MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Judiciary B

By: Representative Davis (7th)

AN ACT TO CREATE THE NEW HOME WARRANTY ACT; TO DEFINE CERTAIN TERMS; TO PROVIDE FOR NEW HOME WARRANTIES AND EXCLUSIONS; TO REQUIRE NOTICE TO BUILDERS TO ALLOW BUILDERS TO COMPLY WITH THE PROVISIONS OF THIS ACT; TO PROVIDE WHEN ACTIONS COMMENCE; TO AUTHORIZE BUILDERS TO OBTAIN INSURANCE FOR WARRANTY OBLIGATIONS; TO PROVIDE FOR THE TRANSFER OF WARRANTIES; TO PROVIDE FOR LIMITATIONS ON DAMAGES AND ARBITRATION; TO AMEND SECTION 73-59-15, MISSISSIPPI CODE OF 1972, TO CONFORM TO THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act shall be known and may be cited as the "New Home Warranty Act."

SECTION 2. For purposes of this act the following words and phrases shall have the meanings ascribed herein unless the context clearly indicates otherwise:

(a) "Builder" means any person, corporation, partnership, or other entity which constructs a home or engages another to construct a home, including a home occupied initially by its builder as his residence, for the purpose of sale.

(b) "Building standards" means the standards contained in the building code, mechanical-plumbing code, and electrical code in effect in the county, municipality, or other local political subdivision where a home is to be located, at the time construction of that home is commenced, or, if the county, city, or other local political subdivision has not adopted such codes, the Standard Building Code, together with any additional performance standards, if any, which the builder may undertake to be in compliance.

(c) "Home" means any new structure designed and used only for residential use.

(d) "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.

(e) "Major structural defect" means any actual physical damage to the following designated load-bearing portions of a home caused by failure of the load-bearing portions which affects their load-bearing functions, as follows to wit:

(i) Foundation systems and footings;

(ii) Beams;

(iii) Girders;

(iv) Lintels;

(v) Columns;

(vi) Walls and partitions;

(vii) Floor systems;

(viii) Roof framing systems.

(f) "Owner" means the initial purchaser of a home and any of his successors in title to a home during the time the warranties provided under this act are in effect.

(g) "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.

SECTION 3. (1) Subject to the exclusions provided in this section, every builder warrants the following to the owner:

(a) One (1) year following the warranty commencement date, the home will be free from any defect due to noncompliance with the building standards.

(b) Two (2) years following the warranty commencement date, the plumbing, electrical, heating, cooling, and ventilating systems exclusive of any appliance, fixture, and equipment will be free from any defect due to noncompliance with the building standards.

(c) Six (6) years following the warranty commencement date, the home will be free from major structural defects due to noncompliance with the building standards.

(2) Unless the parties otherwise agree in writing, the builder's warranty shall exclude the following items:

(a) Defects in outbuildings including detached garages and detached carports, except outbuildings which contain the plumbing, electrical, heating, cooling, or ventilation systems serving the home; swimming pools and other recreational facilities; driveways; walkways; patios; boundary walls; retaining walls; bulkheads; fences; landscaping, including sodding, seeding, shrubs, trees, and planting; off-site improvements including streets, roads, drainage, and utilities or any other improvements not a part of the home itself.

(b) After the first year, the concrete floor of a basement and the concrete floor of an attached garage that is built separate from a foundation wall or other structural element of the home.

(c) Damage to real property which is not part of the home covered by the warranty and which is not included in the purchase price of the home.

(d) Any damage to the extent it is caused or made worse by any of the following:

(i) Negligence, improper maintenance, or improper operation by anyone other than the builder or any employee, agent, or subcontractor of the builder.

(ii) Failure by anyone other than the builder or any employee, agent, or subcontractor of the builder to comply with the warranty requirements of manufacturers of appliances, equipment, or fixtures.

(iii) Failure by the owner to give written notice by registered or certified mail to the builder of any defect within a reasonable time.

(iv) Any change, alteration, or addition made to the home by anyone after the initial occupancy by the owner, except any change, alteration, or addition performed by the builder, or any employee, agent, or subcontractor of the builder.

(v) Dampness, condensation, or other damage due to the failure of the owner to maintain adequate ventilation or drainage.

(e) Any loss or damage which the owner has not taken timely action to minimize.

(f) Any defect in, or any defect caused by, materials or work supplied by anyone other than the builder.

(g) Normal wear and tear or normal deterioration.

(h) Loss or damage which does not constitute a defect in the construction of the home by the builder, or any employee, agent, or subcontractor of the builder.

(i) Loss or damage resulting from war, accident, riot and civil commotion, water escape, falling objects, aircraft, vehicles, acts of God, lightning, windstorm, hail, flood, mud slide, earthquake, volcanic eruption, wind driven water, and changes in the level of the underground water table which are not reasonably foreseeable.

(j) Insect damage and rotting of any kind.

(k) Any loss or damage which arises while the home is being used primarily for a nonresidential purposes.

(l) Any condition which does not result in actual physical damage to the home.

(m) Bodily injury or damage to personal property.

(n) Failure of the builder to complete construction of the home.

(o) Any cost of shelter, transportation, food, moving, storage, or other incidental expense related to relocation during repair.

(p) Any defect not reported in writing by registered or certified mail to the builder or insurance company, as appropriate, prior to the expiration of the period of coverage of that defect plus thirty (30) days.

(q) Consequential damages.

(r) Any loss or damage to a home caused by soil conditions or soil movement if the home is constructed on land owned by the initial purchaser and the builder obtains a written waiver from the initial purchaser for any loss or damage caused by soil conditions or soil movement.

(s) Any defect in an electrical, plumbing, heating, air conditioning, or similar fixture not manufactured by the builder for which the manufacturer provides a warranty regardless of duration.

(t) Any defect in an appliance or consumer goods sold in conjunction with the home including, but not limited to, washers, dryers, ceiling fans, refrigerators, stoves, ice makers, garbage disposals, dishwashers, and humidifiers.

(3) The provisions of this section establish minimum required warranties and shall not be waived by the owner or reduced by the builder provided the home is a single family dwelling to be occupied by an owner as his home.

SECTION 4. Before undertaking any repair himself or instituting any action for breach of warranty, the owner shall give the builder written notice, by registered or certified mail, advising him of all defects and giving the builder a reasonable opportunity to comply with the provisions of this act.

SECTION 5. Any action to enforce any warranty provided in this act shall commence thirty (30) days after the expiration of the appropriate time period provided.

SECTION 6. All or part of the builder's obligation under any warranty required in this act may be insured by the builder for the benefit of the purchaser through an insurance company authorized to transact business in this state.

SECTION 7. Any warranty imposed under the provisions of this act and any insurance benefit shall automatically transfer without charge, to a subsequent owner who acquires title to a home. Any transfer of the home shall not extend the duration of any warranty or insurance coverage.

SECTION 8. The damages with respect to a single defect shall not exceed the reasonable cost of repair or replacement necessary to cure the defect and damages with respect to all defects in the home shall not exceed the original purchase price of the home.

The parties may provide for the arbitration of any claim in dispute. Any arbitration may be binding only to the extent provided by law.

SECTION 9. This act shall not be construed to provide the exclusive remedies, warranties, and prescriptive periods as between builder and owner relative to home construction and all other provisions of law relative to warranties and redhibitory vices and defects shall apply including any common law remedies.

SECTION 10. Section 73-59-15, Mississippi Code of 1972, is amended as follows:

73-59-15. (1) This chapter shall not apply to:

(a) Agricultural buildings, buildings used for agricultural purposes, buildings constructed as a community effort, or tenant houses;

(b) Any person who undertakes construction or improvement on his own residence or on his other real estate holdings, or who acts as his own general contractor in the performance of construction or improvement on his own residence or on his other real estate holdings, or who acts under the supervision of the owner-occupant who is the general contractor;

(c) Any person who undertakes residential construction or improvement, or who acts as a general contractor in the performance of residential construction or improvement, or who acts under supervision of the owner-occupant with respect to residential construction or improvement, when the owner of such construction or improvement is related to such person by consanguinity or direct affinity;

(d) The owners of property who supervise, superintend, oversee, direct or in any manner assume charge of the construction, alteration, repair, improvement, movement, demolition, putting up, tearing down, or maintenance of any building, railroad, excavation, project, development, improvement, plant facility or any other construction undertaking on such property for use by such owner and which will not be for sale, rent, public use or public assembly;

(e) An employee of a licensed residential builder;

(f) A contractor holding a valid license or certificate of responsibility for general construction from the board;

(g) Any nonresident contractor holding a valid license or certificate of responsibility for general construction.

(h) The provisions of Sections 1 through 9 of this act.

(2) A person specified in subsection (1)(b) shall not make more than two (2) applications for a permit to construct a single residence or shall not construct more than two (2) single residences within a period of one (1) year. There shall be a rebuttable presumption that such person intends to construct for the purpose of resale, lease, rent or any similar purpose if more than two (2) applications are made for a permit to construct a single residence or if more than two (2) single residences are constructed within a period of one (1) year.

(3) The provisions of this section shall not apply to builders and remodelers who are not domiciled in the State of Mississippi. Builders and remodelers who are not domiciled in the State of Mississippi are not required to be licensed under the provisions of this chapter if the state in which they are domiciled requires licensing and the licensing state's requirements are at least the equivalent of those requirements provided in this chapter.

SECTION 11. This act shall take effect and be in force from and after July 1, 1997, and shall apply to new home warranties entered into on or after July 1, 1997.