FAQ - RIGHT TO HAVE NEW HOME INDEPENDENTLY INSPECTED (FOR ARIZONA) - NEW CONSTRUCTION DEFECT CLAIMS
QUESTION: Can a Builder,
after entering into a sale contract by which he agrees to build and deliver a
specific home to a Buyer (for which the Buyer is bound by the contract to pay)
bar a registered Home Inspector engaged by the Buyer to inspect the property
from coming upon the property unless the Home Inspector provides financial
assurances to the Builder in excess in amount of coverage of that required of
the Inspector by state law under the BOTR or can the Homebuilder bar the Home
Inspector by the use of the threat to void warranties otherwise protecting the
Buyer or a threat to suspend performance upon or terminate the construction
contract or any warranty on it, implied by law or express, owed to the Buyer?
ANSWER: No.
Here's the problem:
Builders are telling Homebuyers and Home Inspectors: (1) that neither the Homebuyer nor his Inspector may examine a home already sold to the Buyer and at that time under construction for that Buyer; or, (2) that the inspection may only be done if the Home Inspector provides extensive financial guarantees and relationships directly to the Builder that exceed those required by state law for Home Inspectors; and/or, (3) that the Builder's warranties of workmanship owed to the Homebuyer are void or avoidable as to any component the Home Inspector might access inspect; and/or (4) the Builder will refuse to perform his warranties or terminate the contract or construction progress if the Homebuyer or Home Inspector contests any of the foregoing. Part or all of these contentions and acts are wrong in whole or part. I will address that here only as a mater of licensure law.
The Builder, in addition to the authority set forth, below owes the Homebuyer certain performances as set forth under the licensure laws and rules of the Registrar of Contractors. The Builder owes the Buyer a workmanshiplike product under R4-9-108, owes the implied warranty of workmanship and habitability under the caselaw interpreting "sound workmanship" as set forth in Kubby v. Crescent Steel, 105 Ariz. 459, 466 P.2d 753 (1970), Nastri v. Wood Brothers Homes, Inc. 142 Ariz. 439, 690 P.2d 158 (1984), Richards v. Powercraft Homes, Inc., 139 Ariz. 242, 678 P.2d 427 (1984), and the implied covenant of good faith and fair dealing (the consumer's unharassed right to assure receipt of comporting product and to receive lawful treatment) as set forth in Wagonseller v. Scottsdale Mem. Hosp., 147 Ariz. 370, 383, 710 P.2d 1025 (1985). In addition, the law and rules of the Arizona Board of Technical Registration ("BOTR") regulating home inspection have the status of law and are "codes of the state." The BOTR rules regulate what a Home Inspector is required to have for proof of financial responsibility to inspect in the state of Arizona, mandates loyalty to the customer and prohibits financial or business connections with the party whose work is to be inspected (the Builder) which would impair the impartiality of the Home Inspector inspecting him. Lombardo v. Albu 199 Ariz. 97, 14 P.3d 288 (2000) provides that licensure rules are standards of care and that violations of rules are "failures per se." Arizona State Real Estate Department v. American Standard Gas & Oil Leasing Service, 580 P.2d 15, 119 Ariz. 183 (Ariz.App., 1978) holds the same for violations of licensure statutes.
The long and short of it is that there is a good argument that the Builder cannot make the above demands under his own licensure and to do so is a licensure violation. The Builder is bound to obey his contract, the licensure law and regulations and cannot threaten to breach his contract with the Buyer through contract suspension, performance suspension, warranty termination or avoidance that is prohibited. I will briefly discuss this: