Buying New Construction? Don’t Let Those Builders Push You Around!

From the concrete streets of metropolitan cities to the sprawling suburbs in most areas around the country, new construction is present in the form of townhouses, condominiums, single homes and the ever-so-popular “over-55 communities.”

While many of these properties are esthetically impressive complete with over-sized family rooms, open kitchen areas, and every upgrade/option imaginable, there are also the unfortunate, yet inevitable pitfalls associated with new construction such as delayed completion dates, cost overruns and building defects. With respect to the latter, buyers of new construction should be informed of their legal rights in the event that construction defects impede their use and enjoyment of the property.

Traditionally, a vendor of property is responsible for the quality of the property sold only to the extent that the vendor expressly agrees to be responsible. In years past, the notion was that a seller and buyer dealt with one another at “arm’s length” and, therefore the buyer should only be afforded the specific protection for which he/she contracts. However, in the context of new construction, the laws started to change over the past few decades. In states such as the Commonwealth of Pennsylvania, a well-established body of case law has evolved that has afforded protection to buyers in the form of implied warranties.

The “implied warranty of habitability” and “implied warranty of reasonable construction” exist between a builder-vendor of new construction and a buyer regardless of whether any mention of such warranties is actually written into the contract of sale (those huge 25-plus page contracts that builders make you sign!). These warranties, which automatically exist between builder-vendors and buyers, represent that the property is suitable for living and is constructed with a reasonable level of skill and workmanship. Further, these warranties apply whether the buyer purchases the new home prior to, during or after completion of construction.

So, what does this mean for those of you who are about to purchase a plush, new townhouse on a golf course? It means that you may have legal recourse in the event that the builder has improperly constructed your home and/or constructed the home with defects that make the property unfit for living. Some examples of defects that could trigger these warranties and potentially provide you with a cause of action against the builder-vendor include: severe water leakage leading to mold growth, faulty plumbing, contaminated water supply, improper foundation and faulty landfill/site development.

Even though the courts in Pennsylvania (and some other states) have consistently found that these implied warranties afford buyers of new construction protection from faulty workmanship, BEWARE…a builder-vendor could attempt to disclaim such warranties in the contract of sale. The Pennsylvania courts have ruled that a builder-vendor CAN disclaim these implied warranties but the disclaimer language must be clear, unambiguous and set forth in the contract. This means that the builder-vendor will not get away with burying the disclaimer somewhere in that bible-sized contract of sale. However, if the disclaimer language is clear, easy to find in the contract, and easy to understand, then there is a good chance that a court would uphold the disclaimer. Under that circumstance, it would be unlikely that you would prevail in asserting a claim that the builder breached one or both of these warranties. For this very reason, it is your absolute responsibility to thoroughly read your contract of sale (or at least hire a highly skilled real estate attorney to read through it for you!!). The last thing that a judge wants to hear is that you didn’t realize the builder-vendor disclaimed the implied warranties because you failed to read your contract of sale.

So, here is a little recap:

1. Builders of new construction have an obligation to make sure the property is built in a reasonable, workmanlike manner and fit for living.

2. The implied warranties of habitability and reasonable construction protect buyers regardless of the warranty provisions in the contract of sale.

3. A builder can disclaim these warranties by using clear, unambiguous language in the contract.

4. All buyers should thoroughly read through the contract of sale.

5. If your new home has significant defects and is unfit for you to live in, then you should consult an attorney to see if you have valid claims against the builder.

New Construction Incorporates Green Methods

Since the financial crash of 2008 one of the major changes that has taken place on the home building industry has been the rise of the green building in new construction. In 2011 the green segment of the market accounted for 17% of all construction projects with an economic impact of $17,000,000,000. In 2013 this rose to $87,000,000,000. Green buildings, also known as sustainable buildings, are designed to incorporate building processes and materials that are resource and energy efficient. Because of the long history of standard house design and construction methods, the new goal of going green requires the cooperation and feedback from not only the architects and engineers but also the end user at all stages of the building process.

The goals of more efficiency that are being demanded by consumers are being helped by the development of new technologies that complement current practices. Some of the new practices that are being implemented are more efficient use of water, energy and other resources. Other items of concern for builders are homeowner health and the reduction of waste and pollution in the building process.

One method that is being put into practice to achieve this is new construction using natural materials. One of the materials of choice that is being widely used is the straw bale. Straw is a material that is widely available and modestly priced. If you use straw bales as the material of choice in your home, after they are placed they can be sealed with plaster or adobe to help increase the bales structural integrity. Another common design is the Earth Ship. This housing unit uses discarded automobile and truck tires that are packed with earth. After they are packed the tires are then formed into the house shell, which can then be covered with adobe or plaster for additional structural integrity. Many of these Earth Ship homes also use plain dirt and grass for the roof structures. This type of structures emphasizes the green goal of using sustainable resources and reducing the environmental impact of standard construction techniques.

Although these types of structure can seem extreme to some, it is a viable subset of this whole movement. This movement has also had an impact on standard construction practices. New construction techniques may not embrace these types of materials but they have embraced and are utilizing more energy efficient electrical appliances, water and heating systems. One of the big shifts in this area is the use of appliances such as stoves, refrigerators, and HVAC systems that are Energy Star rated. Energy Star is a government organization and an Energy Star rating will give prospective buyers an insight into how the new construction ranks in terms of overall energy efficiency.

This concept of sustainable development and efficiency can be traced back to not only the financial crisis of 2008 but also the explosion of energy prices worldwide. Green building today incorporates many different practices, techniques, and innovations that are designed to achieve its goals. These innovations can include passive and active solar systems for energy production and heat to the use of low impact building materials in the construction process. Even though going green is still in its infancy it holds out great promise.

Why Should You Buy New Construction?

If you are planning to move to a new house or to a new office, consider choosing a new construction instead of buying an existing one. Buying a new construction in can be an expensive affair but you won’t regret it. When you choose a pre-owned home, you may have to accept it the way it is but when you choose to get a new construction then you have the choice to get it designed as per your requirements. Everything is new and you can choose the colors and patterns you like. Here are some other advantages of buying a newly built home.

When you are building your own house then you can get it designed just like the way you want. If you have ever dreamt of a special design for your kitchen or wished for a patio overlooking your garden then you can easily get it in a newly constructed house. You can explain your ideas to the architect who would then turn your dreams into reality and ensure that it is practical as well.

Whether you need a fireplace, an open kitchen or a Victorian style bedroom, you can get them all. You can make sure that they are well insulated and the plumbing system works efficiently as well. If you want to make your house more environment-friendly then you can choose the doors and windows accordingly as well. You can also get French windows or sliding door and leave space for it.

As opposed to this, when you buy a pre-owned house, you might have to accept whatever is being offered. Making changes to the existing structure would mean more expenses. Then you may have to deal with leaking pipes, peeling paint and faulty electrical wiring. With old constructions you may have to deal with a lot of repair work and you can never be sure how strong the structure is.

If you have considered your options and have decided to build your own house then you need to make sure that you choose a good company. You can look for a construction company that deals in residential construction. A well reputed company generally has a good team of experts who can provide with all the services related to constructions and remodeling. They have architects who can help you to design the house better.

The company also provides you with plumbers, electricians and other professionals who make things more convenient and efficient for you. This means that you don’t have to run to different professionals and hire them to work for you. It saves your time and effort. When these professional are from the same company then they are able to work together and can help you to get your dream house. The company that provides with new construction services can provide with repair services as well. So if you need to add a new room or repair your house then you can contact them

New Construction Progress Inspections

Having a new customized home built can be an exciting experience. Getting through the process however can be a long and at times difficult ordeal. People having a new home built often rely solely on their builder to help guide them through the construction. Unfortunately he may not be the best person to advise them on their project.

Consider the following:

Home builders and many contractors involved in home construction are not licensed professionals
No license means no mandated formal training or apprenticeship, no continuing education, and minimal accountability

City building inspectors check for code compliance, not quality

Codes do not cover all aspects of the building process

These are facts that the majority of people building new homes or for that matter having work done on their existing home, do not know. But who can a new construction home buyer find who will objectively and competently oversee an entire building project and provide knowledgeable, unbiased information on construction techniques and materials? An independent, licensed, professional home inspector.

Most often home inspectors are called in after the new home owner has been experiencing problems with the house, often for many months or even years after it was built. What new construction home buyers almost never consider is hiring the inspector while the house is being built.

When problems do occur and the homeowner is asked about new construction inspections some reasons heard for not enlisting the help of an independent home inspector are:

The local building official is inspecting the home

As previously stated these inspectors look for code compliance, not quality. They are in the home only briefly during different phases of the construction. Do they miss things? Yes they do and no they are not usually held accountable for their mistakes. Also they are municipal employees and are not directly responsible to the persons buying the home. In other words they won’t contact the buyer if there are problems. They simply instruct the builder to correct the issues and move on to the next home.


It’s always about the money and for good reason. Costs can escalate quickly when building a new home. Buyers often want upgrades and these push up costs. So hiring an independent inspector can be an expense that is hard to justify. After all they believe the city building official is inspecting the home.

The builder has a good reputation

He may, but how do you know. Many people do not research the builder before signing on with them to build their home. This may be even truer when purchasing the home through a third party such as Realtor. Get references and check them before signing a contract.

It is also important to understand specifically what the builders’ job is. He generally is the person who manages the entire construction process. He must hire and coordinate many sub-contractors to install the vast amount of components that make up a house. This can be an overwhelming task for just one home, but if he is building several homes at once it can be nearly impossible to effectively manage.

It’s a new house; there should be nothing wrong (Very likely the biggest misconception related to new homes)

If you have ever bought an item, taken it home and it broke the first time you used it then the absurdness of this statement should be glaringly apparent. But never the less many people who have a home built believe because it is new and there is a one year builders warranty there will be no problems.

A house is a complex structure containing many different systems that must all function correctly and in harmony. It is built over the course of several months by many different people. Assuredly there are going to be problems and most often they are minor or cosmetic. But there are those occasional big problems that can make the home barely habitable or in extreme cases uninhabitable.

Was not aware that an outside inspector could be hired

When paying hundreds of thousands of dollars to have a home built, you are certainly entitled to have whom every you choose oversee the process. If you meet resistance to bringing in an outside inspector, this should be a red flag that something could potentially be wrong.

But why is it important to hire an independent inspector to look after the project?

Very simply quality control. If the construction company in charge of building your home knows that the customer has hired an independent, knowledgeable inspector to oversee the build, they are very likely to be more diligent in their quality of work. The psychological effect can be just as influential as the actual physical inspections.

Home inspectors and home builders encompass similar knowledge of home construction. However home inspectors are formally trained individuals who are licensed and consequently must also attend a specific amount of continuing education for license renewal. Home builders are not licensed, only registered, and therefore are not required to be formally trained or attend continuing education. They must only pay a yearly fee to remain registered and in business.

This is also true of the majority of contractors who perform work on a new or existing home. The term Home Improvement Contractor is a catch all category for companies that do any type of improvement work on homes. For example carpenters who frame the home fall into this category, as do roofers, foundation contractors, sheet rockers, flooring installers and many other individual companies that are part of putting a house together.

Another important aspect of the home inspectors experience is they view all types and ages of homes. They see the results of poor construction practices and understand better than anyone the consequences of inferior workmanship. It’s an important and unique perspective that no other profession can claim.

Finally a hired independent home inspector works for and reports directly to you. He is your advocate and can be an invaluable asset during the building of your new home.

Before you buy a new home consumer groups advise protecting your rights by taking these steps:
Research your builder thoroughly before signing any agreements.

Consider hiring a real estate lawyer to negotiate your contract. There is no better time to negotiate than before you buy.

To protect your right to sue, strike any requirement that disputes will go to binding arbitration.

Ask for the names of subcontractors building your home. Investigate their work before you buy.

Hire a professional inspector to examine your home during construction. Point out flaws that can be fixed before you move in.

Discuss your warranty thoroughly with the builder. Put everything in writing.

Leave a paper trail. Send all correspondence to the builder by certified mail, return receipt requested.

James Quarello, the founder of JRV Home Inspection Services, brings to the company an over 20 year background in industrial equipment installation engineering and home remodeling. Mr. Quarello is a graduate of The Home Inspection Institute of Americas’ intensive Connecticut certified HI-100 Home Inspector training program. He is also a graduate of Inspection Training Associates (ITA) New Construction inspection program and has passed the National Home Inspectors Exam (NHIE).

New Construction Interest Rates Hit Record Lows

Since the housing bubble burst a few years back, new construction has slowed significantly. While this does not bode particularly well for construction companies, it actually has provided the opportunity for consumers to benefit from some excellent bargains. Using the down market to your advantage as a real estate investor or homebuyer is easier than it may seem. By keeping your eyes out for deals and knowing quality when you see it, you could actually make very smart investments in the under-valued market.

In order to stimulate the economy, the Federal Reserve has placed interest rates at record low levels. This means that it is possible to secure record-breakingly low priced loans for a variety of consumer goods, including new construction loans. To build a new home, you do not purchase a traditional mortgage. First, you receive a construction loan. These loans are traditionally doled out in sections that correspond directly to the progress of your build. That way, if something goes awry during the building process, you won’t be stuck with thousands of dollars that you cannot yet afford to spend. Once the construction has been completed, then the bank uses a mortgage to pay back the construction loan.

Saving money on interest rates will make both the construction loan and the mortgage you purchase to pay back that loan less expensive. Because the housing market is in a downswing, there are real opportunities to capitalize. In order to make a smart investment, though, you need to do your market research. As you have probably heard by now, when it comes to real estate, the three most important things to consider are location, location, and location. There is no magic formula that can guarantee that you will make money on a particular investment, but there are certain clues that you can rely on to help you gauge a certain area.

Take a close look at transportation options in the location you are looking for, and find out if the city or state you live in has any future transportation plans for that location. Look at past real estate transactions near the spot you’re considering to get a sense of the market over the past 5 years. Talk to neighbors or local business owners if you’re brand new to the area to get a sense of how a particular location has changed over the years. By taking these steps, you can get a sense of any changes to the neighborhood or county and make a smart investment decision for you and your family.

By selecting a lower priced area that seems to be developing and taking advantage of the super low interest rates that are currently available to the public, you could make a very smart real estate decision. Of course, there are always risks involved with new construction and it is vital that you’re prepared for this so that you don’t end up in a difficult financial situation. Check out new construction options in your area today!