The Joyner Law Firm handles a multitude of cases that fall under the New Home Warranty Act (NHWA). This article will summarize some recent case law and how the NHWA functions.
The NHWA provides the exclusive remedies, warranties, and prescriptive periods as between the builder and owner relative to new home construction. Stokes v. Oster Dev., Inc., 01–780 (La.App. 5 Cir. 1/15/02), 807 So.2d 987, 990. Louisiana jurisprudence has consistently held that the NHWA is the exclusive remedy when the cause of action arises from construction defects, violations of the building code, or poor workmanship Prestridge v. Elliott, 847 So.2d 789, 793 (La.App. 3 Cir. 6/4/03).
A purchaser of the home does not include the purchaser’s children as they are not the “owners”. If your child is injured by a construction defect, the exclusive remedy of the NHWA does not apply to him/her. For reference, the 1st circuit has held that a minor daughter could not be limited to exclusive remedies of New Home Warranty Act (NHWA) Allemand v. Discovery Homes, Inc., 2009-1565 (La. App. 1 Cir. 5/28/10), 38 So. 3d 118.
Next, The New Home Warranty Act provides the following express warranties:
(1) One year following the warranty commencement date, the home will be free from any defect due to noncompliance with the building standards or due to other defects in materials or workmanship not regulated by building standards.
(2) Two years following the warranty commencement date, the plumbing, electrical, heating, cooling, and ventilating systems exclusive of any appliance, fixture, and equipment will be free from any defect due to noncompliance with the building standards or due to other defects in materials or workmanship not regulated by building standards.
(3) Five years following the warranty commencement date, the home will be free from major structural defects due to noncompliance with the building standards or due to other defects in materials or workmanship not regulated by building standards. La. R.S. § 9:3144.
The warranty commencement date is the date when legal title is conveyed to the initial purchaser or the date the home is first occupied, whichever occurs first. La. R.S. 9:3143(7). Concerning the five-year warranty provided under La. R.S. 9:3144, the NHWA defines “major structural defect” as “... any actual physical damage to the following designated load-bearing portions of a home caused by failure of the load-bearing portions which affects their load-bearing functions to the extent the home becomes unsafe, unsanitary, or is otherwise unlivable[.]”
Importantly, the court has granted great leeway when it comes to classifying major structural defects. For example, in Campo v. Sternberger, the homeowners/plaintiffs sued the builder after major plumbing issues arose after being in the home for over two years. However, the plaintiffs did not allege that the plumbing itself was defective. Rather, the plaintiffs claimed, as the trial judge found, that the plumbing issues were a result of the failing foundation. The court would go on to hold that the plaintiffs were allowed to argue their plumbing issues were foundation-related and were able to avoid the two-year prescription that is attached to plumbing defects. Campo v. Sternberger, (La. App. 5 Cir. 11/19/15), 179 So. 3d 908, 919, writ denied, 2016-0085 (La. 3/24/16), 190 So. 3d 1196.
Additionally, the NHWA makes the burden on the builder to show that they tried to comply with the NHWA. Related to that, the court in Williams v. Wood held that a builder had notice about the defects, simply by the fact the plaintiffs filed a NHWA claim alleging a failure to remedy or repair defects. The court also held that the builder has the burden of proving an owner prevented them from remedying the defect to comply with the NHWA. Williams v. Wood, 2019-0894 (La. App. 4 Cir. 3/25/20), 294 So. 3d 581, 589–90, writ denied, 2020-00560 (La. 9/29/20), 301 So. 3d 1178.
As for the damages, the NHWA provides that damages awarded under the Act shall not exceed the reasonable cost of repair or replacement necessary to cure the defect, and damages with respect to all defects in the home shall not exceed the purchase price of the home. LSA–R.S. 9:3149. Generally, an owner in an action on a contract to build, the appropriate measure of damages resulting from the contractor’s breach of the implied warranty of good workmanship is generally the cost of repairs when the thing can be repaired. Graf v. Jim Walter Homes, Inc., 97–1143 (La.App. 1st Cir.5/15/98), 713 So.2d 682, 691.
However, the court in Catalanotto v. Homes held that the plaintiffs/owners were entitled to full purchase price of the home based upon its factual finding that numerous repairs were attempted, but nothing could fix the problems with the home Catalanotto v. Homes, 2014-1274 (La. App. 1 Cir. 4/24/15), writ denied sub nom. Catalanotto v. Jim Walter Homes, 2015-1010 (La. 9/11/15), 176 So. 3d 1040.
Additionally, under La. R.S. 9:3149 (A), which states in part, “If a builder violates this Chapter by failing to perform as required by the warranties provided in this Chapter, any affected owner shall have a cause of action against the builder for actual damages, including attorneys fees and court costs, arising out of the violation.” Based on the statute, if a court finds a builder violated the NHWA, then the owner/plaintiff is entitled to recovery of attorney’s fees and costs under the New Home Warranty Act, as noted by the 5th circuit in Dauterive v. Tile Redi, LLC, 20-96 (La. App. 5 Cir. 10/5/20), 304 So. 3d 1076, 1082, writ denied, 2020-01280 (La. 1/12/21), 308 So. 3d 710.
Navigating the various regulations and rules of the NHWA can be difficult. That is why it is important to retain a law firm such as the Joyner Law Firm to help. If you believe your home was defectively constructed, contact the Joyner Law Firm for a free consultation.