Also known as: builder-vendor · builder vendor · builder vendors
Written by attorneys · grounded in primary & secondary sources — see 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.
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Courts 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…