Purchasing a newly constructed home is a big financial decision. One likely reason you may decide to purchase a new home is the expectation that it will have no major problems or defects. To help promote new home construction, the Louisiana New Home Warranty Act (“NHWA”) was passed into law. The purpose of this law is to provide mandatory warranties that builders must provide to new home purchasers. Builders are required to repair vices and defects in the homes that arise within a certain period of time. The NHWA also creates timelines for a homeowner to notify the builder of a defect and file suit.
UNDERSTANDING THE NHWA’S STRUCTURE?
The NHWA is incorporated into all contracts in Louisiana for the purchase or construction of a new home. A builder is not permitted to contract or opt out of the NHWA. In short, the NHWA is mandatory law meant to provide home purchasers a consistent set of rights to have home defects remedied.
The core purpose of the NHWA is to require builders to repair vices or defects in a new home. The builder’s duty to make repairs is triggered when he receives written notice of the defect. The warranties are not for an indefinite period-of-time. Under the NHWA, a builder is only required to warrant certain types of defects for a set period of time.
WHEN DOES THE WARRANTY BEGIN?
Since the warranties are for a specific amount of time, the date the warranty begins is important. The commencement date for the warranties provided under the NHWA is the date the home is conveyed to the purchaser. However, if the purchaser occupied the home prior to transfer of title, then the warranty will begin on the date the home was occupied.
WHAT IS WARRANTED AND FOR HOW LONG?
The Louisiana new home warranty at provides three different types of warranties each with a different duration. The warranties fall in one, two, and five-year increments.
One Year: The builder warrants that the home will not have any defects due to failure to comply with building standards. The builder also warrants defects caused by poor workmanship.
Two Years: The builder warrants for a period of two years the plumbing, electrical, heating, cooling, and ventilation systems. The builder must remedy any defects caused by failure to comply with building standards or due to poor workmanship.
Five Years: The builder warrants for a period of five years that the home will not have major structural defects due to failure to comply with building codes or poor workmanship. A major structural defect is a problem with a load bearing portion of the home. Examples of a major structural defect include foundation, beings, girders, lentils, columns, walls, partitions, flooring system, and roof systems. For something to constitute a structural defect needs to cause the home to be unsafe, unsanitary, or unlivable.
One problem with the NHWA is that it does not contain an exhaustive list of items that are warranted by the builder. Instead, the law requires a builder to warrant broad categories of defects that a builder must repair. This can cause disputes to arise between the builder and homeowner about whether a problem is covered by a warranty.
Another potential stumbling block is that all warranties created under the NHWA require evidence that the builder did not comply with building standards or the problem was caused by poor workmanship. Similarly, the law covers structural defects. Exactly what is considered a building standard, poor workmanship, or structural defect is not an exact science. It is not uncommon for disputes to arise between a homeowner and builder about whether a specific problem is warranted.
YOU ARE REQUIRED TO PROVIDE WRITTEN NOTICE TO THE BUILDER
The NHWA contains specific requirements for notifying the builder of a defect. Before you can file a lawsuit, you need to be sure that you have complied with the law’s notice requirements. After discovery of a defect you must provide written notice to the builder. To ensure that the builder receives notice, we recommend sending it by either registered or certified mail.
In the notice, you must describe the problem you are having with the home. In some situations, you may not understand what is wrong with your home. For example, you may notice drywall sagging or brown spots forming on the ceiling but do not understand how these problems are occurring. The best practice is to simply provide as many details about the problem in a letter to the builder and allow the builder to diagnose the problem.
You have up to one year after knowledge of the defect to send it notice. Failure to provide proper written notice within one-year of the notice requirement can lead to you forfeiting your claim against the builder. However, you should always act fast when you learn of a defect. The law cuts off your right to sue 30 days after the particular warranty at issue expires.
DO YOU NEED TO ALLOW THE BUILDER TO REPAIR THE DEFECT?
Yes. The law requires that you give the builder the opportunity to repair the defect. For some, this is problematic due to a lack of confidence in the builder’s ability to competently perform the work. One problem that often arises is a dispute over the scope of the defect. Some builders may insist on repairing a major defect as quickly and cheaply as possible.
If you believe your home has major defects, it is advisable to hire an independent contractor to inspect your home to provide an independent opinion about the cause of the problem and the how to repair it. Many builders will resist paying out-of-pocket to repair costly defects in which case you should consult with an attorney to discuss your options. A homeowner needs to comply with several specific requirements before suit can be filed. An experienced attorney in this area of practice can review your case to ensure that all requirements to file a lawsuit have been satisfied.
HOW LONG DO I HAVE TO FILE A LAWSUIT?
The NHWA contains both a prescription period and peremptive period. It also requires the homeowner to provide notice of a defect withing one-year of gaining knowledge of a defect. The deadlines for taking certain actions under the NHWA can be a little tricky.
A prescription period is the amount of time you have to file a lawsuit after gaining knowledge of a problem or defect with your property. A peremptive period is the maximum amount of time that you have to file a lawsuit.
The NHWA’s peremptive period requires you to file a lawsuit within 30 days of expiration of the warranty. This creates a conflict with the notice requirement because the notice requirement extends past the time to file a lawsuit. Our recommendation is that if you have a claim under the warranty, you should make it as quickly as possible and be aware of all deadlines for filing a lawsuit. If you have any question about the deadlines to file a claim, we recommend consulting an attorney.
WILL YOUR BUILDER REPAIR THE DEFECT?
Most builders will stand by their work and fix any problems with the property that are covered by the warranty. It is important to recognize that most new home defects are not serious and can be easily remedied.
Some builders are less scrupulous and may resist making suitable repairs especially when the defect is costly.
If the defect is serious, hiring an outside contractor to help diagnose the problem may help you understand if the builder is making suitable repairs.
In the event the builder refuses to repair a defect, your only option is to hire an attorney to enforce the warranty.
CAN YOU RECOVER ATTORNEY FEES?
Yes. The NHWA awards attorney’s fees if the homeowner is forced to take the builder to court to enforce the warranty. The purpose of the attorney fee provision is to ensure the homeowner is made whole if forced to hire an attorney.
The assistance of an attorney should not be necessary in most home warranty claims. However, if you have questions about your home warranty or feel your builder is not holding up his end of the bargain, contact us at (866) 970-0977 for a free consultation. Our law firm has handled hundreds of property damage and warranty claims. We are more than happy to discuss your case with you.