Disclaimer of implied warranties
Sec. 9. (a) A builder may disclaim all implied warranties only if
all of the following conditions are met:
(1) The warranties defined in this chapter are expressly
provided for in the written contract between a builder and an
initial home buyer of a new home.
(2) The performance of the warranty obligations is backed by
an insurance policy in an amount at least equal to the purchase
price of the new home.
(3) The builder carries completed operations products liability
insurance covering the builder's liability for reasonably
foreseeable consequential damages arising from a defect
covered by the warranties provided by the builder.
(b) The disclaimer must be printed in a minimum size of 10 point
boldface type setting forth that the statutory warranties of this
chapter are in lieu of the implied warranties that have been
disclaimed by the builder, and the initial home buyer must
affirmatively acknowledge by complete signature that the home
buyer has read, understands, and voluntarily agrees to the disclaimer.
Additionally, the initial home buyer must acknowledge the
disclaimer of implied warranties by signing, at the time of execution
of the contract, a separate one (1) page notice, attached to the
contract, that includes and begins with the following language:
"NOTICE OF WAIVER OF IMPLIED WARRANTIES
I recognize that by accepting the express warranties and the
insurance covering those warranties for the periods of time
provided in this contract, I am giving up the right to any claims
for implied warranties, which may be greater than the express
warranties. Implied warranties are unwritten warranties relating
to the reasonable expectations of a homeowner with regard to
the construction of the homeowner's home, as those reasonable
expectations are defined by the courts on a case by case basis.".
(c) If there is a default of either:
(1) the insurance for the performance of the warranty
obligations; or
(2) the completed operations products liability insurance;
the disclaimer by the builder is void from and after the default.
As added by P.L.2-2002, SEC.12.
Last modified: May 24, 2006