What Type of Home Warranty Can Buyers Expect in New York?
The purchase of a new home is always a big move, regardless of one’s age or financial status. When considering such a purchase, one question that may come to mind is what protections do I have against the seller down the road? Am I entitled to any type of warranty on the home? The sad reality is that in New York, as a general rule, buyers are not entitled to a home warranty, unless expressly and separately bargained for.
New York is known as a caveat emptor state, which basically means that buyers generally take title without a warranty as to the condition of the property or any recourse if the buyer subsequently discovers an unacceptable condition after the closing. Like most things in the law, however, there are of exceptions (albeit slight) to the rule.
For anyone who’s purchased residential real estate in New York, you’re probably familiar with the mandatory Property Disclosure Form that most sellers complete prior to close. For those of you unfamiliar with the disclosures, this form is a detailed analysis which relates to the condition of the environmental, structural, mechanical and property service aspects of the home as understood to the best of the seller’s knowledge. When a seller completes the form, he subscribes his name to the document and confirms its accuracy. So long as a seller has not materially lied or knowingly failed to disclose a known condition or material defect, there is little recourse that a buyer has against the seller. If, however, the seller has lied or failed to disclose a known material defect, the state recognizes a buyer’s right to recover against that seller for his falsification and the damages actually suffered.
Where a seller has truthfully and fully completed a property disclosure, however, New York law shifts the burden and responsibility of discovering any other defective conditions to the buyer. For all homes, except new builds, typical contract language provides that all warranties and representations made by the seller expire once the deed has been delivered, unless specific warranties are expressly stated to survive the closing. Translated, this means that once a transaction closes, the purchaser is accepting any conditions (known or unknown) that may exist at the property. For this reason, it’s critical for a buyer to conduct a full and thorough inspection of the property prior to close, because, once the sale closes, he or she will be stuck with any conditions that could have been discovered.
All of that said, there is one instance outside of the exceptions discussed where a home buyer can secure an actual warranty on a home, and that is on a new build. Assuming you are the first person to purchase a home that is intended to be your primary residence, the builder will provide you with a warranty that covers construction defects, flaws in the plumbing, electrical, heating, cooling and ventilation systems servicing the home and material defects. These warranties often have monetary limits attached and expire in stated periods depending on the nature of the warrantied item. Because of these time periods, it’s crucial that homeowners seeking to make a claim under their new home warranty do so timely and in accordance with the stated periods, or they might lose any rights they otherwise had.
The purchase of a home is definitely not a trivial matter. When it comes down to the nuts and bolts of your purchase make sure you know your rights both prior to and after the closing. Where questions do exist, seek the counsel of a competent professional, whether it be your attorney and/or your real estate agent.