THE THEORY OF AN IMPLIED WARRANTY OF HABITABILITY FOR HOMES UNDER ARIZONA AND UTAH LAW
I. IMPLIED WARRANTY OF HABITABILITY FOR HOMES UNDER ARIZONA LAW
Early on Arizona, like most states, refused to apply the rule of implied warranties to the sale of real property.[1] However, following the post-World War II housing boom and the development of mass homebuilding,[2] courts nationwide began to extend implied warranties to the sale of new homes as buyers no longer stood on equal footing with homebuilders and had to rely upon them for their superior training and expertise.[3]
A. Adopting an Implied Warranty of Habitability
It was the landmark case of Columbia Western Corp. v. Vela which adopted an implied warranty of habitability as to new home construction in Arizona.[4] The Arizona Court of Appeals held that as to new home construction, that the builder-vendor impliedly warrants the construction was done in a workmanlike[5] manner and that the structure is habitable[6].[7] Although the court recognized previous cases had held the general rule was that implied warranties as to quality and condition do not apply to realty, it distinguished them as authority for the proposition that no implied warranties arise from the sale of realty, but is not dispositive of the issue of implied warranties arising out of the construction of new housing which ultimately becomes realty.[8] Thus, agreeing with policy reasons other courts gave in adopting implied warranties, such as homebuyers lacking the skill and training necessary to detect construction defects, the homebuyers inability to inspect all aspects of the structure and reliance on those in a better position to know the quality of the work to be sold, and the importance and expense of purchasing a home, an implied warranty of habitability for new homes was adopted in Arizona.[9]
Arizonas rule of implied warranties in new homes has since been affirmed and applied in many cases.[10] Some of these cases will be highlighted below to explain how implied warranties of habitability have been tailored and refined in Arizona since Columbia Western Corp. v. Vela adopted the theory back in 1979.
B. The Parties: Builder-Vendors and Immediate or Remote Purchasers
Various cases have gone on to clarify who qualifies as builder-vendor under an implied warranty claim and who escapes such liability. As indicated in Dillig v. Fisher, the sellers intent or purpose in constructing and selling a house is critical in determining whether the sale is subject to the implied warranty of habitability.[11] Additionally:
Courts have defined the builder-vendor as one who is engaged in the business of building, so that the sale is of a commercial nature, rather than a casual or personal one. This commercial requirement, however, does not demand that the builder-vendor have a long and extensive experience in the construction industry . . . It has been held that even a builder constructing his first house may be considered to be in the business of building if the primary reason for constructing the house was to sell it. Moreover, the sale of a house by its builder has been held to be a commercial sale even though the builder began construction for use by his own family, but in the course of construction decided to sell the house upon completion.[12]
Accordingly, Dillig went on to find the seller, a former general contractor who originally constructed this one and only home in Arizona for personal use but never actually occupied it after deciding to live elsewhere, liable under an implied warranty of habitability as a builder-vendor in the commercial sale of a house with a defective roof.[13] The court reasoned that because the completed structure was never occupied and was instead immediately placed on the market for sale, the implied warranty applied.[14]
However, in another case a rancher who also built a home with the intent to use it as a personal residence but had to sell it for health reasons was found not to be a builder-vendor for purposes of an implied warranty.[15] Although the facts in both cases seem similar, the court in Dryden v. Bell distinguished the earlier Dillig decision on the basis that the rancher was never engaged in the business of building (although he built labor houses on his farm and several houses for personal use), whereas the former general contractor had supervised the construction of approximately 40 homes in Ohio.[16] Thus, the ranchers initial intent in building the home for personal use was determinative, but it was not for the former general contractor with a history as a commercial builder.[17]
Additionally, Arizona courts have applied an implied warranty of habitability to homesite builders,[18] but not to sellers of raw land,[19] builders of commercial buildings,[20] or banks who do not do the construction but review and approve building plans and specifications for the protection of its security and not for the benefit of future buyers.[21]
Although a first purchaser can assert an implied warranty claim because there is privity of contract with the builder-vendor from whom they purchased the new home, the issue of whether an implied warranty extends to subsequent purchasers of used homes was first addressed in Richards v. Powercraft Homes, Inc.[22] In Richards, three of the plaintiffs bought repossessed homes from a third party organization and not directly from the homebuilder.[23] As a result, the Arizona Court of Appeals vacated the verdict rendered in favor of those plaintiffs for lack of privity.[24] However, the Arizona Supreme Court went on to find that privity is not required to maintain an action for breach of implied warranty of workmanship or habitability, and therefore reinstated the verdict with respect to the subsequent purchasers.[25] In doing so, Richards found that the same policy considerations that enabled an original purchaser to rely on a builder-vendors implied warranty, such as mass house-building, builders holding themselves out as skilled in the profession, modern construction being complex and homebuyers generally not skilled or knowledgeable in construction, equally applied to subsequent purchasers.[26] Moreover, the court indicated that with such an increasingly mobile society, homebuilders should anticipate their houses will eventually, and possibly frequently, change ownership.[27]
However, Richards was careful to note an implied warranty claim for subsequent purchasers (and presumably original purchasers) is limited to latent defects[28] which become manifest after the subsequent owners purchase and which were not discoverable had a reasonable inspection[29] of the structure been made prior to purchase.[30] Accordingly, if a patent defect is at issue or the purchaser failed to make a reasonable inspection before buying the home, an implied warranty of habitability is not applicable.
C. Proving Breach of an Implied Warranty of Habitability
The plaintiff purchaser does not have to show the defective home was unlivable because it did not keep out the elements or was not a safe place to live in.[31] Rather a purchaser only has the burden of proving the defect rendered the home not reasonably suited for its intended use,[32] and that that defect originated from and was caused by the builder-vendor.[33] A purchaser may be able to meet this burden by showing the builder failed to comply with applicable building codes or deviated from an architects approved plans and specifications.[34] Finally, the standard to be applied in determining whether or not there has been a breach of warranty is one of reasonableness in light of surrounding circumstances. The age of a home, its maintenance, the use to which it has been put, are but a few factors entering into this factual determination at trial.[35]
D. Defenses of an Implied Warranty of Habitability
As set forth in Richards, a homebuilder may defend against an implied warranty by showing the defects were patent, no reasonable inspection was made pre-purchase, the defects were not attributable to the builder, the defects were a result of age or ordinary wear and tear, or the previous owners made substantial changes.[36] A builder could also defend itself by proving the statute of limitations ran or the implied warranty expired.
The Arizona legislature recently enacted a statute of repose which states that:
[N]o action or arbitration based in contract may be instituted or maintained against a person who develops or develops and sells real property, or performs or furnishes the design, specifications, surveying, planning, supervision, testing, construction or observation of construction of an improvement to real property more than eight years after substantial completion of the improvement to real property.[37]
This statute of limitation specifically governs implied warranties of habitability, fitness or workmanship,[38] and can only be extended for an additional year, for a maximum of nine years, if the injury occurred during the eighth year or the latent defect was not discovered until the eighth year.[39] However this one-year extension into the ninth year is hard to come by, as the Arizona Court of Appeals held that knowledge of the prior owner is imputed to the current owner for purposes of 12-552.[40] Thus, if the prior owner discovered the latent defect before the eighth year, that knowledge is imputed to the subsequent owner who, even if he or she is still personally unaware of the defect, is barred from claiming discovery of the defect in the eighth year.
Although 12-552 provides a bright-line rule, it is a drastic departure from the previous statute of limitations,[41] which although limited an implied warranty of habitability to six years, provided an accrual period based upon discovery of the defect,[42] and not just the substantial completion of the home. Not surprisingly, the statute of repose has already received criticism, as it seems to contravene the spirit of the warranty and provides an incentive for homebuilders to use low quality components that would last eight years, but no more.[43] Nevertheless, should a purchaser try to sue for a breach of an implied warranty of habitability eight to nine years after the home was substantially completed, it will likely fail under the strict statute of respose set forth in 12-552.
The statute of limitations, or how long the purchaser has to sue, is a separate issue from how long the warranty is in effect.[44] According to Hershey v. Rich Rosen Constr. Co., the duration of an implied warranty is a factual determination that depends upon the life expectancy of the questioned component in a non-defective condition, but the fact finder need only decide whether liability is reasonable at the point of the breach under the particular facts and not the outside limits of that components life expectancy.[45] Thus, prior to filing suit, a buyer should determine if the warranty was even in effect at the time of the breach, so as to give rise to liability, because even if it is filed within the statute of limitations period, the action may fall prey to the warranty expiration.[46] Unfortunately, a lengthy warranty may be worthless as 12-552 caps implied warranties at eight to nine years after substantial completion of the home, regardless of the warrantys duration.
Lucky for homebuyers, however, Arizona has so far rejected the defense that an as is provision or disclaimer, often found in builders standard form contracts, expressly excludes any implied warranties. As held in Nastri v. Wood Bros. Homes, Inc., an attempt to disclaim an implied warranty of habitability is void as against public policy as to an innocent subsequent purchaser, because innocent purchasers should be protected and builders held accountable for their work.[47] It can be reasonably assumed that such a rule would also apply to the original purchasers as long as they are also innocent buyers.
E. Damages for an Implied Warranty of Habitability
Since an implied warranty of habitability sounds in contract, a purchaser who prevails on his or her claim can recover for the cost of remedying the defects,[48] as well as costs[49] and reasonable attorneys fees.[50] However, there is one exception: where the structure is so fundamentally flawed by the defect that repair would entail virtual destruction and reconstruction . . . a plaintiff receives the difference in value between the structure received and a comparable structure free of the defect.[51]
II. IMPLIED WARRANTY OF HABITABILITY FOR HOMES UNDER UTAH LAW
Unlike Arizona, Utah has refused to adopt an implied warranty of habitability with regard to the sale of real property,[52] whether it be new[53] or used.[54] Rather, Utah only recognizes an implied warranty of habitability in residential leases[55] and continues to apply the traditional doctrine of caveat emptor to sales of residential property.[56] The Utah Court of Appeals explained the policy reasons for differentiating between residential lessees and purchasers in Maack v. Res. Design & Constr., Inc.:[57]
The main policy reasons behind extending an implied warranty of habitability to residential leases are the unequal bargaining position of the parties and the prospective tenants limited ability to inspect and repair the property. These policy reasons are not present to the same degree in the purchase of residential property. The purchaser has the right to inspect the house before purchase as thoroughly as that individual desires, and to condition purchase of the house upon a satisfactory inspection report. Further, if there are particular concerns about a home, the parties can contract for an express written warranty from the seller. Finally, if there are material latent defects of which the seller was aware, the buyer may have a cause of action in fraud.[58]
Nevertheless, one Utah court specifically acknowledged that although the doctrine of caveat emptor applied at common law to the sale of real property and still appears to prevail in the sale of used residential and commercial property, it has eroded in the sale of new residential housing.[59] Thus, the remainder of the article discusses Utah cases which leave the door open to recognizing an implied warranty of habitability for residential property and provide some clues as to how such a cause of action would operate in Utah.
In Tibbitts v. Openshaw, the Tibbitts entered into a real estate contract with the Openshaws, wherein the Tibbitts agreed to sell two subdivision lots, each containing a new house constructed by Mr. Tibbitts, and an adjacent vacant parcel to the Openshaws for a purchase price of $45,000.[60] When the Openshaws failed to pay the remaining $4,400, the Tibbitts filed suit and the Openshaws counterclaimed for fraud and breach of implied warranties relating to the quality of the roofs and insulation of the homes, and the adaptability of the vacant parcel for subdivision purposes.[61] Specifically, the Openshaws alleged the Tibbitts, as builder-vendors, had impliedly warranted that (1) the homes were constructed in a good and workmanlike manner, reasonably fit for occupancy as a place of abode, with suitable and proper materials, and (2) that the homes were constructed in accordance with the local building codes.[62] The trial court dismissed the Openshaws implied warranties counterclaim at the close of evidence, indicating the question of a breach of warranty was moot for two reasons.[63] First, the Openshaws failed to complain of any breach within a reasonable time as they did not register a complaint for nearly three years after taking occupancy.[64] Secondly, an as is provision[65] in the contract was controlling because the Openshaws failed to prove by clear and convincing evidence that the as is provision was not the understanding of the parties at the time of contracting.[66] Although in affirming the trial courts dismissal the Utah Supreme Court did not expressly adopt or deny an implied warranty of habitability claim, it did acknowledge that there may be implied warranties when a person sells a house.[67] Moreover, Tibbitts makes clear that if implied warranties are found to exist, any claim of a breach thereto must be brought within a reasonable time and the underlying contract must be devoid of as is provisions, which may properly disclaim any such warranties.[68]
Similarly, in Fennell v. Green, the Utah Court of Appeals found the trial court did not err when it granted summary judgment for the real estate developer on the buyers breach of implied warranty claim based upon an exclusionary clause.[69] In addition to affirming that an implied warranty of habitability is not extended to purchasers of residential property, Fennell followed Tibbitts in holding the developer properly and expressly excluded any implied warranties in its purchase agreement with the buyer.[70]
In contrast to Arizona, it seems Utah would also deny subsequent purchasers, or purchasers of used homes, access to an implied warranty claim should one eventually be adopted.[71] As the court in Schafir v. Harrigan indicated, the doctrine of caveat emptor especially applies to the sale of a used home, because the purchaser is on notice that the residence is not new and may contain defects affecting the homes quality or condition.[72]
Finally, in determining whether an implied warranty even exists in a sale of real property, Utah State Med. Assn v. Utah State Employees Credit Union noted that both the intent of the parties and the importance of the defective item to the comfortable enjoyment of the premises should be analyzed.[73] In deciding whether the seller impliedly warranted the 13 year-old air-conditioning system in the commercial building it sold, the court looked to the parties intent and held that since the buyer knew the building and air-conditioning system were used, it could be reasonably assumed that the repairs and replacements intended under the contract terms were only those required to maintain the building and air-conditioning system in an operational condition for a building and system of like age and usage, and not to completely renovate the building.[74]
In sum, Utah courts, compared to Arizona courts, appear to be very pro-builder. Even if Utah eventually recognizes a cause of action for breach of an implied warranty of habitability with regard to residential property, homebuilders will be able to easily exclude such implied warranties by inserting as is provisions or disclaimers, like those found in Tibbetts and Fennell, in their standard form contracts. Moreover, it is likely Utah will limit those who may rely on an implied warranty to original purchasers and exclude subsequent purchasers. Nonetheless, Smith v. Frandsen provides some hope for homebuyers in the future, as it acknowledged that whether the builder be large or small, the purchaser relies upon his superior knowledge and skill, and he impliedly represents that he is qualified to erect a habitable dwelling.[75] For now in Utah, however, in the case of latent defects, a home buyers best resort against the seller is to sue for either fraudulent or negligent misrepresentation or nondisclosure.[76]
[1] Allen v. Reichert, 237 P.2d 818, 819-20 (Ariz. 1951); Voight v. Ott, 341 P.2d 923, 925 (Ariz. 1959).
[2] Leonard L. Stewart, Implied Warranties in the Sale of New Houses, 26 U. Pitt. L. Rev. 862, 862 (1964).
[3] See W. Durrell Nielsen II, Caveat Emptor in Sales of Real Property Time for a Reappraisal, 10 Ariz. L. Rev. 484 (1986) (discussing the early cases which either repudiated or circumvented the doctrine of caveat emptor and began to apply some form of an implied warranty of habitability to the sale of new houses).
[4] Columbia Western Corp. v. Vela, 592 P.2d 1294, 1299 (Ariz. Ct. App. 1979).
[5] As later defined by J.W. Hancock Enterprises, Inc. v. Registrar of Contractors, 617 P.2d 19, 22 (Ariz. 1980) (quoting Brown v. Eakins, 348 P.2d 1116, 1117 (Or. 1960)), a workmanlike manner means doing the work in an ordinarily skilled manner as a skilled workman should do it.
[6] Just because a structure is capable of being inhabited does not qualify it as habitable under the implied warranty doctrine; rather, the home must be reasonably suited for its intended use. Nastri v. Wood Bros. Homes, Inc., 690 P.2d 158, 163 (Ariz. Ct. App. 1984).
[7]Columbia Western Corp., 592 P.2d at 1299.
[8] Id. at 1296.
[9] Id. at 1298-99.
[10] See e.g., Richards v. Powercraft Homes, Inc., 678 P.2d 427 (Ariz. 1984); Woodward v. Chirco Constr. Co., Inc., 687 P.2d 1275 (Ariz. Ct. App. 1984).
[11] Dillig v. Fisher, 688 P.2d 693, 695 (Ariz. Ct. App. 1984).
[12] Id. at 695-96.
[13] Id.
[14] Id. at 696.
[15] Dryden v. Bell, 761 P.2d 1068, 1070-71 (Ariz. Ct. App. 1988).
[16] Id.
[17] Id.
[18] Buchanan v. Scottsdale Envt Constr. and Dev. Co., Inc., 787 P.2d 1081, 1082 (Ariz. Ct. App. 1989).
[19] Formento v. Encanto Bus. Park, 744 P.2d 22, 28 (Ariz. Ct. App. 1987).
[20] Hayden Bus. Ctr. Condo. Assn v. Pegasus Dev. Corp., 105 P.3d 157, 159-60 (Ariz. Ct. App. 2005).
[21] Smith v. Contl Bank, 636 P.2d 98, 100 (Ariz. 1981).
[22] Richards v. Powercraft Homes, Inc., 678 P.2d 427, 429 (Ariz. 1984).
[23] Id. at 428.
[24] Id. at 429.
[25] Id. at 430.
[26] Id.
[27] Id.
[28] A latent defect is a hidden or concealed defect that could not be discovered by reasonable and customary observation or inspection. Maycock v. Asilomar Dev., Inc., 88 P.3d 565, 568 (Ariz. Ct. App. 2004).
[29] An implied warranty should be voided for lack of a reasonable inspection only if the defect could have been discovered during an inspection made by the average purchaser, not an expert. Hershey v. Rich Rosen Constr. Co., 817 P.2d 55, 59 (Ariz. Ct. App. 1991).
[30] Richards, 678 P.2d at 430.
[31] Nastri v. Wood Bros. Homes, Inc., 690 P.2d 158, 162-63 (Ariz. Ct. App. 1984).
[32] Id. at 163.
[33] Richards, 678 P.2d at 430.
[34] Rob Ellman & E.J. Peskind, Building Houses and Building Cases: The Implied Warranty of Workmanlike Construction and Habitability, 32 Arizona Attorney 25, 28 (1996).
[35] Richards, 678 P.2d at 430.
[36] Id.
[37] Ariz. Rev. Stat. Ann. 12-552(A).
[38] 12-552(C).
[39] 12-552(B).
[40] Maycock v. Asilomar Dev., Inc., 88 P.3d 565, 570 (Ariz. Ct. App. 2004).
[41] Prior to 1992, the statute of limitations for an implied warranty of habitability was six years, pursuant to Ariz. Rev. Stat. Ann. 12-548, because the warranty was implied in a written contract. Woodward v. Chirco Constr. Co., Inc., 687 P.2d 1275, 1278 (Ariz. Ct. App. 1984).
[42] Matusik v. Dorn, 756 P.2d 346, 348 (Ariz. Ct. App. 1988) (applying the discovery rule to a cause of action for breaching an implied warrant of habitability so that it does not accrue until the plaintiff knew, or in the exercise of reasonable diligence, should have known of the injury).
[43] Mike Bischoff, Theories of Toxic Mold Liability Facing Arizona Homebuilders, 34 Ariz. St. L.J. 681, 694 (2002).
[44] Hershey v. Rich Rosen Constr. Co., 817 P.2d 55, 60 n.1 (Ariz. Ct. App. 1991).
[45] Id. at 61. Hershey went on to find that 12 years was not an unreasonable period for an implied warranty of habitability to exist with respect to defective stucco because a stucco exterior has a normal life expectancy in the Arizona desert of 30 to 50 years. Id.
[46] Id. at 60. See e.g., Sheibels v. Estes Homes, 778 P.2d 1299, 1302 (Ariz. Ct. App. 1989) (dismissing an implied warranty claim for termite damage brought 14 years after the home was constructed and four years after the plaintiff purchasers bought it, because it was unreasonable to extend the builders implied warranty for termite protection beyond the five years intended as the maximum protection period).
[47] Nastri v. Wood Bros. Homes, Inc., 690 P.2d 158, 161-62 (Ariz. Ct. App. 1984). The builder-vendor in Nastri provided certain limited warranties for 2 years but tried to disclaimed all other warranties by stating: NO OTHER WARRANTIES, EXPRESS OR IMPLIED, ARE GIVEN, INCLUDING, BUT NOT LIMITED TO, A WARRANTY OF FITNESS FOR HABITATION, QUALITY OR CONDITIONS, EXCEPT AS EXPRESSLY GIVEN HEREIN. Id. at 160.
[48] Woodward v. Chirco Constr. Co., Inc., 687 P.2d 1269, 1271 (Ariz. 1984) (holding the purchaser of a home can seek to recover in contract for defects in the structure itself as such defects render the home less than the purchaser bargained for).
[49] Ariz. Rev. Stat. Ann. 12-341 (2006): The successful party to a civil action shall recover from his adversary all costs expended or incurred therein unless otherwise provided by law.
[50] Ariz. Rev. Stat. Ann. 12-341.01 (2006): In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees.
[51] Ellman & Peskind, supra note 34, at 28 (citing Blecick v. School District No. 18 of Cochise County, 406 P.2d 750 (1965)).
[52] See generally Sam Meziani, Implied Warranty of Habitability A Growing Trend in the Intermountain West, Intermountain Contractor, June 1, 2006, at 80 (explaining an implied warranty of habitability on the construction of new homes is currently absent in Utah, but Utah builders should familiarize themselves with the subject as there is a growing nationwide trend to impose such a warranty on homebuilders, which includes Utahs neighboring states of Wyoming, Nevada, and Idaho).
[53] See Am. Towers Owners Assn v. CCI Mech., Inc., 930 P.2d 1182, 1193-94 (Utah 1996) (refusing to extend the theory of implied warranty of habitability from lessees to condominium purchasers who experienced faulty plumbing and mechanical systems, because condominium buyers, unlike lessees, have more of an opportunity to negotiate a contract and additional incentive and means to inspect the unit before purchase); Snow Flower Homeowners Assn v. Snow Flower, Ltd., 2001 UT App 207, 30, 31 P.3d 576 (dismissing original and subsequent condominium owners claims for breach of implied warranties because Utah does not recognize such a claim in the context of purchasers of residential property and they could have bargained for an express warranty to cover any original construction defects); Fennell v. Green, 2003 UT App 291, 16, 18, 77 P.3d 339 (affirming trial courts summary judgment against buyers implied warranty of habitability claim stemming from a landslide allegedly caused by poor soil preparation).
[54] See Utah State Med. Assn v. Utah State Employees Credit Union, 655 P.2d 643 (Utah 1982) (applying the doctrine of caveat emptor to the sale of a used commercial building with a defective air-conditioning system); Maack v. Res. Design & Constr., Inc., 875 P.2d 570, 583 (Utah Ct. App. 1994) (denying a subsequent purchasers claim for breach of implied warranty of habitability related to defective stucco which allegedly caused water leakage because even if Utah recognized such a claim, the purchaser failed to conduct the requisite reasonable inspection prior to purchase); Schafir v. Harrigan, 879 P.2d 1384, 1389 (Utah Ct. App. 1994) (dismissing an implied warranty of habitability claim where shortly after buying a used home the remote purchasers discovered numerous design and construction defects because caveat emptor applies to the sale of used residences).
[55] See Wade v. Jobe, 818 P.2d 1006 (Utah 1991) (adopting an implied warranty of habitability for residential leases).
[56] Schafir, 879 P.2d at 1388-89 (noting Utahs general rule is that the doctrine of caveat emptor applies to the sale of real estate because the purchaser has a reasonable opportunity to inspect the premises).
[57] Maack, 875 P.2d at 583.
[58] Id. at 582-83.
[59] Utah State Med. Assn, 655 P.2d at 645.
[60] Tibbitts v. Openshaw, 425 P.2d 160, 161 (Utah 1967).
[61] Id.
[62] Id.
[63] Id. at 161-62.
[64] Id. at 161.
[65] The real estate contract contained the following as is provision: It is hereby expressly understood and agreed by the parties hereto that the Buyer accepts the property in its present condition and that there are no representations, covenants or agreements between the parties hereto with reference to said property except as herein specifically set forth or attached hereto. Id.
[66] Id. at 161-62.
[67] Id.
[68] Id. See also Utah Code Ann. 70A-2-316(3)(a) (2006): [U]nless the circumstances indicate otherwise, all implied warranties are excluded by expressions like as is, with all faults or other language which in common understanding calls the buyers attention to the exclusion of warranties and makes plain that there is no implied warranty.
[69] Fennell v. Green, 2003 UT App 291, 18, 77 P.3d 339.
[70] Id. The Real Estate Purchase Contract specifically provided that: Except for the [IVORY NORTH] WARRANTY and SELLERs obligation to repair or replace WALK-THROUGH ITEMS: (a) SELLER conveys the PROPERTY to BUYER, AS IS, WHERE IS, WITHOUT REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, HABITABILITY OR WORKMANSHIP; (b) SELLER makes no representations or warranties to BUYER . . . regarding the environmental condition of the PROPERTY (including the presence or freedom from radon, hazardous waste or hazardous materials); (c) SELLER expressly disclaims any other representations or warranties regarding the PROPERTY; (d) BUYER accepts the PROPERTY in the condition in which the PROPERTY exists on the CLOSING DATE . . . . Id.
[71] See generally Utah State Med. Assn v. Utah State Employees Credit Union, 655 P.2d 643 (Utah 1982); Maack v. Res. Design & Constr., Inc., 875 P.2d 570, 583 (Utah Ct. App. 1994); Schafir v. Harrigan, 879 P.2d 1384, 1389 (Utah Ct. App. 1994); but see Smith v. Frandsen, 2004 UT 55, 25, 26, 94 P.3d 919 (holding subsequent purchasers should be able to state a claim for negligence against a builder because they typically possess no great sophistication that would enable them to discover latent defects in property than original purchasers, but not a subsequent purchaser who is not similarly situated but rather possesses some unique insight or information).
[72] Schafir, 879 P.2d at 1389 n.12.
[73] Utah State Med. Assn, 655 P.2d at 646.
[74] Id.
[75] Smith, 2004 UT 55, 18 (quoting McDonald v. Mianecki, 398 A.2d 1283, 1292 (N.J. 1979); see also Meziani, supra note 52, at 80.
[76] Schafir, 879 P.2d at 1389 n.12.