When purchasing or selling a “new” home in Virginia, it’s crucial to understand the legal protections and obligations that come into play. One such critical aspect is the implied warranty provided under Section 55.1-357 of the Virginia Code. This warranty ensures that new dwellings meet certain standards of quality and workmanship, safeguarding the interests of buyers and outlining responsibilities for builders and sellers.

In this blog, we’ll delve into what Virginia’s implied warranty entails, how it affects builders, sellers, and buyers, and the essential steps each party should take to protect their rights and interests.

What is Virginia’s Implied Warranty for New Dwellings?

Section 55.1-357 of the Virginia Code establishes that every contract for the sale of a new dwelling in Virginia includes an implied warranty. This means that, by law, certain assurances about the quality and condition of the constructed property are guaranteed, even if they’re not explicitly stated in the contract.

A “new dwelling” refers to a property not previously occupied for more than 60 days by anyone other than the buyer or seller, or properties not occupied by the original vendor or subsequent vendor for a cumulative period exceeding 12 months. This definition is critical because it determines whether the implied warranty is included in a particular contract.

Coverage of the Implied Warranty

Under the implied warranty, the home must be free from structural defects, ensuring it can pass without objection in the trade. Additionally, the construction must be carried out in a workmanlike manner, adhering to industry standards and practices. These assurances mean that buyers can expect their new home to be built soundly, without significant defects that could affect its safety or livability.

Can the Implied Warranty Be Waived or Excluded?

While the implied warranty is a default provision, sellers and builders may attempt to waive or exclude it. However, doing so requires strict compliance with specific legal requirements outlined in Section 55.1-357(D) of the Virginia Code.

To effectively waive, modify, or exclude the implied warranty, the contract must clearly state that the property is being sold “as is.” The exclusion must also be prominently displayed on the face of the contract, using capital letters at least two points larger than the rest of the text. It must specifically state the warranty or warranties being waived, modified, or excluded. Failure to meet these precise requirements can render the waiver ineffective.

The Courts’ Stance on Waiving the Implied Warranty

Virginia courts are vigilant in protecting consumers from inadvertent waivers of their rights. They require strict adherence to the statutory requirements for waiving the implied warranty. Some Courts have rejected sellers’ attempts to waive the implied warranty for failure to comply with the relevant Code section. For example, one Virginia Court found the waiver ineffective because the exclusionary language in the Contract was not the proper font size. Another Court denied a builder’s effort to invoke the waiver when the language referencing the code section contained a benign typographical error. See Speier v. Renaissance at Victoria Farms, 58 Va. Cir. 90 (Fairfax 2001); Weiss v. Cassidy Development Corp., 61 Va. Cir. 237 (Fairfax 2003) These cases illustrate that even minor deviations from statutory requirements can invalidate a waiver, leaving builders and sellers exposed to potential warranty claims.

Duration and Transfer of the Implied Warranty

The implied warranty extends for a period of one year from the earlier date of transfer of title to the buyer or the date when the buyer takes possession of the dwelling. If a buyer believes there’s a breach under the warranty, they must send a written notice stating the nature of the warranty claim. The notice must be sent by certified mail, commercial overnight delivery service, or the United States Postal Service with a receipt obtained. The seller or builder then has a reasonable time, not exceeding six months, to address and correct the defects.

Implications for Builders and Sellers

If you are a builder or seller wishing to exclude the implied warranty, it’s essential to adhere strictly to legal requirements. Ensure the contract language meets all statutory formatting and content specifications, and pay close attention to details like typos, font sizes, and clarity of language. Non-compliance can lead to ineffective waivers, resulting in legal liability and potential litigation. However, even if the warranty applies, you have the opportunity to address and fix any issues before legal action escalates. Promptly resolving defects can enhance your reputation and reduce the likelihood of disputes.

Implications for Buyers

Buyers should recognize that purchasing a new dwelling generally includes an implied warranty for structural integrity and workmanship. It’s important to review contracts carefully and be vigilant for any clauses that attempt to waive or exclude the warranty. If you discover any defects, report them to the seller or builder promptly and follow the proper procedures to preserve your rights. Failure to notify the seller properly or within the warranty period can result in losing rights under the warranty, and delays can lead to worsening conditions, potentially increasing repair costs and complications.

Recommendations for Both Parties

Builders and sellers should work with attorneys to draft contracts that comply with Virginia’s statutory requirements and stay informed about legal developments and court rulings that may affect warranty waivers. For buyers, obtaining professional inspections and seeking legal advice if uncertain about contract terms or warranty provisions can help protect your interests.

Conclusion

Understanding Virginia’s implied warranty for new dwellings is essential for builders, sellers, and buyers alike. This warranty serves as a protective measure, ensuring that new homes meet acceptable standards of construction and are free from significant defects. Builders and sellers must exercise diligence in contract preparation if they intend to waive the warranty, adhering strictly to statutory requirements to avoid legal pitfalls. Buyers should be aware of their rights under the implied warranty and take prompt action if defects arise. By navigating these legal provisions carefully, all parties can engage in real estate transactions with greater confidence and security.

If you have questions about implied warranties or need assistance with real estate transactions in Virginia, please contact Stephen Caruso at (703) 284-7242 or scaruso@beankinney.com.

This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the authors and are not necessarily the views of any client.