The New Home Warranty Act, a relatively new act in Louisiana (1986) provides for special protections for home builders. Before the passage of the Act, contractors were held to standards of good workmanship that were generally expressed in the Civil Code. The Act states it was intended to help encourage the enactment of building codes and the availability of defect insurance. It has done neither. Building codes were already required by most local governments or building codes already in existence apply. Defect insurance is not widely available. The inescapable conclusion is that its real value is to home builders as a protection against being liable for defects arising more than 7 years after the sale, even though homes are most commonly financed for 30 years. Further, the Louisiana legislature has repeatedly amended the Act to make it less and less consumer friendly, reducing the former 10 year period for major structural defects first, to seven years, then to five years, writing out mold claims, and making the statute of limitations absolute. Despite these limitations, it can provide certain benefits to consumers. Fred Pharis has prosecuted many cases under the Act.
The Act only applies to new homes, although the applicable time periods transfer to successive owners. The Act provides for a now 5 year warranty for defective foundations and structural components, only two years for plumbing, electrical, and other system defects, and only one year for cosmetic items. This runs from the date of occupation by the original owners, not from the date of sale to subsequent owners, so the builder gets away from any further responsibility no matter if a structural component that normally should last thirty years fails in as little as 5 years and one day. The Act also requires a certified mail notice to the builder of the defects and the owner must then allow the builder to try to make repairs. If the builder fails, the owner may then sue for the cost of repair, plus attorney's fees.
Effective in 1999, the Louisiana Legislature has provided that the owner need not prove a violation of building codes, but that the problems are due to defects in materials and workmanship. However, the statute of limitations and other changes keep it unfriendly and the worst kind of special interest legislation.
The Act does provide for an attorney's fee award if the builder fails to make good on the repairs. It is very important to see an attorney when giving the legal notification. When the warranty period expires for any of the classes of defects (for example, cosmetic items is for one year only), you only have thirty days from the expiration of that time period to file suit.
This means you have less rights than an automobile owner has for an structure priced thousands of dollars more and supposedly designed to last decades longer. This was indeed a special interest bill when passed and consumers must tread carefully in this area. Call an attorney if you have a new home and your contractor will not respond.