New York Law Pertaining to Home Warranties

Home purchasers in New York State often request warranties in connection with their home purchase. However, depending upon the type of property purchased, warranties on general construction and mechanical systems will not be obtainable. Without an express and separate warranty, any representations made in the contract of sale with respect to property condition will expire upon the delivery of the deed at closing. As such, the purchaser must generally discover all property defects prior to receiving the deed in order to expect a remedy from the seller. New York is a “caveat emptor” jurisdiction, meaning that buyers generally take title without a seller’s warranty as to condition and without recourse if the buyer discovers unacceptable conditions after the closing.

The most common warranty that is realistic for a New York real estate purchaser to obtain applies to new construction of a home to be used as the primary residence of the purchaser, who is also the first person to live in the home. In this instance, the warranty will have a monetary limit and will expire in stated periods of time depending on the type of item. A standard new home warranty will cover construction defects, flaws in the plumbing, electrical, heating, cooling and ventilation systems servicing the home and material defects. A new home warranty typically excludes appliances, which are covered by the manufacturer’s warranty. However, if the builder installed the appliances improperly, the purchaser can rightfully bring a claim under the new home warranty. A homeowner making a claim must follow the notice deadlines specified in the warranty and afford the builder an opportunity to inspect and correct the defect, as outlined in the warranty.

Most purchasers in New York acquire a home that is “used”, having already been lived in by someone else. The standard contract provision in New York states that all warranties and representations made by the seller expire upon the delivery of the deed, unless they are expressly stated to survive the delivery of the deed. This means that once the deed is delivered at the closing, the purchaser is accepting any conditions that may exist at the property. As such, the purchaser should thoroughly inspect the property immediately before the closing. Any condition that could have been discovered becomes the purchaser’s problem once the closing has concluded. In any event, a purchaser of a used home should receive the benefits of manufacturers’ warranties with respect to appliances.

Most sellers of residential property in New York State are required to provide a completed Property Condition Disclosure Form or to apply a credit of $500.00 against the balance due at closing for failure to deliver the completed form. The Property Condition Disclosure Form contains forty questions pertaining to such matters as environmental, structural and mechanical conditions and property services. Since a seller may be far removed in the chain of title from the original owner, he may be uncomfortable answering a question concerning potential water damage to the structure. Many parties in downstate New York prefer to apply the $500.00 credit to the balance due at closing, while custom in upstate New York dictates that the Property Condition Disclosure Form be completed. Even though a seller may not be liable for information reported on the Property Condition Disclosure Form, most people would prefer to avoid the aggravation of a post-closing claim.

While buyers of used homes in New York generally do not obtain warranties, they should be aware that some real estate brokers offer warranties on homes that they sell. For a few hundred dollars paid at closing, a buyer will obtain a warranty that covers items besides appliances. This warranty program may be beneficial to some purchasers.

Our firm welcomes discussions concerning warranties with our real estate clients.