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Texas DTPA and Home Warranties

 Home Owner Warranties are promises by the home builder to make certain repairs under certain conditions.  Unlike car warranties that generally cover anything that goes wrong with a car as long as time limits and mileage limits have not been met, new home warranties are extremely limited and are measured against a pre-defined standard.  In other words, new home warranties usually will not cover small items and especially not cosmetic items.  Whereas a new car warranty will usually cover whatever the problem is so long is not wear and tear or maintenance.  

This is important, because with a new home bought in Texas, the home builder will not usually repair anything that is wrong and will cite the limitations in the home owner warranty that will defeat or limit any claim made by the homeowner.  This is less true with small, local home builders but it is generally true with bigger builders and especially national brand builders.  There are also "illusory" warranties offered by smaller builders  and that will be taken up in a future blog. 

So assuming the house has a real warranty, the home builder will then compare the construction defect against the standard threshold.  If the defect is greater than the threshold, the builder will repair.  If the defect is judged to be less than the threshold, the builder will not repair under the warranty.  

It is actually very straightforward.  If your foundation has a slope that you can see and feel without any measurement, but that slope does not exceed the threshold level defined in the warranty, they builder will not consider the visually discernable slope to be a defect and will not repair it. 

Most homeowners will be very upset at this development, but they will believe that there are no other remedies and they will move on accepting a clear problem and simply not knowing that there are numerous other ways to make a builder responsible.  

The most important way is through the Texas Deceptive Trade Practices Act aka the DTPA.  The DTPA is made for consumers and is available for any home owner no matter how much the residence cost.  There is no limit on the amount of the purchase or lease if it is for the consumer's residence.  Note that this does not require that the residence be specifically a homestead either.  

So, if a consumer brings a claim against a homebuilder under the Texas DTPA, the home builder warranties do not have to apply.  Even if the above described foundation issue is not enough to trigger warranty coverage, DTPA claims are still available.  Under Section 17.46(b)(5) and (7), the homebuilder has a duty to deliver a home that has characteristics and qualities like the ones represented to the consumer before the purchase.  If later, the floor has a visible, discernable slope to it, then the builder has violated 17.46(b)(5) and (7) by representing that the home has characteristics and qualities it did not have, namely that the floor would not slope and be detectable.  

Inevitably, the home builder will try and use the warranty as a defense to even a DTPA claim, but this defense is worthless so long as the claims are strictly couched in the DTPA.  If the legal claim is made in warranty or in contract, then the defense is effective.  In the DTPA it is not. 

If you have DTPA questions, call or contact me at: 

Nathan Overstreet
Attorney At Law

TEL: (281) 855-1000

Fax: (281) 855-4580

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