Also known as: vendor builder · vendor-builders · builder-vendor
Written by attorneys — see sources 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.
In 1974, IRM Corporation acquired a 36-unit apartment complex that had been built in 1962 and 1963. George Becker later leased one of the apartments in the complex. On November 21, 1978, Becker slipped and fell against the frosted glass shower door in his apartment; the door was made of untempered glass, broke on impact, and severely lacerated his arm. Prior to the acquisition, two IRM officers walked through most of the apartments and observed that all shower doors were of frosted glass and appeared identical. From acquisition until the 1978 accident, IRM received no reports of accidents involving the shower doors and was not advised that any were made of untempered glass. After the accident, IRM learned that 31 of the 36 shower doors were untempered; its maintenance man replaced them and stated that the only way to differentiate the glass types was by a very small mark in the corner of each piece, which was not visible upon ordinary inspection. Becker sued IRM for personal injury, asserting causes of action for strict liability and negligence. IRM moved for summary judgment. Becker filed no opposing affidavits. The trial court granted summary judgment and denied reconsideration. While the case was pending, Becker settled with the builder and a door assembler and installer for $150,000 plus an additional $50,000 contingent on the outcome against remaining defendants.
View caseCourts 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…