Implied Warranty of Habitability: Are Design Professionals At Risk?
In 1324 W. Pratt Condominium Ass'n v. Platt Const. Group, Inc., 2010 WL 3788057 (Ill.App. 1 Dist.), a condominium association sued a construction company it retained to build an eight-unit residential condominium. The condominium association asserted that the construction was performed in a faulty manner which resulted in roof leakage and damage to personal property of condominium residents during a series of severe rainstorms in September 2008 in Chicago. The rainstorms were alleged to have substantially worsened the leaks and exacerbated the mold problem.
The First District Appellate Court of Illinois held that the construction company’s designation as a “builder” rather than a “builder-vendor” did not protect it from the condominium association’s claim that it violated an implied warranty of habitability in the construction of the condominium building. As a result, the Appellate Court found that the trial court’s dismissal of that count was in error. However, the trial court’s dismissal of the negligence count was upheld pursuant to Moorman doctrine as the “sudden or dangerous occurrence” exception was deemed to not apply, because the storms did not cause the damage requiring repair of the building and individual units. Because the leaks and mold were present before the storms of September 2008, the First District held that the storms did not cause the damage.
What can we take away from the 1324 W. Pratt case and its analysis of the implied warranty of habitability? The First District, at least, has eliminated the limited application of the implied warranty of habitability to only those builders who are also vendors as that limitation would “defeat the warranty’s policy goals of holding builders themselves accountable for latent defects in new homes and placing the costs of repairs on the builders who created the defect.”
The 1324 W. Pratt case may also be read to imply that the implied warranty of habitability may be applied to design professionals. As discussed in more detail here, the application of the implied warranty of habitability against design professionals is unclear at best. The warranty, as defined in the opinion, applies against a lessor or builder of a residential unit where latent defects thereabout interfere with the inhabitant’s reasonable expectation that the unit will be suitable for habitation. This definition would seem to absolve design professionals. However, the doctrine seeks to assign liability for the damage upon the entity responsible for that latent defect. Certainly, a design professional is in the cross-hairs for damages attributable to a latent defect (i.e., a fault in the property that could not have been discovered by a reasonably thorough inspection before the sale) resulting in damage. Design professionals’ contributions are often subtle and hidden by the builder’s construction.
wow, so the "builder" ended up with a lawsuit over his head because he was not classified as "builder-vendor"?