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Final Inspection of a New Home

When a buyer purchases a new home or condominium directly from a builder the pre-occupancy inspection is usually a formal process involving a representative of the builder and the preparation and signature of a form identifying deficiencies.

In the case of properties insured under the New Home Warranty Program this form is critical both to the buyer and seller and to any warranty claim later. In cases where the builder is not a member of the program, whatever form or process is used, the inspection is often the last opportunity buyers have to meet with their builder and identify problems before the final release of monies to the builder. The opportunity should not be missed to pinpoint any detail of construction that does not meet with your expectations of quality. As well all appliances, fixtures and up-grades should be tested. Holdbacks, where lawyers agree to withold a portion of the sale price pending the resolution of a defect, are rarely permitted in the purchase of new homes from builders.

A convention has emerged among builders and their lawyers that with new home sales the buyer must first authorize his or her lawyer to release the purchase monies or keys will not be released. The implications of the release of monies are obvious if the home is otherwise deficient. As an example, if the water heater was not yet installed on the intended possession date , a buyer would still have to release money to get occupancy.

Recourse against the builder or installer for a defect when installation is eventually completed may be limited once the house is paid for. In new home purchases it is therefore imperative for buyers to communicate with their builders and lawyer about possession date changes, deficiencies and any delays before the moving van is booked, and to be very careful about what kind of warranty coverage their builder is providing them.

Any questions regarding this or any other issue please contact us.