MBE Rules · Real Property
New-Construction Warranty
Implied warranty of quality (new homes)
The rule
Builders of new homes impliedly warrant workmanlike construction and habitability to the first purchaser — and in many states to subsequent purchasers for latent defects appearing within a reasonable time.
In plain English
The New-Construction Warranty means that builders are expected to construct homes in a way that is both workmanlike and suitable for living. This warranty typically covers the first buyer and often extends to later buyers for hidden defects that show up within a reasonable period after construction.
Worked example
A couple buys a newly built home and discovers a significant plumbing issue that was not visible during the purchase. They report the problem within six months of moving in. The builder is responsible for fixing the plumbing issue under the New-Construction Warranty.
Memory hook
New homes come with a warranty: built right or built to last!
The trap
Exams may confuse students by including details about visible defects that do not fall under the warranty, leading candidates to misapply the rule. Students should focus on the distinction between latent and patent defects.
How examiners test it
Questions often present scenarios involving newly constructed homes with defects, asking whether the builder is liable under the warranty. Look for clues about the timing of the defect's discovery to determine coverage.
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