRM Corporation acquired a 36-unit apartment complex that had been built in 1962 and 1963. George Becker later leased one of the apartments in the complex. On November 21, 1978, Becker slipped and fell against the frosted glass shower door in his apartment; the door was made of untempered glass, broke on impact, and severely lacerated his arm. Prior to the acquisition, two IRM officers walked through most of the apartments and observed that all shower doors were of frosted glass and appeared identical. From acquisition until the 1978 accident, IRM received no reports of accidents involving the shower doors and was not advised that any were made of untempered glass. After the accident, IRM learned that 31 of the 36 shower doors were untempered; its maintenance man replaced them and stated that the only way to differentiate the glass types was by a very small mark in the corner of each piece, which was not visible upon ordinary inspection. Becker sued IRM for personal injury, asserting causes of action for strict liability and negligence. IRM moved for summary judgment. Becker filed no opposing affidavits. The trial court granted summary judgment and denied reconsideration. While the case was pending, Becker settled with the builder and a door assembler and installer for $150,000 plus an additional $50,000 contingent on the outcome against remaining defendants.
View caseCourts are divided. Some jurisdictions limit enforcement of the warranty to the original purchaser in direct contractual privity with the builder-vendor. Other jurisdictions extend the warranty to subsequent purchasers when latent defects impair habitability.
The plaintiff must establish that the home was newly constructed, that the builder-vendor sold it, and that the defects arose from unworkmanlike construction that rendered the home unfit for habitation. In restrictive jurisdictions the plaintiff must also show privity or an assignment of rights.
Restrictive courts emphasize that the warranty arises from the original contract between the builder-vendor and the first purchaser. Extending it to remote buyers would impose indefinite liability and undermine the contractual foundation of the obligation.
…underlying reasons for the enforcement of strict liability against the manufacturer, seller or lessor of products or the mass builder-vendor of homes do not apply to the ordinary landlord of a multiple family dwelling. "Such a landlord is not engaged in mass production whereby he places his product — the apartment — in a…