ยง 777-b. Exclusion or modification of warranties. 1. Except in the
case of a housing merchant implied warranty, the builder or seller of a
new home may exclude or modify all warranties by any clear and
conspicuous terms contained in the written contract or agreement of sale
which call the buyer's attention to the exclusion or modification of
warranties and make the exclusion or modification plain.
2. Except in the case of a housing merchant implied warranty, the
builder or seller of a new home may exclude or modify warranties with
respect to particular defects by any clear and conspicuous terms
contained in the written contract or agreement of sale which identify
such defects, call the buyer's attention to the exclusion or
modification of warranties and make the exclusion or modification plain.
3. A housing merchant implied warranty may be excluded or modified by
the builder or seller of a new home only if the buyer is offered a
limited warranty in accordance with the provisions of this subdivision.
a. A copy of the express terms of the limited warranty shall be
provided in writing to the buyer for examination prior to the time of
the buyer's execution of the contract or agreement to purchase the home.
b. A copy of the express terms of the limited warranty shall be
included in, or annexed to and incorporated in, the contract or
agreement.
c. The language of the contract or agreement for sale of the home must
conspicuously mention the housing merchant implied warranty and provide
that the limited warranty excludes or modifies the implied warranty.
Language to exclude all implied warranties is sufficient if it states,
for example, that "There are no warranties which extend beyond the face
hereof."
d. The limited warranty shall meet or exceed the standards provided in
subdivisions four and five of this section.
4. A limited warranty sufficient to exclude or modify a housing
merchant implied warranty must be written in plain English and must
clearly disclose:
a. that the warranty is a limited warranty which limits implied
warranties on the sale of the home; the words "limited warranty" must be
clearly and conspicuously captioned at the beginning of the warranty
document;
b. the identification of the names and addresses of all warrantors;
c. the identification of the party or parties to whom the warranty is
extended and whether it is extended to subsequent owners; the limited
warranty must be extended to the first owner of the home and survive the
passing of title but may exclude any or all subsequent owners;
d. a statement of the products or parts covered by the limited
warranty;
e. the clear and conspicuous identification of any parts or portions
of the home or premises that are excepted or excluded from warranty
coverage, and the standards that will be used to determine whether a
defect has occurred; provided, however, that:
i. any exception, exclusion or standard which does not meet or exceed
a relevant specific standard of the applicable building code, or in the
absence of such relevant specific standard a locally accepted building
practice, shall be void as contrary to public policy and shall be deemed
to establish the applicable building code standard or locally accepted
building practice as the warranty standard; and
ii. any exception, exclusion or standard that fails to ensure that the
home is habitable, by permitting conditions to exist which render the
home unsafe, shall be void as contrary to public policy.
f. what the builder and any other warrantor will do when a defect
covered by the warranty does arise, and the time within which the
builder and any other warrantor will act;
g. the term of the warranty coverage and when the term begins,
provided, however, that such term shall be equal to or exceed the
warranty periods of a housing merchant implied warranty, as defined in
subdivision one of section seven hundred seventy-seven-a of this
article;
h. step-by-step claims procedures required to be undertaken by the
owner, if any, including directions for notification of the builder and
any other warrantor; an owner shall not be required to submit to binding
arbitration or to pay any fee or charge for participation in nonbinding
arbitration or any mediation process;
i. any limitations on or exclusions of consequential or incidental
damages, and any limitations on the builder's and other warrantor's
total liability, conspicuously expressed on the first page of the
warranty. Notwithstanding the foregoing, a limited warranty shall not be
construed to permit any limitation on or exclusion of property damage to
the home proximately caused by a breach of the limited warranty, where
the court finds that such limitation or exclusion would cause the
limited warranty to fail of its essential purpose, except that such
property damage may be limited by an express limitation on the builder's
or other warrantor's total liability in accordance with the provisions
of this paragraph.
5. a. This article shall not be construed to authorize or validate any
covenant, promise, agreement or understanding which is void and
unenforceable under section 5-322.1 of the general obligations law.
b. This article shall preempt any local law inconsistent with the
provisions of this article. This article shall not preempt any builder
subject to its provisions from complying with any local law with respect
to the regulation of home builders except as expressly provided herein.
c. Nothing in this article shall be construed to repeal, invalidate,
supersede or restrict any right, liability or remedy provided by any
other statute of the state, except where such construction would, as a
matter of law, be unreasonable.