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Implied warranty in Texas real estate

| Oct 22, 2018 | Real Estate |

Prior to the 1960s, Texas was a state, which meant that it adhered to a “buyer beware” policy in real estate transactions. However, in 1968, the Supreme Court of Texas expressed its distaste of the caveat emptor doctrine when it comes to the sale and purchase of a home, stating that it did not placate the demands of justice.

According to the Journal of Texas Consumer Law, the court felt that it was unjust for the average homeowner — for whom the purchase of a home is the most important transaction of a lifetime — to be financially accountable for defects created or overlooked by experienced builders and sellers. In the caveat emptor doctrines’ place, the court instated the “implied warranty.” In the home construction industry, implied warranties come in one of two forms: the implied warranty of good and workmanlike construction and the implied warranty of habitability. Though sellers and builders may disclaim both types of warranties in instances, the courts will generally hold builders and sellers accountable for nuisances.

It is important to note that a deed or contract need not contain specific language regarding implied warranties for the two forms of warranties to apply. According to the Real Estate Center of Texas A & M University, almost every deed contains certain warranties. Every time a deed includes the term “grant” or “convey,” the seller makes specific promises, one of which is that the property is free from encumbrances. The implied warranties, however, are for the sole benefit of the buyer, and they are not attached to the land.