New Jersey provides new home owners with a warranty under New Jersey’s New Home Warranty and Builders’ Registration Act (“HOW”). The Act provides that newly constructed homes must conform to certain construction and quality standards and provide buyer of the new home with insurance-backed warranty protection in the event any of the standards are not met. Simply put, the Act provides that every new home sold in New Jersey comes with a warranty.
Builders of new homes must register with the New Jersey Department of Consumer Affairs to be permitted to engage in the business of building new homes. Builders are then required to provide a three-tiered warranty program which provides coverage and protection against defects.
Warranty coverage extends to defects caused by faulty workmanship and defective materials during the first year of ownership. The one year begins to run on either the first day of occupation or the settlement date, whichever is sooner. Additionally, during the first two years new home owners have a warranty that covers defects caused by faulty installation of heating, electrical, plumbing, and cooling systems. The Act, however, does not extend the coverage to appliances beyond the warranty provided by the manufacturer. Finally, the Act provides for warranty coverage to major construction defects of the home for ten years.
At first glance the Act appears to provide homeowners a cost-savings means of resolving disputes concerning construction defects. However, in reality the Act makes it difficult for homeowners to resolve construction defects. For example, “major construction” defects have been interpreted by the courts very stringently. Generally, the act affords no protection unless the new home is practically collapsing. Additionally, common problems such as leaks, mold, and excessive settling are not covered.
Moreover, warranties contain many exclusions that can make coverage unattainable. For example, homeowners seeking warranty coverage must provide proper notice of a defect or their claim can be forever barred. Homeowner must also take timely action to minimize loss or damage to their new home. Failure to do so can compromise a claim. Homeowners who do not properly maintain their homes may be barred from bringing a claim. Coverage is not afforded when the defect is caused by the new home owner or a subsequent contractor. Homeowners that change or alter their new homes may be barred from seeking a claim under the Act.
This does not mean that relief is not available through litigation in court or arbitration. It is, and our litigators have had significant success pursuing relief for New Jersey homeowners in successful law suits. It just means sometimes warranty coverage is not available.
It is important to speak with an experienced New Jersey construction or real estate attorney if you have issues with your new home. The exclusions and qualifications necessary to make claims under New Jersey Homeowners Warranty are complicated and difficult. Failure to properly make claims can bar new homeowners from later making a duplicative claim.
If you are a new home owner and you have problems with your home our New Jersey attorneys can help. We have significant experience representing individuals in presenting claims under HOW. To learn more about what we can do to help, e-mail us or call one of our lawyers at (973)890-0004. We are conveniently located in Totowa, New Jersey, in Passaic County near Routes 80, 46, 3 and 23 and the Garden State Parkway.