Subsequent Homeowners Bound By Arbitration Agreement

The Texas Supreme Court recently held that a subsequent purchaser of a home was required to arbitrate her claims against the builder for alleged construction defects. See Lennar Homes of Texas Land & Construction, Ltd. v. Whiteley, 672 S.W.3d 367 (Tex. May 12, 2023).

Lennar Homes built and sold the home to the original owner in 2014. The contract documents included a Purchase and Sale Agreement, Limited Warranty (issued by Lennar Homes), and warranty deed. In 2015, the original owner conveyed the house to Whiteley via a general warranty deed. Whiteley then brought suit against Lennar, alleging construction defects and breaches of the implied warranties of good workmanship and habitability. Id. Lennar Homes successfully moved to compel arbitration based on the Purchase and Sale Agreement and Limited Warranty and won at arbitration (the "Lennar Award"). Id.