Opinion ID: 2616171
Heading Depth: 1
Heading Rank: 4

Heading: current warranty of habitability

Text: In Washington, the implied warranty of habitability currently is limited to the sale of new houses. See Klos, at 568; House, at 436; Gay v. Cornwall, 6 Wn. App. 595, 597, 494 P.2d 1371 (1972). Many jurisdictions impose a similar limitation on the warranty. See, e.g., Carpenter v. Donohoe, 154 Colo. 78, 388 P.2d 399 (1964). The structure purchased by the Frickels was an apartment complex. Accordingly, given the existing case law in Washington, the warranty arguably should not apply, notwithstanding the majority's opinion that the warranty might apply to such a transaction in the proper case. As alluded to by Sunnyside, the rationale supporting this limitation flows from the notion that the average home buyer is ignorant of construction quality, whereas one who purchases commercial property is sufficiently sophisticated to demand an inspection, and sufficiently wealthy to afford one. See generally Fain v. Nelson, 57 Wn.2d 217, 223-24, 356 P.2d 302 (1960) (warranty protection does not extend to an experienced dealer in real estate who could have inspected a leaky roof but failed to do so). The weakness in this preconception manifests itself in the facts of this case. The Frickels, whom the majority characterize as commercial investors, had no experience buying real property, other than that acquired in purchasing their home 30 years ago. Thus, one could hardly say they were sufficiently sophisticated to demand an inspection, even if they could afford one. Furthermore, the rationale supporting this limitation presupposes that inspection would reveal the defect. Adequate inspection of a foundation is very difficult because it is hidden once the structure is completed. In fact, the trial court found that the latent structural defects in Sunnyside's construction could not reasonably have been observed at the site by the Frickels, even through the use of an expert contractor at the time the project was completed. As the foregoing suggests, the court imposed requirement that the structure be a house is supported by questionable rationale. Other states have extended the warranty beyond houses. See, e.g., Pollard v. Saxe & Yolles Dev. Co., 12 Cal.3d 374, 380, 525 P.2d 88, 115 Cal. Rptr. 648 (1974) (apartment building); Gable v. Silver, 258 So.2d 11, 18 (Fla. Dist. Ct. App. 1972) (condominiums). In Allen v. Anderson, 16 Wn. App. 446, 557 P.2d 24 (1976), the Court of Appeals considered the warranty in regard to a 4-unit apartment complex. Likewise, this court should extend warranty protection beyond houses to include all residential dwellings. The implied warranty of habitability does not apply unless the dwelling is new; Klos v. Gockel, 87 Wn.2d at 568; House v. Thornton, 76 Wn.2d at 436; Allen v. Anderson, 16 Wn. App. at 448; Gay v. Cornwall, 6 Wn. App. at 595; but the court will consider a dwelling to be new if it was occupied to promote its sale. Klos, at 571. In short, the sale must be fairly contemporaneous with completion and not interrupted by an intervening tenancy unless the builder-vendor created such an intervening tenancy for the primary purpose of promoting the sale of the property. Klos, at 571. One reason for this limitation appears to be the need to insulate builders from liability for defects in older homes caused by intervening tenants. Although the limitation makes sense with respect to nonstructural defects ( e.g., damage to interior and exterior surfaces), it is unsupportable where the defects complained of are structural ( e.g., defective foundations and supporting beams). If neither age nor an intervening tenancy could affect the structural integrity of the dwelling, neither age nor the existence of an intervening tenancy is relevant to the question of whether the warranty liability should attach. [1] The newness requirement implies that a builder should not be liable for defects which become manifest long after completion of the structure. However, the builder limitation statute, RCW 4.16.310, bars commencement of a suit that does not accrue within 6 years of substantial completion. Accordingly, the builder need not warrant the quality of his construction indefinitely, but rather for merely 6 years. This requirement is not unreasonable, especially where the defect complained of is latent and structural. See, e.g., Barnes v. Mac Brown & Co., 264 Ind. 227, 342 N.E.2d 619 (1976) (court extended warranty coverage to second purchaser where defect in basement wall failed to materialize until after second purchaser took possession). Accordingly, this court should not limit warranty protection to the sale of new residential structures. This court will imply the warranty of habitability only to commercial rather than casual or personal sales. Klos, at 570. In my opinion, this means the builder must be in the business of building residential structures. The reason for the requirement flows from the justifiable belief that a nonprofessional house builder should not be deemed to warrant the same quality of construction demanded of his professional counterpart. Consistent with this belief, this court limits the liability of one who builds a dwelling for his personal residence, and subsequently sells it to another. Because such a builder's construction is casual and for personal purposes, I agree that liability for defective construction should not attach. Accordingly, I do not suggest that the warranty of habitability should apply to nonprofessional builders, but rather that the warranty should apply to a professional builder, regardless of whether he also is in the business of selling residential structures. Even if the builder is a professional, this court will not imply the warranty of habitability unless the residential structure was built for purposes of resale. Klos, at 570. Although Sunnyside clearly is a professional builder, i.e., in the business of building, it did not build Sunnyside Sands for the purposes of resale. As late as the completion of phase two of construction, Sunnyside intended to operate the apartment complex for its own benefit. The majority emphasizes this fact throughout its opinion, arguing that this alone justifies refusal to extend the warranty to this case. This limitation was stretched to its outer limits in Klos v. Gockel, 87 Wn.2d 567, 554 P.2d 1349 (1976). In Klos, the court found that Mrs. Gockel constructed the house primarily for personal occupancy, but also with the idea that eventually the house might be sold. Klos, at 568. This view is questionable. Mrs. Gockel and her husband had been in the business of building, occupying and then selling houses for many years. After her husband's death, she built the defective house, lived in it approximately 1 year, and then sold it; built a second house, lived in it for a time, and then moved to Arizona. Upon her subsequent return to this state, she built a third house. Klos, at 569 n. 1. Mrs. Gockel clearly built each of the houses for purposes of resale. Nevertheless, the principle enunciated in Klos v. Gockel , read in context with the facts set forth in the opinion, lends support to the contention that the warranty should not run to the Frickels. The question is whether the requirement set forth in Klos v. Gockel should retain validity. This court already requires a commercial builder to be regularly engaged in building before it will impose warranty liability. Klos v. Gockel, supra at 570. This requirement precludes imposition of warranty liability upon a nonprofessional builder who sells a home constructed originally as his own residence. The requirement that the dwelling be built for purposes of resale is simply cumulative when applied to the nonprofessional builder, and thus is irrelevant in that context. The requirement is insidious, however, when applied to the routine practice of a professional builder, like Mrs. Gockel, who constructs a dwelling, occupies or rents it for personal purposes, and then sells it to one who relies on the builder's reputation as a professional. In this latter case, form prevails over substance and the warranty is denied one who deserves its protection. The record in this case clearly shows that Sunnyside is a commercial builder, regularly engaged in the business of building apartment complexes. Although Sunnyside originally did not intend to sell the complex when construction began, it would be spurious to suggest that this fact, even if known by the Frickels, would have caused them to lessen their reliance on Sunnyside's skill and reputation as a professional builder. The commercial builder-vendor is responsible for defects because he controls construction, is in a position to inspect, and holds himself out as a professional. If construction is defective, an innocent purchaser should not bear the loss. Accordingly, warranty protection should not depend upon satisfaction of the for purposes of sale requirement. As it now exists, the implied warranty is one of habitability. Klos v. Gockel, supra at 570. In Klos, the court explained the concept of habitability as follows: As a final matter, we note that the house was habitable at all times. The gist of the implied warranty is that the resulting building will be fit for its intended use, i.e., habitation. ... The respondents never moved out of the house and were still occupying it at the time of trial.... (Citations omitted.) Klos, 571. Although the court in Klos relied upon failure to move out as evidence of habitability, moving out cannot be the acid test of habitability. In House v. Thornton, 76 Wn.2d 428, 457 P.2d 199 (1969) the plaintiff remained in the defective house 23 months before bringing suit. This court found that the house was uninhabitable without mentioning whether the plaintiffs moved out. The Court of Appeals reached a similar result in Gay v. Cornwall, 6 Wn. App. 595, 494 P.2d 1371 (1972). Furthermore, in the landlord-tenant area, breach of the implied warranty of habitability is a defense to an unlawful detainer action. Foisy v. Wyman, 83 Wn.2d 22, 515 P.2d 160 (1973). In this situation, the tenant, by definition, is living in the dwelling when the court deems it uninhabitable. Furthermore, although the tenant is required to vacate the premises to have a valid claim of constructive eviction, a tenant may prove constructive eviction without proving actual uninhabitability. See Stoebuck, The Law Between Landlord and Tenant in Washington, 49 Wash. L. Rev. 291, 348 (1974). Accordingly, the doctrine of constructive eviction is not strictly tied to the concept of habitability. The concept of habitability is ill suited to the facts of this case, and most cases involving alleged building defects. The Frickels, for example, are not claiming that Sunnyside Sands is uninhabitable as to them personally; they do not live in the complex and apparently have suffered few vacancies as a consequence of the defects. Reduced to its essence, the Frickels' claim is that Sunnyside sold them a defective, not uninhabitable, residential structure. In my opinion, this claim is analogous to a claim for breach of the implied warranty of merchantability. See Comment, Washington's New Home Implied Warranty of Habitability  Explanation and Model Statute, 54 Wash. L. Rev. 185, 211 (1978). Regardless, as a matter of public policy, this court should not require a purchaser to move out of his home before seeking warranty protection from the builder-vendor. When a builder places a residential structure in the stream of commerce, he should be deemed to warrant that the structure is free from serious structural defects, not that the purchaser will not be forced to move out of his home.