The proper answer is… it all depends…followed by….consult a real estate attorney and seek advice in your case!
First, is the company still in business?
Second, if so, can you prove it was their fault?
Third, do they have the resources to correct the defect?
Fourth, do you have the resources to fight it?
Fifth, regardless if you win or lose, the lender still requires you to pay the loan – did you know that?
There have been many cases over the years where homeowners have sued developers, builders, banks, and others over defective construction (i.e. not in “good and workman-like manner” which has been defined as the way work is normally done by other contractors in the area/community) that they had no expertise, even the home inspector’s level of expertise to discover the defects.
The 2/10 Home Warranty (2 years for systems and 10 years for structures) normally will call for arbitration and not give the homeowner legal (i.e., court system) recourse for failure to properly install HVAC/Plumbing/Electrical systems and wall or foundation failure of the structure.
But what about the major subcontractors for the builder for grading the property or pouring the concrete foundation?
There was a recent case here in Georgia that the homeowners’ foundation cracked which was revealed to be caused for poor grading and compacting of the soil by a contractor and builder no longer in business. Oh, and the lender – they didn’t care it needed $25,000-50,000 repair, they still demanded the homeowner to pay on the loan…on the house that was basically uninhabitable…and if the homeowner was foreclosed on and lender had to swallow the loan – the homeowner will probably get an income tax bill on the uncovered loan amount.
A few examples in the past include:
(1) Improperly installed doors & windows resulting in mold;
(2) Incorrect installation of air conditioners resulting in mold;
(3) Incorrect grading and compacting of soil under the foundation of the home.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.