Steps to take before and after accepting the keys
Before taking possession of a new home, check that upgrades or specially selected components such as cabinetry, hardware and flooring have been installed.
Do a thorough final inspection: Fill sinks with water and look for leaks. Flush toilets. Test electrical outlets. Run heating and cooling systems, and check that doors are wide enough to accommodate home furnishings and major appliances.
Minor cracks in concrete and drywall and wall blemishes are fairly normal in a newly built home, said H. Alan Mooney of Criterium Engineers. However, because 90% of defect claims involve water leaks, buyers should scrutinize windows and doors -- especially any that don’t open and close properly -- and look for stains near windows or on the walls. Experts cite aluminum windows and French doors as commonly defective products.
If a problem surfaces, document and date anything questionable with a video or digital camera, call the builder, send a certified letter requesting corrective action and be persistent.
Nine of 10 California homes are sold with a one-year warranty that covers major systems (heating, electrical and plumbing), reports the Home Warranty Assn. of California. But buyers with warranties should familiarize themselves with what’s covered. Some problems take time to surface, so inspect the home about one month before the policy expires.
Manufacturers offer additional warranties from two to 10 years. But because most coverage doesn’t extend to secondary problems -- water damage caused by a roof leak, for instance -- major construction flaws can result in premium hikes and canceled insurance coverage for homeowners, said attorney Thomas E. Miller, co-author of “Home and Condo Defects: A Consumer Guide to Faulty Construction.”
State laws offer further warranty protection in 21 states. For homes sold after Jan. 1, 2003, California’s “fix it” law stipulates a 10-year statute of limitations for construction defect claims against a builder, with shorter periods for paint and finish (one year from close of escrow).
The law provides a 14-day window for the builder to respond to the owner’s documented complaint and establishes guidelines for inspections and repairs. If a builder fails to meet a deadline or fix the defect, the owner can sue.
Contracts that require buyers to agree to binding arbitration -- a mediation process that offers no right of appeal in the event of dispute -- have become standard during many sales.
Miller recommends buyers check with a lawyer before they negotiate with a developer, sign away rights or release the builder from further liability for specific flaws or future defects.
“The unsuspecting homeowner may not appreciate how sweeping these releases are,” he said. “And if homeowners are going to pursue the builder five years down the line, when some of the bigger issues come up, they may be out of luck.”
