Kentucky State Guide
Kentucky New Home
Implied Warranty Rights
A complete reference for original buyers of newly built homes in the Commonwealth of Kentucky.
This document is a general reference. It is not legal advice and does not create an attorney client relationship. Before taking action, consult a licensed Kentucky attorney.
Download the Complete Document Package
- Legal Warranty Reference — Kentucky implied warranty law, case law, statutes, and remedies
- Builder Defect Walkthrough Intake Form — room by room checklist for documenting every defect
Executive Summary
- Kentucky imposes a common law implied warranty on every newly built home sold by a builder vendor to the original buyer. No written warranty is required for the implied warranty to apply (Crawley v. Terhune, 437 S.W.2d 743 (Ky. 1969)).
- A homeowner generally has 5 years from breach (or discovery, for latent defects) to file suit, capped by a 7 year statute of repose running from substantial completion (KRS 413.120; KRS 413.135).
- Before filing suit, the homeowner must give the builder written notice and a 21 day opportunity to respond under the Kentucky Notice and Opportunity to Repair Act, KRS 411.250–411.266.
- Reputable demand letters are sent by certified mail, return receipt requested, and reference the implied warranty and the Right to Cure statute by name.
Foundational Case Law
Crawley v. Terhune, 437 S.W.2d 743 (Ky. 1969)
Kentucky's seminal new home warranty case. The Terhunes bought a newly built house from Crawley, the builder-owner; rainwater leaked into the basement. The court carved out an exception to caveat emptor and held that “in the sale of a new dwelling by the builder there is an implied warranty that in its major structural features the dwelling was constructed in a workmanlike manner and using suitable materials.”
Real Estate Marketing, Inc. v. Franz, 885 S.W.2d 921 (Ky. 1994)
Extended the Crawley warranty to subsequent purchasers for latent defects, holding lack of privity does not bar suit against the original builder.
Miller v. Hutson, 281 S.W.3d 791 (Ky. 2009)
Extended Crawley to developer vendors who hired the actual builder, holding the developer is a “warrantor.” Confirms the warranty travels with the new home transaction itself, not the seller's job title.
Pippin v. Owensboro Master Builder, Inc. (Ky. Ct. App. 2018) — unpublished
A recent disclaimer-fight illustration: buyers contested a preprinted limited warranty purporting to disclaim implied warranties. Illustrative only; not citable as binding precedent.
Scope of the Warranty
What the implied warranty covers:
- Major structural features (foundation, framing, roof system)
- Workmanlike construction and suitable materials
- Fitness for habitation (water intrusion, code defective work)
- Latent defects not discoverable on reasonable inspection at closing
- Major mechanical systems (HVAC, plumbing, electrical) where the defect is latent and goes to habitability or structural integrity
What the implied warranty does not cover:
- Cosmetic items, ordinary wear and tear
- Owner- or third party caused damage
- Conditions the buyer knew about and accepted at closing
Disclaimer, Waiver, and “As Is”
Silence by the builder (no written warranty) does not defeat the implied warranty. There is nothing to disclaim — the implied warranty is the default.
Express disclaimers are scrutinized for clarity and conspicuousness. Boilerplate “as is” language buried in a preprinted form is vulnerable.
No published Kentucky Supreme Court opinion squarely holds the implied warranty fully unwaivable, but courts are protective of new home buyers.
Remedies
- Cost of repair — dominant measure when repair is feasible
- Diminution in fair market value — alternative measure
- Consequential damages — temporary housing, damaged personal property
- Incidental damages — out of pocket costs addressing the breach
- Attorney's fees — not recoverable under common law implied warranty alone (Kentucky follows the American Rule). Fees become available only under a fee shifting statute or contract clause.
Statute of Limitations: 5 Years
KRS 413.120(1) applies a five year limitations period to “an action upon a contract not in writing, express or implied,” which is the period practitioners apply to implied warranty claims against builders.
Accrual: Breach vs. Discovery
General rule: a contract action accrues on breach. The Kentucky Supreme Court in Fluke Corp. v. LeMaster, 306 S.W.3d 55 (Ky. 2010) reaffirmed the discovery rule applies narrowly to latent defects — those “not immediately evident or discoverable with the exercise of reasonable diligence.” Patent / obvious defects accrue at substantial completion or closing; latent defects accrue at discovery.
Practical Posture
- Treat the closing date as the conservative trigger.
- Treat the discovery date as the outer trigger.
- Do not rely on the discovery rule unless the defect is genuinely hidden.
Statute of Repose: 7 Years
KRS 413.135 imposes a 7 year statute of repose running from substantial completion of the improvement. If the injury occurs in the 7th year, suit may be brought up to 8 years out. The statute applies to claims “whether based upon contract or sounding in tort” arising from deficiency in design, planning, supervision, inspection, or construction.
Constitutional Caveat
The earlier 5 year version was struck down in Tabler v. Wallace, and a 1986 amendment was invalidated. The current 7 year version has not been squarely overturned but its constitutionality remains questioned. A licensed Kentucky attorney should verify the current status before relying on this provision.
Kentucky's Notice and Opportunity to Repair Act (“NORA”) is codified at KRS 411.250–411.266 and is mandatory for residential construction defect claims. Skipping it can get a lawsuit stayed or dismissed.
Key Mechanics
| Step | What Happens |
|---|---|
| Homeowner serves notice | Written notice describing each alleged defect in reasonable detail, served on the construction professional. |
| Builder's response window | 21 days after service to respond in writing (by registered mail or personal service). |
| Builder's options | (a) Offer to inspect, (b) offer to settle without inspection, or (c) dispute the claim. |
| Homeowner's response | 30 days to accept or reject any inspection or settlement proposal. |
| Tolling | Statute of limitations and repose are tolled during the notice-and-cure process. |
| Consequence of skipping | Court will stay or dismiss the action until the process is followed. |
Practical Drafting Note
Even though the statute requires registered mail for the builder's response, the homeowner's initial notice should go by certified mail, return receipt requested — it creates undisputable proof of receipt and starts the 21 day clock cleanly.
A compliant pre suit demand letter should contain:
- Homeowner's full legal name(s) and the property address
- Date of closing and date of substantial completion
- Identification of the builder, contractor, and any known subcontractors
- A reasonably detailed description of each defect, with location, nature, and observed symptoms
- Express reference to KRS 411.250–411.266 and explicit invocation of the 21 day response period
- A proposed inspection access protocol and reasonable dates
- Statement of the remedy sought (repair, replacement, monetary settlement)
- Reservation of rights, including the implied warranty under Crawley v. Terhune
- Signature and certified mail tracking number
- Attached evidence appendix — photo log, defect schedule, communications log, any inspection reports
Evidence Preservation Checklist
- Dated, geotagged photographs and video of every defect, including progression over time
- Written log of communications with the builder (date, channel, content, who)
- Retain all closing documents, plans, specs, change orders, punch lists, marketing materials
- Obtain an independent third party inspection report
- Preserve physical evidence in place where feasible; if mitigation requires removal, photograph extensively first
- Notify the builder in writing before any destructive testing or repair
- Keep receipts for any mitigation or repair expenses
- Maintain a single chronological case file (paper plus digital backup)
Use these regulatory and consumer channels in parallel with the attorney/demand letter track — not in place of it.
Kentucky Attorney General — Office of Consumer Protection
Files a consumer complaint and runs voluntary mediation under the Kentucky Consumer Protection Act (KRS 367.110 et seq.).
- Online intake: secure.kentucky.gov/formservices/AttorneyGeneral/ConsumerMediationForm
- Mail: Office of Consumer Protection, 1024 Capital Center Drive, Suite 200, Frankfort, KY 40601
- Phone: (502) 696-5389 | Hotline: (888) 432-9257
Cannot force repair or award damages; a pattern of complaints can trigger a broader investigation.
Department of Housing, Buildings & Construction (DHBC)
Kentucky does not license general contractors or residential home builders at the state level. Local cities and counties may register builders separately.
DHBC does license HVAC, plumbing, electrical, boiler, fire sprinkler/alarm trades.
- HVAC: dhbc.ky.gov/newstatic_Info.aspx?static_ID=368 | hvac@ky.gov | (502) 573-0395
- Plumbing: Division of Plumbing, 101 Sea Hero Rd. Ste. 101, Frankfort, KY 40601
Result: inspector investigation, possible discipline, and an official finding usable as evidence.
Local Building Inspector / County Code Enforcement
- Contact the city or county building department that pulled the original permit.
- Request a reinspection or code violation investigation.
- Only addresses code violations — not cosmetic defects or warranty breaches.
Better Business Bureau
- File at bbb.org/file-a-complaint. Builder asked to respond within 14 days.
- Not a regulator — useful for public facing pressure and paper trail.
Home Builders Association / Local HBA
- Local affiliates may run conciliation/arbitration for member builders.
- Eligibility limits are common: filings must occur within one year of closing and the builder must be a current member.
Small Claims and Civil Courts
- Small Claims (KRS 24A.230): jurisdictional cap $2,500.
- District Court (KRS 24A.120): civil jurisdiction up to $20,000.
- Circuit Court: exclusive jurisdiction above $20,000. Most construction defect cases land here.
- Venue: circuit court of the county where the property sits or where the builder resides/does business.
| When | Action |
|---|---|
| Day 0 | Walk the home and complete a defect intake form. Take dated photos and video. |
| Day 0–7 | Obtain an independent third party inspection. File a reinspection request with local building official. |
| Day 7–10 | If trades are involved, file a DHBC complaint. File AG Consumer Protection and BBB complaints in parallel. |
| Day 10–14 | Engage Kentucky counsel. Attorney sends KRS 411.260 demand letter by certified mail. |
| Day 14–35 | Builder's 21 day response window runs. Limitations tolled during this period. |
| Day 35+ | If acceptable repair offered, monitor and document. If denied or no response, attorney evaluates suit in Circuit Court. |
Download the Complete Document Package
- Legal Warranty Reference — Kentucky implied warranty law, case law, statutes, and remedies
- Builder Defect Walkthrough Intake Form — room by room checklist for documenting every defect
Dealing With a
Construction Defect?
If you are a homeowner in Central Kentucky dealing with builder defects or considering purchasing a home that needs structural evaluation, Toni Schafer brings both Realtor expertise and General Contractor knowledge to help you understand what you are looking at and what your options are.