§ 14.3.1—Habitability of Home

Colorado was one of the first states to adopt the rule of implied warranties of workmanlike construction and habitability.104

In the absence of a proper disclaimer,105 agreements between builder-vendors and purchasers for the sale of newly constructed homes give rise to an implied warranty that local building codes have been complied with, that the home was built in a workmanlike manner, and that the home is suitable for habitation.106 (A builder-vendor is one who either built, or participated in the building of, or supervised the building of, the property.107 ) The imposition of the warranty is based upon public policy considerations necessary to protect inexperienced home buyers from overreaching by more knowledgeable builders, given that the purchase of a residence may be the most significant investment in the purchaser's lifetime.108

These warranties arise where there is a commercial sale of a new home by a builder-vendor. A commercial sale is one where a builder-vendor sells a new home to a member of the general public.109 Therefore, the warranties arise only with the sale of a new home to its first purchaser.110 Nevertheless, a subsequent purchaser may have a claim against a builder based on negligence.111

The purpose of the implied warranty of habitability is to provide a buyer with a remedy for latent defects in the structure or premises which adversely affect its use as a residence and to place liability for defective construction on the builder, not the buyer.112

The contractual responsibilities of the builder of a new house which are implicit in the concept "implied warranty of habitability" include the buyer's right to both a home that is built in a workmanlike manner and one that is suitable for habitation.113 The buyer is not required to prove both that the home was not built in a workmanlike manner and that it was unsuitable for habitation; the buyer is entitled to relief if he or she proves either.114 Nor is the buyer required to prove that the uninhabitability is the result of unworkmanlike construction.115 But uninhabitability resulting from the lack of a certificate of occupancy is not covered by the implied warranty of habitability.116

For construction to be done in a good and workmanlike manner there is no requirement of perfection; the test is reasonableness in terms of what the workman of average skill and intelligence (the conscientious worker) would ordinarily do.117 It is immaterial that a reasonable examination of the premises would make the purchaser aware of the defects.118

When a garage is an integral part of the home as purchased, the warranty of inhabitability extends to the garage.119 Similarly, the grading of the premises on which a house is constructed cannot be divorced from the construction of the house itself when it is undertaken by the party responsible for the construction,120 and a sufficient water supply is a prerequisite to the useful occupancy of a house.121

A limitation of liability on the warranty of workmanlike construction and habitability must be accomplished by clear and unambiguous language.122 Any such limitation is strictly construed against the builder.123

The proper measure of damages is that amount necessarily expended to bring the home to the impliedly-warranted condition.124 Exemplary damages may be awarded where the breach of the warranty is accompanied by willful and wanton conduct and reckless disregard for the rights of the purchaser.125 In a proper case, rescission may be awarded.126

§ 14.3.2—Habitability of Land

In addition to the implied warranty of habitability of a home...

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