Transfer of Louisiana New Home Warranty Between Seller and Buyer

Question:

Do the warranties outlined in the Louisiana New Home Warranty Act cease to exist once the initial owner of the new home sells the home?

Answer/Recommendation:

Not necessarily. Louisiana law actually provides for transfer of the New Home Warranties to subsequent owners of a

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home under certain time constraints.

According to La. R.S. 9:3144(A), every builder warrants to the “owner” of a home certain items of the home for one (1), two (2) or five (5) year warranty periods. (The items to be warranted are addressed in a separate risk management newsletter).

This begs the question: who is defined as an “owner”?

According to La. R.S. 9:3143(6) an “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 this Chapter are in effect.

Additionally, according to La. R.S. 9:3148, any warranty imposed under the Louisiana New Home Warranty Act shall automatically transfer without charge to a subsequent owner who acquires title to the home.

So, if the home is sold within the one (1), two (2) or five (5) year warranty periods, then the New Home Warranty Act is still in effect for the new purchaser of the home.

But how do we know when the one (1), two (2) or five (5) year warranty periods began?

According to La. R.S. 9:3143(7), the “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

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first.

As an agent, if you are asked a question about whether the New Home Warranties are still in effect, the following is recommended:

  1. Determine when the home was sold or first occupied;
  2. Provide your buyers with a copy of the Louisiana New Home Warranty Act;
  3. If the New Home Warranties appear to still be in effect, briefly explain the New Home Warranty periods to your clients and how the New Home Warranty periods might still be in effect, but request your clients seek immediate legal advice to be certain whether the New Home Warranties are still in effect.

For copies of the Louisiana New Home Warranty Act or for any questions concerning this email, please contact me at rye@tutentitle.com.