Pennsylvania Supreme Court Deals Blow to Homeowners

In Conway v. Cutler Group, the Pennsylvania Supreme Court held that a home builder’s implied warranty of habitability does not apply to a subsequent purchaser of the home. Essentially, this means that the subsequent purchaser of a home cannot sue the original builder of the home for any latent defects which the original builder was responsible for.

In Conway, the plaintiffs purchased a stucco home in 2008 that had been built in 2003. Another family had lived in the home for the first five years. They later discovered water infiltration due to construction defects and filed a lawsuit against the original builder of the home. The trial court found that there was a lack of privity of contract between the parties, and thus the implied warranty did not apply. On appeal, the Superior Court reversed, holding that the implied warranty of habitability is based on public policy considerations, and the same consideration that compelled application of the warranty to the initial purchaser also compelled application of the warranty to subsequent purchasers.

The Pennsylvania Supreme Court reviewed the arguments of both sides and then found that it is not the role of courts to determine whether the implied warranty of habitability should extend to subsequent purchasers. Instead, they suggested that it would be up to the Pennsylvania General Assembly to take up the issue of whether the implied warranty of habitability should extend to subsequent purchasers. It should be noted that the Court cited Elderkin v. Gaskin with approval despite the fact that the creation of the implied warranty of habitability in that case was more legislative in nature than extending an existing judicially created doctrine to subsequent purchasers would have been. Ultimately, the bottom line is that the Court refused, in the absence of guidance by the General Assembly, to extend the implied warranty to subsequent purchasers of defective homes.