Conway v. The Cutler Group, Inc., 2014 Pa LEXIS 2084. (Pa. 2014)

Implied warranty of habitability owed by a home builder to a residential purchaser of a new home does not extend to the subsequent purchaser of the home.

Residential purchasers of a three-year-old home brought a claim against the builder of the home for breach of the implied warranty of habitability upon discovering water infiltration and latent construction defects. However, they were not in contractual privity with the builder; rather, they had purchased the home from its original owners. Therefore, the buyers could not recover contract damages against the builder under the implied warranty.

Notably, this case did not involve claims in negligence or breach of an express contract. Although cogent reasons existed for extension of the warranty to the second buyers, the Pennsylvania Supreme Court noted that any extension was the province of the state legislature. The court held that for there to be a claim for breach of implied warranty against a builder-vendor, there must be contractual privity between the parties.

This recent decision is certainly beneficial for home builders and other construction industry professionals.

Case Law Alerts, 4th Quarter, October 2014