Builder Responsibility for Subcontractors

Question:

My buyer client requested that her builder fix some problems recently discovered in the home that my client feels are covered by the Louisiana New Home Warranty Act.  The builder said the problems were caused by a sub-contractor that was hired by one of the builder’s sub-contractors and the builder is not responsible for the work of this “3rd party sub-contractor.”  Is this correct?

Answer/Recommendation:

Maybe, but maybe not.

It is correct that builders are not responsible for work performed by someone that is not considered the builder’s employee, agent, or subcontractor.

As stated in La. R.S. 9:3144(B)(6), unless the parties agree otherwise, the following is excluded from the Louisiana New Home Warranty Act:

“Any defect in, or any defect caused by, materials or work supplied by anyone other than the builder, or any employee, agent, or subcontractor of the builder.”

The question becomes whether this 3rd party sub-contractor is considered the employee, agent, or subcontractor of the builder.  The answer to this question may require legal analysis.

There is at least one case out there that dealt with a similar situation and found the builder responsible for the work performed by a sub-contractor of a sub-contractor.

In Bynog v. M.R.L., LLC, 05-122; La. App. 3 Cir. (6/1/05); 903 So. 2d 1197, plaintiff home owners sued their builder, MRL, LLC, alleging the caulking and painting on the outside of their house was improperly done and insects were getting into the house.

MRL, LLC, contracted with sub-contractor “A” to build the home.  Sub-contractor “A” then contracted with Sub-contractor “B” to handle the caulking and painting for the home.  In their lawsuit response, MRL, LLC, alleged Sub-contractor “B” was and unrelated 3rd party for whom MRL, LLC, was not responsible.

The Court disagreed.   According to the Louisiana 3rd Circuit Court of Appeals, Sub-contractor “B” was an employee of Sub-contractor “A” and thus falls under the phrase “any employee, agent, or subcontractor of builder,” used in La. R.S. 9:3144(B)(6).

So, your buyer client’s builder may or may not be responsible for the work performed by the 3rd party sub-contractor.  I recommend your client seek legal advice immediately.

For any questions concerning this email, please contact me at rye@tutentitle.com.

 

H.L. “Rye” Tuten, III, is a Title Attorney/Real Estate Closing Attorney and Owner of Tuten Title & Escrow, LLC. Formerly assigned by RICE Insurance to defend real estate agents throughout Acadiana, much of his more than nine years’ litigation experience is with real estate concerns.

The information contained herein is simply for informational purposes only and not intended to provide legal advice or create an attorney-client relationship.