Also known as: vendor builder · vendor-builders · builder-vendor
Written by attorneys · grounded in primary & secondary sources — see below
A seller who both designs and constructs new residential property and then conveys it to the initial buyer. The vendor-builder's work triggers an implied warranty that the home was built in a reasonably workmanlike manner and is fit for human habitation.
Venture Holdings built and sold a new subdivision home to Oliver. Two years later Maya bought the home from Oliver and discovered that the geothermal system had been installed so poorly that mold rendered the house barely habitable. Maya sued Venture Holdings for breach of the implied warranty of workmanlike construction. Because the jurisdiction requires privity with the original vendor-builder, Maya's claim failed.
United Buildings constructed a spec house and sold it to Bridget. Bridget resold the home to Xavier only weeks later. Xavier discovered extensive hidden termite damage and faulty framing that made the house unsafe. Xavier sued United Buildings on the implied warranty of habitability. The vendor-builder moved to dismiss for lack of privity.
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Courts are divided. Some jurisdictions limit enforcement of the warranty to the original buyer in contractual privity with the vendor-builder. Other jurisdictions extend the warranty to later purchasers when latent defects affecting habitability appear after resale.
The plaintiff must show that the home was not constructed in a reasonably workmanlike manner and that the resulting defects render it unfit for human habitation. Serious foundation, insulation, or structural problems that affect livability satisfy the standard.
Some authorities treat the warranty as tied to the original sale of new construction. When the home has been occupied for years before the second sale, courts following the restrictive view often hold that the structure is no longer new for warranty purposes.
Recovery remains possible only if the plaintiff is the original purchaser in privity. Later buyers must rely on claims against their own seller, tort theories, or any express warranties that run with the property.
…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…