Bad Foundation: Washington’s Lack of Homeowner Rights

By
Brendan Williams
43 Mitchell Hamline L.J. of Pub. Pol’y and Prac. 155 (2019)

Washington is one of the nation’s six fastest-growing states, according to the U.S. Census Bureau. In the first two months of 2018, the Economic and Revenue Forecast Council reported 24,800 construction permits were issued for single-family housing. Through April 2018, growth in the prices of single-family homes in the Seattle metropolitan area had led the nation for twenty straight months—with home prices growing about $200,000 on average over that time. Yet the state is an outlier in disallowing access to the courtroom, quite apart from other remedies, for those complaining of negligence in the construction of single-family homes.

Under Washington law, the only remedy in such a case is generally an “implied warranty of habitability.” As the Washington Supreme Court has stated:

Washington does not recognize a cause of action for negligent construction on behalf of individual homeowners. Beyond the terms expressed in the contract of sale, the only recognized duty owing from a builder-vendor of a newly completed residence to its first purchaser is that embodied in the implied warranty of habitability, which arises from the sale transaction.

Arguably, this can be read as simply ensuring that a home does not immediately collapse upon its first owner taking possession of it. As Justice Brachtenbach once wrote for the court, “[t]he auto should run down the road without wheels falling off and new houses should provide habitation without foundations falling apart.” Obviously, requiring that the home be unfit for occupancy is not much of a consumer protection, and may turn upon the question of whether there was “evidence of personal or physical injury . . . .” Any claim of economic damages is barred. Furthermore, privity of contract is required to exercise even this minimal right. As a leading Washington construction law attorney has written, “[i]f a family buys a 1-year-old house, then watches it slide down the hill because the builder didn’t put in a proper foundation, can the owner recover from anyone? No. The law says a second owner has no rights.”

Despite its booming housing market and progressive reputation, Washington is alone among West Coast states in failing to provide greater consumer protections for those buying new homes, or for those complaining of defects in the renovation of existing homes. Paradoxically, Washington does guarantee protections for those purchasing new  condominiums, many of whom reside in affluent areas of Seattle and the “Eastside” suburban communities. And corporate owners of multi-family housing can recover for construction negligence. For example, when it was announced in 2010 that a nine-year-old, twenty-five-story apartment complex in Seattle was to be torn down due to its dangerous state resulting from certain defects, the apartment complex owner sued the contractors. Similarly, in 2018, when many tenants of two Seattle twenty-four-story apartment towers were displaced over plumbing defects—in a complex only five-years-old—the owner sued the mechanical contractor.

Past “homeowners’ rights” efforts have failed in the Washington Legislature. Legislation to require statutory warranties for those purchasing new homes passed the Senate in the 2007 and 2008 sessions, and passed the House Judiciary Committee, only to be denied House floor votes amidst enormous contention. It is an interesting case study in how a state’s legislative process can be held captive by a powerful lobby.

This article examines the protections for purchasers of new single-family homes that exist in other states. In doing so, this article first examines the law in California and Oregon then turns to a sampling of laws from three more conservative states. For this sample, Florida and Texas were chosen as they are the two largest “red” states by population, and Wyoming was also chosen, as a Gallup Poll found it was the nation’s most conservative state. However, any number of states could have been chosen, as no other state in the country offers less legal protection to purchasers of new homes than Washington. This article then examines the Washington legislation that failed to pass into law from 2007–08. Finally, it suggests an approach for the Washington Legislature to take based upon the protections in other states.