When do the Time Periods Outlined in the Louisiana New Home Warranty Act Begin to Run?

Question

I represent the Buyer of a home that was completed approximately two (2) years ago.  The Seller of the home is the Builder who built the house for himself and his wife.  The Builder and his wife have lived in the home for the past two years.

Does my Buyer still get the benefit of the Louisiana New Home Warranty Act?

Answer

Essentially, you are asking when did the one (1) year, two (2) year and five (5) year time periods outlined in the Louisiana New Home Warranty Act begin to run.

Do the time periods begin to run when the Builder completed the home?

Or

Do the time periods begin to run when the Builder sells the home to your Buyer?

Or

Is there some other date that the time periods begin to run?

The Louisiana New Home Warranty Act is found at La. R.S. 9:3141, et. seq.

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

Additionally, La. R.S. 9:3143(4) indicates that an “Initial purchaser” means any person for whom a home is built or the first person to whom a home is sold upon completion of construction.

Thus, according to the Act, a “Builder” would be considered the initial purchaser of the home because they built the home for themselves.

Reading the above two sections of the Act together, the one (1), two (2) and five (5) year periods began to run the date the builder first occupied the home.

A strict reading of the statute would put the warranty commencement date as the date the Builder moved into the home.

However, there could be a more liberal interpretation of the statute that would put the warranty commencement date as the date the certificate of occupancy was issued (which should be prior to the Builder moving into the home).

Accordingly, it might be wise to get the following info from the Seller/Builder:

  1. A copy of the Certificate of Occupancy indicating the date the Builder moved into the home; and
  2. A written document from the Builder indicating the date the Builder moved into the home.

 

Once you obtain the above information from the Builder, it might be wise to assume that the warranty commencement date began on the earlier of the Builder moving into the home and the issuance of the certificate of occupancy.

From that date, you calculate the time remaining in the Louisiana New Home Warranty Act.

So, for your example:  since the Builder has been living in the home for two (2) years, the one (1) and two (2) year warranty periods would not be effective, but your Buyer would still get the benefit of the remaining three (3) years on the five (5) year warranty period.