Breach of Warranty of Habitability in Rhode Island

Background

“The applicability of the implied warranty is based upon the premise that, with respect to the sale of new homes, the purchaser has little choice but to rely upon the integrity and professional competence of the builder-vendor.” (See Sousa v. Albino (1978) 120 R.I. 461, 463-64.)

“The public interest dictates that if the construction of a new house is defective, its repair cost should be borne by the responsible builder-vendor who created the defect and is in a better economic position to bear the loss, rather than by the ordinary purchaser who justifiably relied upon the builder's skill.” (See id.)

“The essence of implied warranty is to protect innocent buyers. As such, this principle, which protects first purchasers is equally applicable to subsequent purchasers." (See Nichols v. Beaufort Associates, Inc. (1999) 727 A.2d 174, 179.)

“Importantly, we determined that there was no reason for an original owner to have the benefit of an implied warranty of habitability while the next owner should not [have that benefit] simply because there ha[d] been a transfer.” (See Mondoux v. Vanghel (2021) 243 A.3d 1039, 1044.)

“Thus, we limit the extension of implied-warranty liability to home buyers who are not in privity with the builder to latent defects existing at the time of the home's original sale that were not known to or were not reasonably discoverable by the buyer when he or she purchased the house, and which become manifest after the subsequent owner's purchase and which were not discoverable had a reasonable inspection of the structure been made prior to the purchase." (See Nichols v. Beaufort Associates, Inc. (1999) 727 A.2d 174, 181.)

General Information for Complaints and Motions

“To avoid exposing builders, architects, engineers, and other home contractors to the specter of a virtually unlimited period of potential liability, we restrict the coverage of the implied warranties of habitability and of workmanlike quality to those latent defects that subsequent owners discover within a reasonable period of time after these home contractors have substantially completed their work on the improvement at issue.” (See id.)

“We deem a period of ten years after substantial completion of the improvement in question to be a reasonable period of time within which subsequent owners should be able to discover any latent defects in the home for their implied-warranty claims to be actionable.” (See id.)

“The subsequent-owner plaintiffs have the burden to show that the builder's faulty workmanship caused any latent defects. Such claims also shall be subject to whatever other defenses the builder may have, including, for example, that the defects were not attributable to him, that they are the result of age or ordinary wear and tear, or that previous owners have made substantial changes." (See id.)

As such, “we hold that any homeowner has a period of ten years following substantial completion of improvement to real property to discover a latent defect. A claim for breach of implied warranty will be considered timely if the homeowner files suit within three years of the date when they discover any latent defects or within three years of the date when, in the exercise of due diligence, they should have discovered such defects." (See Mondoux v. Vanghel (2021) 243 A.3d 1039, 1044-45.)

Standard of Review and Burdens of Proof

We review "a hearing justice's grant of a motion for summary judgment de novo." (See id.)

“In deciding whether summary judgment was appropriate, we apply the same standard as the hearing justice and, therefore, we must determine whether no genuine issue of material fact exists and [if] the moving party is entitled to judgment as a matter of law.” (See id.)

“When making this determination [w]e view the evidence in the light most favorable to the nonmoving party.” (See id.)

"[O]nce the moving party establishes the absence of a material factual issue, the party opposing the motion has an affirmative duty to establish either by affidavit or by other means the material issue of fact to be decided." (See id.)

The Court’s Decisions

It is well settled that “our extension of the implied warranty of workmanlike quality is not unlimited; it does not force the builder to act as an insurer, in all respects, to a subsequent purchaser.” (See Nichols v. Beaufort Associates, Inc. (1999) 727 A.2d 174, 181.)

In Padula v. J. J. Deb-Cin Homes, Inc.,111 R.I. 29, 298 A.2d 529 (1973), the court "adopt[ed] the doctrine that where a builder-vendor sells a house, either new or under construction, he implicitly warrants that the construction has been or will be done in a workmanlike manner and that the dwelling will be reasonably fit for human habitation. In order for the warranty to issue, however, it is necessary that the seller of the house be a builder-vendor, for there is no basis . . . to extend the warranty to cover the sale of a used home by a nonbuilder-vendor." (See McAllister v. Cook, 90-6469 (1996), C.A. No 90-6469, at *1 (R.I. Super. Apr. 26, 1996).)