Washington Case Law Update: No Damages Recoverable under New Home Sale Agreement for Improperly Installed…

Washington Case Law Update: No Damages Recoverable under New Home Sale Agreement for Improperly Installed Stone Façade where Hidden Defects do not Present Significant Safety Risk

From the Desk of Smith Freed Eberhard: In this recent Washington Court of Appeals decision, the court held that a real estate sale agreement did not contain any express warranty against construction defects and that the construction defects at issue were not serious enough to violate the implied warranty of habitability.  The takeaway is to concentrate on the precise terms of the sale transaction involved, especially since most real estate sale agreements do not include express warranties against construction defects.

Claims Pointer: When handling construction defect claims which are more aesthetic and technical in nature, and which do not present a significant safety risk to the occupants, the builder’s liability exposure depends on which exact promises were breached.  Liability is not assumed just because the builder did a bad job.

Schumacher v. T. Garrett Construction, Inc., No. 76022-0-I, Washington Court of Appeal, Div. I (May 22, 2017) (unpublished)

T. Garrett Construction (“TGC”) began construction of a new spec house, which the Schumachers bought before the house was fully completed. The parties entered into a real estate purchase and sale agreement with an inspection addendum. The court’s opinion doesn’t mention the specific form of agreement used, but the sale terms described in the opinion are fairly standard.   For example, the sale was conditioned on the Schumachers’ satisfaction after inspecting the property.

After closing on the sale of the house, the Schumachers discovered a number of problems, including issues with the exterior stone veneer siding of the garage. TGC had improperly installed the stone siding. The opinion describes that the “defects were aesthetic in nature and did not present a significant safety risk to the Schumachers” and...

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