Unfortunately, dealing with the serious and often financially debilitating issues related to defective stucco is nothing new to many Pennsylvania homeowners. In addition to repairing defective work, a homeowner’s status as a first purchaser of the home, as opposed to a subsequent purchaser, impacts his or her case against the builder. Recently, the Pennsylvania Supreme Court decided to rule on this issue – a ruling that will surely be impactful to homeowners and builders alike.
Back in late 2012, the Pennsylvania Superior Court, in Conway v. Cutler Group, Inc., sharply altered the law governing the implied warranty of habitability (the “Warranty”) as it pertains to subsequent purchasers’ right to sue a homebuilder. There, the Superior Court extended the protection of the Warranty to subsequent home buyers, thereby altering the decades-old rule that limited standing to bring a claim against the homebuilder for breach of the Warranty to the original home buyer. This was good news for the numerous Pennsylvania homeowners impacted by defective construction involving stucco and who did not purchase their home from the homebuilder as an original owner. While the Superior Court’s decision still stands as the law in Pennsylvania, the Pennsylvania Supreme Court has decided to take up the issue for itself having granted a petition for appeal in the case.
Current Law Under Conway
Generally, the Warranty requires that homebuilders construct homes in a reasonably workmanlike manner, and that the homes be reasonably fit for living. A builder’s failure to meet these two fundamental requirements may make the builder liable to the homeowner for breach of the Warranty. Under the current law, subsequent home buyers who discover defects in the construction of their homes may bring suit against the homebuilder for a breach of the Warranty despite having had no contract or direct relationship with the builder.
Potential Impact of the Supreme Court’s Decision to Hear the Issue
Last month, the Supreme Court granted the Cutler Group, Inc.’s petition for appeal framing the issue to be decided as whether “the Superior Court wrongly decide[d] an important question of first impression in Pennsylvania when it held that any subsequent purchaser of a used residence may recover contract damages for breach of the builder’s implied warranty of habitability to new home purchasers?” The Court’s answer to this question may mean that the decades-old rule of limiting the scope of the Warranty is definitively dead, or it may mean a return to the restriction on the Warranty limiting its protection to original home purchasers. Whatever the outcome, homebuilders and homeowners alike should stay tuned for the Court’s decision. We will continue to monitor the case and will update the blog as news develops.
For questions or concerns about defective construction, including stucco, please feel free to contact us.
Jennifer M. Horn is Senior Counsel at Cohen Seglias and a member of the Construction Group. She devotes her practice to the areas of construction litigation and real estate.
Matthew G. Tom is an Associate at Cohen Seglias and a member of the Construction Group.