Appellate panel: Pevious homeowner's waiver of habitability warranty may not apply in patio collapse case

A state appellate panel has weighed in as to what "as is" entails in the purchase of a house, determining a man whose patio collapsed may be able to sue a builder, despite the decision by the home’s previous owner to waive the home’s builder’s warranty the house, including the patio, were safe and free of latent defects.

In May 2007, Beth Lubeck bought a house in Glenview with a six-foot high, 1,000-square-foot patio that sloped downward from the rear of the house and was supported by a retaining wall. She paid $1.7 milllion for the house, which had been built two years before by Masterklad, Inc. Mirek Bim was the president and owner of Masterklad.

In buying the house, Lubeck waived the implied warranty of habitability — such a warranty says the seller promises the house is suitable for living. In May 2010, Lubeck sold the home "as is" to John Fattah for $1.1 million. Fattah later said he did not know, when he bought the property, of Lubeck's waiver of warranty of habitability.

In February 2011, the patio collapsed, with Fattah taking Masterklad to Cook County Circuit Court the following July, arguing the patio's collapse "significantly impaired" the residents' "enjoyment of the property." Masterklad voluntarily dissolved three days after Fattah filed his complaint.

Fattah was represented in proceedings by Voelker Litigation Group and Bim represented himself.

During a bench trial, Masterklad argued Lubeck's waiver was binding on Fattah, because Fattah bought the home "as is." Fattah countered he was not bound by the waiver, because he had not been aware of it.

On Dec. 9, 2013, Associate Judge Sanjay T. Tailor ruled against Fattah, pointing out the waiver agreement provided that the waiver was to be binding upon any successive buyers, such as Fattah, and Fattah had bought the property "as is."

Fattah appealed, and on May 1, in an opinion authored by Illinois First District Appellate Court Justice Stuart E. Palmer, the appellate court decided the waiver did not apply to Fattah, because he was not a party to the waiver agreement and the "as is" rider was between Fattah and Lubeck, not Fattah and Masterklad. Further, because Fattah was unaware of the waiver, his agreement to buy the house “as is” could not have included the waiver, they said.

Justices Margaret Stanton McBride and Jesse Reyes concurred in the opinion, which noted the question was one the state’s courts had not previously considered.

“(Fattah) was not a party to the waiver agreement and testified at trial that he was unaware of Lubeck’s waiver of the implied warranty of habitability at the time he purchased the house,” the justices wrote. “Defendants did not refute this testimony. Therefore, as plaintiff was not a party to the waiver agreement between Lubeck and Masterklad, and defendants failed to prove plaintiff knowingly agreed to accept Lubeck’s waiver of the implied warranty, there is no basis for finding Lubeck’s waiver binding on (Fattah.)”

However, the justices did not address other issues raised by Fattah. At trial,  the circuit judge had determined there were “latent defects” in the patio that stemmed from construction, but did not decide whether the defects interfered with the use of the house and whether they manifested themselves in a reasonable time after Fattah's purchase, as Fattah claimed.

The Appellate Court said those two issues are for the trial court to decide, remanding the case for further proceedings.