N.Y. General Business Law § 777-b: Exclusion or modification of warranties

§ 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.