Condominium and New Home Warranties and
Rights of Action
June 27, 2012
Raymond Daniel Burke
Ober|Kaler
100 Light Street | Baltimore, Maryland 21202
410.347.7392 | rdburke@ober.com
www.marylandcondolaw.com
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Implied Warranties Under Maryland Law
Warranties that the law implies in every new
home purchase agreement
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Implied Warranties Under Maryland Law
Do not have to appear in any written document
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Implied Warranties Under Maryland Law
Implied Warranties Under Title 10
Apply to “improvements” meaning every newly
constructed private dwelling unit and every
fixture and structure made part of it at the time
of construction by a building contractor of
subcontractor
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Implied Warranties Under Maryland Law
Implied Warranties Under Title 10
Enforceable against a “vendor”
Any person engaged in the business of erecting or
otherwise creating an improvement to realty
or
To whom a completed improvement has been
granted for resale in the course of his business
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Implied Warranties Under Maryland Law
Implied Warranties Under Title 10
1) Free from faulty materials
2) Constructed according to sound engineering
standards
3) Constructed in a workmanlike manner
4) Fit for habitation
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Implied Warranties Under Maryland Law
Implied Warranties Under Title 10
Home must comply with:
1) Applicable building codes
2) The contract documents
3) Industry standards
4) Manufacturer’s specifications
5) Americans With Disabilities Act
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Implied Warranties Under Maryland Law
Implied Warranties Under Title 10
Cannot be excluded or modified unless the
home has been completed
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Implied Warranties Under Maryland Law
Implied Warranties Under Title 10
An exclusion or modification of the warranties
on a completed home must:
1) Be in writing
2) Set out “in detail” the warranty to be excluded or
modified
3) Set out the terms of the new agreement
4) State that the purchaser consents
5) Signed by the purchaser
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Implied Warranties Under Maryland Law
Implied Warranties Under Title 10
Run for one (1) year from
1) Delivery of the deed or
2) Date of possession
Whichever is first
Except:
Where the home is not complete at the time of delivery of the
deed, the warranties run one (1) year from
1) Date of completion or
2) Date of possession
Whichever is first
Except:
For “structural defects” the warranties run for two (2) years from
those dates
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Implied Warranties Under Maryland Law
Implied Warranties Under Title 10
In the event of a breach of the warranties, a
court may award legal or equitable relief, or
both, as justice requires
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Implied Warranties Under Maryland Law
Implied Warranties Under Title 10
An action must be commenced
1) Within two (2) years after the defect as
discovered or should have been discovered
or
2) Within two (2) years after the expiration of the
warranty
Whichever is first
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Implied Warranties Under Maryland Law
Implied Warranties Under Title 10
Apply to newly constructed condominiums and the
common elements
One or more original unit owners can sue for breach of
the warranties as to the common elements, and can
recover the full damages
Even if some unit owners’ claims are time-barred
The council of unit owners can bring the action on
behalf of any two or more unit owners
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Implied Warranties Under Maryland Law
Condominium Implied Warranties
Under Title 11
The Title 10 implied warranties apply to all sales
by developers of condominiums, and a “newly
constructed private dwelling unit” means a
newly constructed or newly converted
condominium unit and its appurtenant undivided
fee simple interest in the common areas
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Implied Warranties Under Maryland Law
Condominium Implied Warranties
Under Title 11
May not be modified or excluded
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Implied Warranties Under Maryland Law
Condominium Implied Warranties
Under Title 11
Implied warranties on the unit
In addition to the Title 10 implied warranties
there is a warranty that the developer will correct
any defects in materials or workmanship in the
construction of
1) walls
2) ceilings
3) floors
And that the heating and air-conditioning systems
were installed in accordance with acceptable
industry standards
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Implied Warranties Under Maryland Law
Condominium Implied Warranties
Under Title 11
Implied warranties on the unit
Run for one (1) year from the transfer of title to the
unit
Notice of a defect must be given to the
developer within the one (1) year warranty
period
An action must be commenced within one (1)
year of the end of the warranty period
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Implied Warranties Under Maryland Law
Condominium Implied Warranties
Under Title 11
Implied warranty on the common elements
In addition to the Title 10 warranties
Warranty from the developer to the council of unit owners
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Implied Warranties Under Maryland Law
Condominium Implied Warranties
Under Title 11
Implied warranty on the common elements
In addition to the Title 10 warranties there is a warranty that
the developer will correct any defects in defect in materials
or workmanship in the following specified components
and
that the following components are within acceptable industry
standards in effect when the building was constructed:
1) roof
5) electrical systems
2) foundation
6) plumbing systems
3) external and supporting walls 7) other structural
components
4) mechanical systems
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Implied Warranties Under Maryland Law
Condominium Implied Warranties
Under Title 11
Implied warranty on the common elements
Run for three (3) years from
The first transfer of title to a unit owner
Except:
As to any common element not completed at the
time of first transfer of title, the warranty runs for
three (3) years from completion of that element or
from its availability for use by all unit owners,
whichever is later
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Implied Warranties Under Maryland Law
Condominium Implied Warranties
Under Title 11
Implied warranty on the common elements
Run for three (3) years from
The first transfer of title to a unit owner
or
Runs for two (2) years from
The date on which the unit owners, other than the developer and
its affiliates, first elect a controlling majority of the board of
directors
Except:
As to any common element not completed at the time of first
transfer of title, the warranty runs for three (3) years from
completion of that element or from its availability for use by all unit
owners, whichever is later
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Implied Warranties Under Maryland Law
Condominium Implied Warranties
Under Title 11
Implied warranty on the common elements
Notice of a defect must be given to the developer
within the two (2) or three (3) year warranty period
whichever is applicable
An action must be commenced within one (1) year
of the end of the warranty period
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Homeowner Association Warranties
Every homeowner receives the Title 10 implied
warranties on their home unless they are
modified or excluded by contract
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Homeowner Association Warranties
Common Area Warranties under Title 11B
Implied warranty on the common areas
In addition to the Title 10 warranties on the homes
Warranty from the “vendor” or “grantor” to the
homeowners association
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Homeowner Association Warranties
Common Area Warranties under Title 11B
Implied warranty on the common areas
Common area must comply with:
1) Applicable building codes
2) The contract documents
3) Industry Standards
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Homeowner Association Warranties
Common Area Warranties under Title 11B
Implied warranty on the common areas
In addition to the Title 10 warranties on the homes
Warranty from the developer to the homeowners
association that the improvements to the common
areas are
1) free of faulty materials
2) constructed according to sound engineering
standards
3) constructed in a workmanlike man
4) Manufacturer’s specifications
5) Americans With Disabilities Act
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Homeowner Association Warranties
Common Area Warranties under Title 11B
Implied warranty on the common areas
Pools
Playgrounds
Clubhouses
Sport Centers
Pavilions
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Homeowner Association Warranties
Common Area Warranties under Title 11B
Implied warranty on the common areas
Retaining Walls
Curbs and sidewalks
Parking lots
Drainage areas
Private roads
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Homeowner Association Warranties
Common Area Warranties under Title 11B
Implied warranty on the common areas
Runs for two (2) years from the first transfer of title
to a lot
Except:
As to any common are improvement not completed
at the time of first transfer of title, the warranty runs
for two (2) years from completion of that
improvement or from its availability for use by the
lot owners, whichever is later
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Homeowner Association Warranties
Common Area Warranties under Title 11B
Implied warranty on the common areas
Runs for two (2) years from the first transfer of title
to a lot
or
Runs for two (2) years from the date on which the
lot owners, other than the declarant and its
affiliates, first elect a controlling majority of the
governing body of the homeowner association
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Homeowner Association Warranties
Common Area Warranties under Title 11B
Implied warranty on the common areas
Notice of a defect must be given to the vendor or
grantor within the two (2) year warranty period
An action can be brought by the homeowner
association or any lot owner
Action must be brought within one (1) year of the
end of the warranty period
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Express Warranties Under Maryland Law
Governed by Title 10
Applies to representations concerning
“improvements” meaning every newly constructed
private dwelling unit and every fixture and structure
made part of it at the time of construction by a
building contractor of subcontractor
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Express Warranties Under Maryland Law
Governed by Title 10
Representations by a “vendor”
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Express Warranties Under Maryland Law
Governed by Title 10
Express warranties:
1) Any written affirmation of fact or promise which relates to the
improvement and is made a part of the basis of the bargain
between the vendor and the purchaser creates an express
warranty that the improvement conforms to the affirmation or
promise.
2) Any written description of the improvement, including plans
and specifications of it, which is made part of the basis of the
bargain between the vendor and the purchaser creates an
express warranty that the improvement conforms to the
description.
3) Any sample or model which is made a part of the basis of the
bargain between the vendor and the purchaser creates an
express warranty that the improvement conforms substantially
to the sample or model.
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Express Warranties Under Maryland Law
Governed by Title 10
Express warranties:
Even oral representations may be actionable
Not necessary to use formal words like “warranty”
or “guaranty”
Content of brochures and sales literature
Statements by sales agents
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Express Warranties Under Maryland Law
Governed by Title 10
Express warranties:
Does not include affirmation of the value or
statement of opinion or recommendation
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Express Warranties Under Maryland Law
Governed by Title 10
Once made “neither words in the contract of sale, the
deed, other instrument of grant, nor merger of the
contract of sale into the deed or other instrument of
grant is effective to exclude or modify the warranty.”
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Express Warranties Under Maryland Law
Governed by Title 10
An exclusion or modification of an express
warranty must:
1) Be in writing
2) Set out “in detail” the warranty to be excluded or
modified
3) Set out the terms of the new agreement
4) State that the purchaser consents
5) Signed by the purchaser
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Express Warranties Under Maryland Law
Unless the express warranty provides otherwise:
Run for one (1) year from
1) Delivery of the deed
2) Date of possession
Whichever is first
Except:
Where the home is not complete at the time of delivery of
the deed, The warranties run one (1) year from
1) Date of completion
2) Date of possession
Whichever is first
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Express Warranties Under Maryland Law
In the event of a breach of an express, a court
may award legal or equitable relief, or both, as
justice requires
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Express Warranties Under Maryland Law
An action must be commenced
1) Within two (2) years after the defect as
discovered or should have been discovered
or
2) Within two (2) years after the expiration of the
warranty
Whichever is first
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Separate Claims Under Contract Law
A representation or promise about the condition
of an improvement at the time it is sold is a
warranty, and enforcement is governed by
warranty law.
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Separate Claims Under Contract Law
A promise to perform an obligation in the future
other than the payment of money is a
contractual obligation governed by the law of
contracts
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Separate Claims Under Contract Law
“We will fix it.”
Creates a promise of future performance which
constitutes a contractual obligation
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Separate Claims Under Contract Law
Governed by the discovery rule:
A claim accrues when the claimant knew, or, in
the exercise of reasonable diligence, should have
known, of the wrong
A claim must be brought within three (3) years from
the date of discovery
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Claims Under The Maryland Consumer
Protection Act
Applies to “consumer realty”
New sales of real property purchased primarily for
personal, household, family or agricultural purposes
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Claims Under The Maryland Consumer
Protection Act
“Unfair and deceptive trade practices”
Representation that realty has a “characteristic”
or “quality” that it does not have
A representation that a property was constructed in
accordance with the plans and specifications is a
representation of a “characteristic” which, if false, is
an unfair and deceptive trade practice under the
Act.
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Claims Under The Maryland Consumer
Protection Act
Enforceable by the Attorney Generals’ Office
The Act also provides for a private right of action to
recover in law or equity
Claimant can recover “reasonable attorney’s fees”
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Claims Under The Maryland Consumer
Protection Act
Enforceable by the Attorney Generals’ Office
The Act also provides for a private right of action to
recover in law or equity
Claimant can recover “reasonable ATTORNEY’S
FEES”
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Negligence Actions
Maryland recognizes a general cause of action for failure to exercise
due care in construction. This includes negligence in the design and
construction of the project, negligent selection of materials, and
negligent supervision of the various trades.
1) A duty will be imposed, even where only economic loss is involved,
where the nature of the harm gives rise to the risk of serious
personal injury among a foreseeable group.
2) A duty will be imposed where the harm results in property damage.
3)
Where the harm is purely economic loss, without the risk of
personal injury, a duty will be imposed where there is contractual
privity between the parties, or a sufficiently close nexus or
relationship so as to be the functional equivalent of contractual
privity.
A action must be brought within three (3) years of discovery under the
discovery rule
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Maryland Construction Law Deskbook
Published by the Maryland Bar Association
Construction Law Section
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Maryland Condo Law Blog
www.marylandcondolaw.com
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