Louisiana Homebuyers Summary of the Louisiana New Home Warranty Act
In the late 1980’s the Louisiana legislature, in order to promote commerce and to protect Louisiana homebuyers, enacted the Louisiana New Home Warranty Act. The Act serves as a simple, mostly exclusive remedy for homeowners to recover damages from their contractors’ defective work.
What Remedies Available under the Louisiana New Home Warranty Act?
The Louisiana New Home Warranty Act (LNHWA) provides the exclusive warranties, remedies, and peremptive periods as between builder and owner relative to home construction and no other provisions of law relative to warranties and redhibitory vices and defects shall apply. The beauty of this simple provision is that it makes it much simpler for homebuyers to understand their rights under the LNHWA so long as the house was actually completed.
However, courts have found that when there is a written contract between an owner and contractor, and the contractor fails to complete his obligations under the contract, he can also be sued for breach of contract as well as for claims under the LNHWA.
Additionally, the LNHWA provides that an affected owner shall have a cause of action against the builder for actual damages, including attorney fees and costs, arising out of the violation. How, the amount of damages are limited to the original purchase price of the home.
Definitions Under The Louisiana New Home Warranty Act
It is important to realize that the warranty afforded to an owner is provided by the contractor or “builder” and not the seller of the home. The LNHWA lays out the following definitions in La. R.S. 9:3143:
- Builder- means any person, corporation, partnership, limited liability company, joint venture, or other entity which constructs a home, or addition thereto, including a home occupied initially by its builder as his residence. A person, corporation, partnership, limited liability company, joint venture, or other entity which constructs a home, or any addition thereto, is a “builder”, whether or not the consumer purchased the underlying real estate with the home.
- “Home” means any new structure designed and used only for residential use, together with all attached and unattached structures, constructed by the builder whether or not the land was purchased from the builder. Such term includes structures containing multiple family dwellings or residences.
- “Major structural defect” means any actual physical damage to the following designated load-bearing portions of a home caused by failure of the load-bearing portions which affects their load-bearing functions to the extent the home becomes unsafe, unsanitary, or is otherwise unlivable:
(a) Foundation systems and footings
(f) Walls and partitions
(g) Floor systems
(h) Roof framing systems.
- “Owner” means the initial purchaser of a home and any of his successors in title, heirs, invitees, or assigns to a home during the time the warranties provided under the LNHWA.
- “Warranty commencement date” means the date that legal title to a home is conveyed to its initial purchaser or the date the home is first occupied, whichever occurs first.
What are the Warranties Under The LNWHA?
Under the LNHWA, every builder warrants to the owner the following:
- for one (1) year after the warranty commencement date, the home will be free from any defect due to noncompliance with building standards or due to other defects in material or workmanship;
- for two (2) years after the warranty commencement date, the plumbing, electrical, heating, cooling, and ventilating systems exclusive of any appliance, fixture, and equipment will be free from any defect due to noncompliance with the building standards or due to other defects in material or workmanship; and,
- for five (5) years after the warranty commencement date, the home will be free from major structural defects due to noncompliance with the building standards or due to other defects in materials or workmanship not regulated by building standards.
What are Exclusions are Not Covered By The LNHWA?
The LNHWA specifically excludes the following, absent a builder’s warranty stating coverage: fences and landscaping; concrete floor of basement or garage after the first year; damage caused or made worse by negligence of anyone other than builder or his representative, failure of owner to give notice of defect to builder; any change made by anyone after initial occupancy; dampness or condensation; defects caused by materials supplied by anyone other than builder or his representatives; normal wear and tear; insect damage; bodily injury; any cost of shelter, transportation, food, moving, storage, or other incidental expense related to relocation during repair; any defect not reported in writing to builder; consequential damages; and mold. A full list of excluded damages can be found at La. R.S. 9:3144.
What is the Required Written Notice Under The LNHWA?
After the discovery of a defect, but before undertaking any repair or instituting an action for breach of warranty, the owner must give a builder written notice, by registered or certified mail, within one year after first knowledge of the defect, giving the builder a reasonable opportunity to comply with his obligations. Builders are also required to give the owner written notice of the LNHWA at the time of closing or at the time of execution of a construction contract with the owner.
While the Louisiana New Home Warranty Act can provide great protections for homeowners, it is unforgiving if all of its technical provisions are not followed to the letter. Therefore, if you believe that you may have a claim under the Louisiana New Home Warranty Act, it is best to consult an attorney as early on as possible.