HB5454 104TH GENERAL ASSEMBLY

LRB104 19699 JRC 33148 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5454

Introduced 2/13/2026, by Rep. Dagmara Avelar

SYNOPSIS AS INTRODUCED:

New Act

Amends the Consumer Protection New Construction Residential Housing Act. Provides that a housing merchant implied warranty is implied in the contract or agreement for the sale of a new home and shall survive the passing of title. A housing merchant implied warranty shall mean that: (1) one year from and after the warranty date the home will be free from defects due to a failure to have been constructed in a skillful manner; (2) two years from and after the warranty date the plumbing, electrical, heating, cooling, and ventilation systems of the home will be free from defects due to a failure by the builder to have installed the systems in a skillful manner; and (3) six years from and after the warranty date the home will be free from material defects. Provides for the exclusion or modification of warranties. Preempts home rule.

A BILL FOR

AN ACT concerning civil law.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title.This Act may be cited as the Consumer Protection New Construction Residential Housing Act.

Section 5. Definitions. As used in this Act:

"Builder" means any person, corporation, partnership, or other entity contracting with an owner for the construction or sale of a new home.

"Building code" means a building code adopted by the State or a unit of local government.

"Constructed in a skillful manner" means that workmanship and materials meet or exceed the specific standards of the applicable building code. For the purposes of this definition, if the applicable building code does not provide relevant specific standard, "constructed in a skillful manner" means that workmanship and materials meet or exceed the standards of locally accepted building practices.

"Material defect" means actual physical damage to the following load-bearing portions of the home caused by failure of the load-bearing portions which affects their load-bearing functions to the extent that the home becomes unsafe, unsanitary, or otherwise unlivable: foundation systems and footings; beams; girders; lintels; columns; walls and partitions; floor systems; and roof framing systems.

"New home" or "home" means any single family house or for-sale unit in a multi-unit residential structure of 5 stories or less in which title to the individual units is transferred to owners under a condominium or cooperative regime. "New home" or "home" does not include dwellings constructed solely for lease, mobile home, or any house or unit in which the builder has resided or leased continuously for 3 years or more following the date of completion of construction, as evidenced by a certificate of occupancy.

"Owner" means the first person to whom the home is sold and, during the unexpired portion of the warranty period, each successor in title to the home and any mortgagee in possession. "Owner" does not include the builder of the home or any firm under common control of the builder.

"Plumbing, electrical, heating, cooling, and ventilation systems" mean:

(1) in the case of plumbing systems: gas supply lines and fittings; water supply, waste, and vent pipes and their fittings; septic tanks and their drain fields; water, gas, and sewer service piping, and their extensions to the tie-in of a public utility connection, or on-site well and sewage disposal system;

(2) in the case of electrical systems: all wiring, electrical boxes, switches, outlets and connections up to the public utility connection; and

(3) in the case of heating, cooling, and ventilation systems: all duct work, steam, water, and refrigerant lines, registers, convectors, radiation elements, and dampers.

"Warranty date" means the date of the passing of title to the first owner for occupancy by the owner or the owner's family as a residence, or the date of first occupancy of the home as a residence, whichever occurs first.

Section 10. Housing merchant implied warranty.

(a) Notwithstanding any other provision of law, a housing merchant implied warranty is implied in the contract or agreement for the sale of a new home and shall survive the passing of title. A housing merchant implied warranty shall mean that:

(1) one year from and after the warranty date the home will be free from defects due to a failure to have been constructed in a skillful manner;

(2) 2 years from and after the warranty date the plumbing, electrical, heating, cooling, and ventilation systems of the home will be free from defects due to a failure by the builder to have installed the systems in a skillful manner; and

(3) six years from and after the warranty date the home will be free from material defects.

(b) Unless the contract or agreement by its terms clearly evidences a different intention of the seller, a housing merchant implied warranty does not extend to:

(1) any defect that does not constitute (i) defective workmanship by the builder or by an agent, employee or subcontractor of the builder, (ii) defective materials supplied by the builder or by an agent, employee or subcontractor of the builder, or (iii) defective design provided by a design professional retained exclusively by the builder; or

(2) any patent defect which an examination ought in the circumstances to have revealed, when the buyer before taking title or accepting construction as complete has examined the home as fully as the buyer desired, or has refused to examine the home.

(c) In the case of goods sold incidentally with or included in the sale of the new home, such as stoves, refrigerators, freezers, room air conditioners, dishwashers, clothes washers, and dryers, a housing merchant implied warranty shall mean that the goods shall be free from defects due to failure by the builder or any agent, employee, or subcontractor of the builder to have installed the systems in a skillful manner. Merchantability, fitness, and all other implied warranties with respect to goods shall be governed by the Uniform Commercial Code and any other applicable statute.

(d)(1) A written notice of a warranty claim for breach of a housing merchant implied warranty must be received by the builder prior to the commencement of any action under paragraph (2) and no later than 30 days after the expiration of the applicable warranty period, as described in subsection (a). The owner and occupant of the home shall afford the builder reasonable opportunity to inspect, test, and repair the portion of the home to which the warranty claim relates.

(2) An action for damages or other relief caused by the breach of a housing merchant implied warranty may be commenced prior to the expiration of one year after the applicable warranty period, as described in subsection (a), or within 4 years after the warranty date, whichever is later. If the builder makes repairs in response to a warranty claim under paragraph (1), an action with respect to the claim may be commenced within one year after the last date on which the repairs are performed. The measure of damages shall be the reasonable cost of repair or replacement and property damage to the home proximately caused by the breach of warranty, not to exceed the replacement cost of the home exclusive of the value of the land, unless the court finds that, under the circumstances, the diminution in value of the home caused by the defect is a more equitable measure of damages.

(3) In addition to any other period for the commencement of an action permitted by law, an action for contribution or indemnification may be commenced at any time prior to the expiration of one year after the entry of judgment in an action for damages under paragraph (2).

(e) Except as otherwise provided in Section 15, any provision of a contract or agreement for the sale of a new home which excludes or modifies a housing merchant implied warranty shall be void as contrary to public policy.

(f) Except as otherwise provided in Section 15, other implied warranties may arise from the terms of the contract or agreement or from course of dealing or usage of trade.

Section 15. Exclusion or modification of warranties.

(a) 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.

(b) 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 the defects, call the buyer's attention to the exclusion or modification of warranties and make the exclusion or modification plain.

(c) 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 Section.

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. A copy of the express terms of the limited warranty shall be included in, or annexed to, and incorporated in, the contract or agreement.

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 those included in the contract or agreement".

The limited warranty shall meet or exceed the standards provided in subsections (d) and (e).

(d) A limited warranty sufficient to exclude or modify a housing merchant implied warranty must be written in plain English and must clearly disclose:

(1) 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;

(2) the identification of the names and addresses of all warrantors;

(3) 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;

(4) a statement of the products or parts covered by the limited warranty;

(5) 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:

(A) 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 the 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

(B) 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;

(6) 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;

(7) the term of the warranty coverage and when the term begins, provided, however, that the term shall be equal to or exceed the warranty periods of a housing merchant implied warranty, as defined in subsection (a) of Section 10;

(8) 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; and

(9) 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 provisions of this subsection, 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 the limitation or exclusion would cause the limited warranty to fail of its essential purpose, except that the 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.

Section 20. Home rule. The regulation of implied warranties for new homes is an exclusive power and function of the State. A home rule unit may not regulate implied warranties for new homes. This Section is a denial and limitation of home rule powers and functions under subsection (h) of Section 6 of Article VII of the Illinois Constitution.

Section 25. Relation to other laws. Nothing in this Act shall be construed to repeal, invalidate, supersede, or restrict any right, liability, or remedy provided by any other statute, except where the construction would, as a matter of law, be unreasonable.