Shiny New Build, Hidden Problems
Buying or selling new construction is supposed to be smoother than dealing with older homes. But in practice, defects often surface within months—sometimes years—after closing. Utah law draws some sharp lines on liability, and agents who don’t understand them risk disputes, lawsuits, or worse.
Who Bears the Liability?
- Builders and Developers
- In Utah, the builder (or general contractor) is usually first in line for liability if the workmanship doesn’t meet code, industry standards, or contract specs.
- Developers who sell directly to buyers can also be held responsible if they oversaw or approved defective work.
- Subcontractors
- Many Utah builders hire subs for specialized work (roofing, plumbing, electrical). If the defect is tied to a sub’s work, claims can be made directly against them.
- Utah’s “economic loss rule” often funnels these claims back through the contract chain, but subs aren’t immune.
- Agents and Brokers
- Real estate agents aren’t construction guarantors—but they do have disclosure duties. If an agent knows (or should reasonably know) about workmanship defects, failing to disclose can trigger liability under Utah’s Real Estate Licensing and Practices Act.
- Agents should document all representations and avoid making promises about “builder quality.”
Warranty Coverage in Utah
- Builder Warranties: Most Utah builders provide at least a one-year express warranty covering workmanship and materials. Some provide longer warranties for structural issues.
- Implied Warranties: Even without a written warranty, Utah recognizes implied warranties of habitability and quality in new home sales. These can last years and protect buyers if the builder cut corners.
- Exclusions & Fine Print: Warranties often exclude damage caused by normal wear, owner neglect, or “acts of God.” Agents should advise clients to read them closely.
Remedies for Buyers
If defects surface, Utah buyers have several legal paths:
- Demand Repair: Many contracts and warranties require notice to the builder and a chance to fix the problem.
- Withhold Payment or Escrow Funds: If defects are discovered pre-closing, buyers may negotiate escrow holdbacks until repairs are completed.
- Lawsuit for Breach: When repairs aren’t made, buyers can sue for breach of contract, breach of warranty, or negligence.
- REC (Real Estate Commission) Complaints: If an agent misrepresented the quality of the construction, buyers can file a complaint against their license.
How Agents Can Stay Out of the Crossfire
- Never overpromise: Don’t tell buyers “this builder has no issues” or “you won’t need to worry.” Stick to facts.
- Get everything in writing: Encourage clients to review warranties and inspection reports, and to document defect notices to the builder.
- Use inspections—even on new builds: A professional inspector can catch workmanship issues early and save everyone headaches.
- Educate sellers and landlords: If reselling a newly built property, disclose any known defects—even if you think they’ve been fixed.
The Bottom Line
When new construction goes wrong in Utah, liability usually falls on the builder or subcontractor. But agents and brokers can be dragged into disputes if they fail to disclose known issues or make careless assurances. The safest path? Stay transparent, document everything, and remind clients that a new home doesn’t mean a problem-free home.
Call to Action
If you’re an agent, landlord, or buyer dealing with new construction defects, Duckworth Legal Group can help you understand your rights and protect yourself before disputes escalate. Contact us today to schedule a consultation.