I was reading a blog on the PI's Seattle Real Estate Professional's Blog regarding new legislation, Senate Bill 5550, that would improve upon the implied one year new construction warranty provided by Washington's builders. In the article titled Justice IS Available for SOME New Construction Homebuyers, Jillayne Schlicke highlights some of the major Washington builders warranty programs and none of them are too exciting.
But the theme that shows up for me is the lack of accountability that builders have to the current owners. Marlow Harris makes this comment "They have no liability nor, it appears, any personal responsibility for their product. Half the time, it's like pulling teeth just to find out who the true owner is. On the paperwork, it's "Whitman Street LLC" or "Kirkland Glenn LLC" or some such entity."
Builders are creating LLCs for each plat with the hopes of limiting their risk, which can't be blamed since smart business is to limit risk while increasing profitably but a balance must be met. A builder we work does the same thing but I don't know their reasoning; I just thought they were doing it to make the paperwork easier and not trying to reduce risk.
After reading Jillayne's blog and Senate Bill 5550 I thought I would poise this new change to our Broker, Mickie Barnett. Mickie thought this was an excellent measure to be put forth and that it is long over due. This is what Senate Bill 5550 hopes to create and its main focus is on extending the coverage and here is the synopsis:
- For two years, beginning on the warranty date, the new home is free from any defects in materials and workmanship;
- For three years, beginning on the warranty date, the new home is free from any defects in the electrical, plumbing, heating, cooling, and ventilating systems, except that in the case of appliances, fixtures, and items of equipment, the warranty need not exceed the length and scope of the warranty offered by the manufacturer, and the warranty of merchantability, fitness, and all other implied warranties with respect to appliances, fixtures, and items of equipment shall be governed by the Washington uniform commercial code;
- For five years, beginning on the warranty date, the new home is free from any defects that permit or, without repair, will lead to water penetration; and
- For ten years, beginning on the warranty date, the new home is free from any structural defects.
Senate Bill 5550 isn't perfect though. Mickie and I both agreed that the Five Year warranty would be difficult to enforce for this reason: what "if" a new development goes in behind the current development creating more run off water and collects under the houses? Who's liable now? The builder that did the homes with water underneath or the builder that created the run off? It looks like this is a big grey area.
Though this topic hasn't come up with our builder it would be interesting to have his take on current warranties and the effects the new legislation may have on the building industry. Do other states have similar Senate Bills that extend the home builder warranty beyond one year?
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