Category: Property

The New Home Warranty Act: Protections and Pitfalls

Louisiana’s New Home Warranty Act (“NHWA”) provides remedies to homeowners forcertain construction defects once the new home construction is complete.  La. R.S. 9:3141 et seq.  These protections can prove crucial to a homeowner’s ability to remedy defects that appear in their home, but the statutes providing these remedies establish strict guidelines that must be followed for the protections to apply. This generally post sets forth some of the key protections and obstacles/defenses that often arise. However, each specific claim should be considered under its own facts.

PROTECTIONS

The NHWA provides specific protections to homeowners.  Each protection expires if not advanced within a set time-period.

Noncompliance/Defects– The NHWA protects against “any defect due to noncompliance with the building standards or other defects in materials or workmanship not regulated by building standards.”  La. R.S. 9:3144(A)(1).  This category includes defective construction or materials used in the construction. Even seemingly minor issues such as cracked plaster, yellowing paint, and “rubbing off” of new paint can give rise to a valid claim for recovery under this portion of the NHWA.  See Bynog v. MRL, LLC, 05-122 (La. App. 3 Cir. 6/1/05), 903 So.2d 1197.   Deviations from the “plans and specifications” for a home may also be recoverable.  See Thorn v. Caskey, 32-310 (La. App. 2 Cir. 9/22/99), 745 So.2d 653.

Because this first protection is so broad, it also provides the shortest time-period to assert a claim: one year from the “warranty commencement date,” which is either the date legal title to the home is conveyed to its initial purchaser or the date the home is first occupied, whichever occurs first.  La. R.S. 9:3142(7).

Plumbing/Electrical/HVAC– The NHWA also protects the homeowner from defects in the plumbing, electrical, heating, cooling, and ventilating systems.  These protections exclude equipment or appliances.  A homeowner must bring a claim under this second category within two years of the warranty commencement date.  La. R.S. 9:3144(A)(2). 

Major Structural Problems– the NHWA allows recovery for major structural defects up to five years following the warranty commencement date.  La. R.S. 9:3144(A)(3).  For instance, recovery was allowed for a failing foundation under this provision in Campo v. Sternberger, 15-53 (La. App. 5 Cir. 11/19/15),179 So.3d 908.

PITFALLS

The most obvious – and probably most prevalent – pitfall is the timeliness of the claim. Courts do not hesitate to dismiss a claim if it is not timely filed. 

The NHWA also requires that the homeowner give the builder written notice (via certified mail) of the defect before the homeowner attempts a repair, or before filing suit under the NHWA.  La. R.S. 9:3145(A).  This notice must be sent to the builder within one year after the homeowner has knowledge of the defect.  Therefore, the one-year “clock” may begin to run when the homeowner gains knowledge of the problem even if the NHWA provides a longer time-period to advance the claim.

A failure by the homeowner to give timely notice can also diminish the claim even if it is brought within the deadlines. Under La. R.S. 9:3144(B)(4)(c), any damages caused by the homeowner’s failure to give the builder notice of the defect are not recoverable.  In that circumstance, builders often contend that the severity of the problem could have been lessened had they been made aware.

RECOVERABLE DAMAGES

With some exceptions, damages under the NHWA are limited to the actual damages incurred by the homeowner, including attorney fees and court costs arising out of the builder’s violation.  La. R.S. 9:3149.  The actual damages cannot exceed the reasonable cost of repair or replacement necessary to cure the defect.  If there are multiple defects across the home, damages are limited to the original purchase price of the home. 

Consequential damages such as pain and suffering, mental anguish, or loss of use are generally not recoverable.  See La. R.S. 9:3144(B); Iteld v. Four Corners Const., L.P., 12-1504 (La. App. 4 Cir. 6/5/13), 157 So.3d 702.  However, there may be exceptions to this general rule under certain factual circumstances beyond the scope of this post.

CONCLUSION

The NHWA provides important remedies to homeowners. But, the New Home Warranty Act is complex and balances the competing interests of the homeowners and the builders. For this reason, a failure to follow the notice and timeliness requirements will often defeat the claim. 


John Grinton, is a partner at Keogh Cox whose practice areas include commercial and construction litigation. When he is not practicing law, John spends most of his time with his wife and son, and their two dogs.

When It Comes to Real Estate, Get It In Writing

As the old adage goes, it’s always safest to get an agreement in writing.  In Louisiana, when an agreement is about the sale of real estate, the adage is law.  A contract for sale must be in writing as provided in Louisiana Civil Code articles 1839 and 2440.

This long-standing rule was at issue in the recent case of Holmes v. Paul, 19-130 (La. App. 5 Cir. 10/2/19), 279 So. 3d 1068. In Holmes, the plaintiff/seller and defendants/purchasers entered into a purchase agreement for a Metairie home which required a closing by no later than April 29, 2016.  The contract was a standard form Louisiana purchase agreement which required that any change in the closing deadline be written and signed by both parties.  The parties later entered a written extension of the closing deadline to May 6, 2016. 

Three days before the closing, the home appraised for $14,000 below the purchase price, leading the seller’s agent to encourage the purchasers’ agent to pursue an appraisal review.  However, the parties did not sign a written extension of the May 6, 2016 closing deadline.  Thereafter, the seller agreed to decrease the purchase price to the appraised value, but on the same day the purchasers sent a signed cancellation. The seller sued the purchasers for breach of contract, arguing that the parties verbally agreed to extend the closing deadline and intended to execute a written extension as soon as they determined a feasible closing date. 

The purchasers moved for summary judgment on the ground that the purchase agreement had expired and was unenforceable.  The Court agreed. The purchase agreement expressly required that extensions be made in writing signed by both parties.  Upon the expiration of the May 6, 2016 closing deadline, the contract was unenforceable. 

The seller also asserted a detrimental reliance claim, arguing she was lulled into not insisting on a written extension because the purchasers’ agent agreed to it orally.  However, the seller conceded her awareness that an extension had to be in writing. As such, her reliance was not reasonable. The court further noted the absence of evidence that the purchasers themselves agreed to orally extend the contract or to waive the writing requirement. 

Unfortunately, business deals in the modern world cannot be finalized by a handshake.  Remember that when you buy and sell property in Louisiana — get it in writing.


Marty Golden has been practicing law based in Baton Rouge, Louisiana for over thirty years, concentrating in civil litigation primarily involving injuries, property damage, insurance coverage, and contract disputes. Much of his practice is defending and advising real estate agents in suits by property buyers and sellers, but Marty also defends other professionals, insurance companies, manufacturers, and business owners. Marty has a special interest in all things procedural, because they are the rules of the road for litigators and knowing them better than his opponent gives him a leg up in court.

The Rise of the Drones

Drones play an increasing role in modern life; all indications are that this role will increase, maybe to disturbing levels. The popularity and availability of drones have sky-rocketed in recent years. As with most new technologies, the development of the law to regulate this technology lags behind. To their credit, the DOT and FAA have been pro-active in developing regulations. This article will address some of these regulations and the expected development of future regulations.

Initially, the FAA prohibited the use of drones in the commercial industry. Gradually, the FAA granted exemptions to certain companies for the commercial use of drones. These exemptions permitted these companies to use drones for:

(i)                  the movie and video industry;

(ii)                real estate photography;

(iii)               agricultural monitoring;

(iv)              aerial surveying;

(v)                delivery of medical supplies in rural areas; and,

(vi)              inspecting flare stacks

Applying for exemptions can be costly and the outcome is not guaranteed. However with growing commercial demand, the FAA has gradually loosened its restrictions and granted more exemptions.

The FAA and DOT finalized the first operational rules for routine commercial use of drones which took effect in August 2016. These regulations are available at: http://www.faa.gov/uas/media/Part_107_Summary.pdf. The issuance of these regulations is projected to generate $82 billion for the U.S. economy and create more than 100,000 jobs over the next ten years.

While these regulations are fairly comprehensive, they prohibit the use of drones beyond the line of sight of the operator over unprotected persons on the ground. Further, there are limitations on size and when drones can be flown. Based on these restrictions, plans to use drones for delivery services will likely have to wait. However, the FAA is permitting companies to apply for waivers, available if companies demonstrate that the proposed flight will be conducted safely. Even if a drone flight is permitted, air traffic control authorization is required if the flight is in controlled airspace. Requests for waivers and authorization must be applied for on the FAA’s online portal located at https://www.faa.gov/uas/.

The FAA is trying to balance the benefits of drone use with its mission to protect public safety. The FAA also provides all drone users with recommended privacy guidelines and is set to issue new guidance to local and state governments on drone privacy concerns.

The White House announced that the FAA is currently working on developing regulations to permit the safe and beneficial use of drones over crowds. As part of this development, the FAA launched an Unmanned Aircraft Safety Team and a Drone Advisory Committee.

We expect the FAA to allow a more expansive use of drones in the years to come. Like it or not, the drones are here and are not going away; they are rising.

When “Drone” Used to be a Boring Word

Webster’s top two definitions of the word “drone” are as follows:

1: A stingless male bee (as of the honeybee) that has the role of mating with the queen and does not gather nectar or pollen.

2: one that lives on the labors of others: parasite

While bees and parasites have their allure, Webster’s third definition of the word “drone” is the one with current intrigue.

According to Webster’s, a drone is also “an unmanned aircraft or ship guided by remote control or onboard computers.” Drones began as play things; but are now poised to revolutionize industry, retail, agriculture, journalism, art, and law at an ever-increasing pace.

Currently, drones are regulated by the Federal Aviation Administration which has for decades regulated flight by planes and helicopters; but not everyone can own an airplane or helicopter. Everyone can own a drone and many soon will.

The soon-to-be pervasive use of drones will stretch at the fabric of criminal and civil law and raises intriguing questions with hazy answers.  For example,

1: Without probable case, can the government park a drone over a house or building, or even a crime-ridden city block, and monitor for criminal activity with sensors that easily peer through walls?

2: Does one have a reasonable expectation of privacy within a fenced-in back yard?

3: Is following a personal injury plaintiff via drone considered stalking?

4: Can a business fly a drone over a competitor’s work yard to observe it processes without recourse?

5: Is it legal to use technology (which is now available) to disrupt or even crash drones flying overhead? Would that be a tort?

In an upcoming Keogh Cox blog, we will advise of pending changes to the law that may begin to answer some of these questions. For now, we will observe that the word “drone” is no longer a boring word.

Trees and Neighbors: A Growing Problem

Louisiana is a river delta state filled with fertile land and the refusal of its local fauna to stay within boundaries is a problem.  Trees create hazards. They also bring nuisance in all its forms––pine sap drizzled over a new car, an oak branch casting a sun-blocking shadow over the perfect tanning spot, and on and on. If you own the tree, the problem is easy enough to address; but what if the tree belongs to your neighbor? Can you cut your neighbor’s tree?

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