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.