Know Your Legal Rights When Buying a New Home from a Developer

By January 6, 2021 Real Estate
Know Your Legal Rights When Buying a New Home from a Developer

When you buy a new home from a developer, Arizona law mandates that it must be habitable and fit for its intended purpose. In legal terms, this is known as an “implied warranty of good workmanship.”

In addition to guaranteeing that everything in your new home is in good working order, implied warranties also apply to any construction surrounding the home. For example, if you purchase a new home in a multi-unit complex, the surrounding structures must meet the same standards as your new home.

When you purchase a new home from a developer, you should receive a builder’s warranty that details your specific rights, such as requirements that the builder fix any defects during a certain time period after you buy the home. These express, written warranties should be part of your purchase contract and you should consult with a real estate attorney to be sure they are included.

The warranties should also make it clear that you have entered into a legal relationship with the developer since this will allow you to enforce the warranties. The warranty should ideally detail the quality of the materials you expect to be used in your home and that the home is free of defects and hazards that could compromise the value of the property.

If you do find some defects after moving in, there are specific procedures you have to follow — along with a time limit– to either solve the problems or protect your right to pursue a legal claim. Under Arizona law, you need to provide the developer with written notice of the defects at least 60 days before filing a lawsuit. The developer must have the chance to resolve the defects within a reasonable period of time — usually 30 days — before you are able to file suit. Nevertheless, the timing to make repairs could change based on whether permits are needed. If so, repairs have to be accomplished “within a commercially reasonable time frame.”

Arizona law also has a statute of limitations for filing a lawsuit against a developer. For new home defects, a buyer has eight years from the date of the home’s completion to pursue legal action against the building contractor. If a defect is discovered during the eighth year, the buyer has another year in which to file suit.

Our real estate attorneys represent parties on either side of real estate and financing transactions, including buyers, sellers, landlords, tenants, lenders, borrowers, trustees, guarantors, shareholders, partners, and others. We advise, structure, negotiate, and document a variety of real estate and financing transactions, including leases, purchase and sale agreements, financing agreements, and development agreements for a variety of commercial and residential projects. Contact us today and learn how we can help.