SW Legal studies in Business

Iowa Adopts Implied Warranty of Workmanlike Construction Doctrine
Description

Iowa high court held that the state would adopt the doctrine of implied warranty of workmanlike construction so that the buyer of a home with a hidden defect could have a cause of action against the builder once the defect became known.

Topic Contracts
Key Words

Breach of Implied Warranty; Statute of Limitations; Construction

C A S E   S U M M A R Y
Facts

The Speights bought a home in 2000 that was built in 1995 by Walters Development. After they bought the home they noticed water damage and mold. Inspection determined that the damage came from a defectively constructed room and rain gutters. The Speights sued Walters in 2005 for breach of implied warranty of workmanlike construction. The district court held for Walters due to the statute of limitations and because Iowa does not recognize implied warranty of workmanlike construction. The appeals court affirmed. The Speights appealed.

Decision

Reversed and remanded. The five-year statute of limitations begins to run when the Speights discovered the water damage and mold, not when the house was originally built. By this decision, Iowa adopts the doctrine of implied warranty of workmanlike construction as applied to subsequent, as well as initial, buyers. The implied warranty of workmanlike construction rule addresses the inequities between the buyer and the builder-seller by requiring that a building be constructed in a reasonably good and workmanlike manner and be reasonably fit for the intended purpose. The lack of privity between the subsequent buyer, the Speights, and the builder is not a bar to allowing a subsequent buyer to recover on an implied warranty claim. Since the Speights could not know of the defective construction until the problem was revealed, their suit may proceed.

Citation

Speight v. Walters Development Co., ---N.W.2d--- (2008 WL 271648, Sup. Ct., Iowa, 2008)

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