House v. Thornton
457 P.2d 199, 76 Wash.2d 428, 1969 Wash. LEXIS 667 (1969)
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Rule of Law:
When a vendor-builder sells a new house to its first intended occupant, there is an implied warranty that the foundations are firm and secure and that the house is structurally safe for the buyer's intended purpose of habitation.
Facts:
- Defendant Headley, a real-estate broker, purchased lot 9, knowing that a previous house had been removed from the site due to earth instability caused by drainage issues.
- Headley was informed that the prior instability was due to now-disconnected septic tanks and poor construction of the old foundation, and he believed the lot was now stable.
- Headley partnered with builder Ray Thornton to construct a new residence on lot 9.
- In August 1964, plaintiffs Homer and Noreen House inspected the nearly completed house, noting some erosion in the yard, and purchased it the following month.
- Several months after moving in, the Houses observed a large crack opening in the yard parallel to the house.
- Over the next year, the house suffered severe structural failure: the basement wall and steps separated, the chimney pulled away from the house, the basement floor dropped and cracked, and large cracks appeared throughout the interior walls.
- The ongoing slippage and cracking eventually rendered the house untenable and unfit for occupancy.
Procedural Posture:
- Homer and Noreen House sued defendants Headley and Thornton in trial court, seeking rescission of the real estate sale based on claims of fraud and misrepresentation.
- The trial court granted rescission for the Houses but explicitly found that they had failed to prove fraud by clear, cogent, and convincing evidence.
- The trial court based its ruling on the defendants' failure to disclose their knowledge of the lot's prior history of soil instability.
- The defendant sellers appealed the trial court's judgment to the state's highest court.
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Issue:
Does a vendor-builder of a new house impliedly warrant to the first purchaser that the foundation is firm and secure and the house is structurally safe for occupancy, even in the absence of fraud or misrepresentation?
Opinions:
Majority - Hale, J.
Yes. When a vendor-builder sells a new house to its first occupant, they impliedly warrant that the foundations are firm and the house is structurally safe for its intended purpose. The court abandoned the traditional doctrine of caveat emptor ('let the buyer beware') for the sale of new homes. The court reasoned that nothing is more vital to a dwelling than its foundation, and when it fails to the point where a reasonable person would find the house unsafe, it is no longer fit for its purpose. As between the innocent purchaser and the vendor-builder, the vendor-builder is in a far superior position to examine the building site's stability and ensure proper construction. Therefore, even without fraud or negligence, the builder who made the harm possible bears the responsibility when a new house proves to be uninhabitable due to latent structural defects.
Analysis:
This decision marks a significant shift in property law, abandoning the traditional rule of caveat emptor for the sale of new homes by vendor-builders. It establishes a new cause of action for purchasers based on a breach of an implied warranty of fitness, which does not require proving fraud or negligence. This lowers the evidentiary burden on homebuyers and places the risk of latent, undiscovered defects on the professional builder, who is better positioned to prevent or absorb the loss. The ruling aligns the jurisdiction with a growing national trend toward greater consumer protection in real estate transactions involving new construction.
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