## Facts

- A builder–vendor custom-built a residence in Clive, Iowa, in 1995 for the original purchasers.
- The home was later sold to intermediate owners and then sold to Robert and Beverly Speight on August 1, 2000.
- After purchase, the Speights observed water damage and mold.
- An inspection attributed the damage to a defectively constructed roof and defective rain gutters.
- No record evidence showed that any owner before the Speights had actual or imputed knowledge of the defects.
- On May 23, 2005, the Speights sued the builder–vendor for (1) breach of the implied warranty of workmanlike construction and (2) general negligence.

## Issues

1. Whether the implied warranty of workmanlike construction extends to subsequent (remote) purchasers, allowing them to sue the builder–vendor for latent construction defects.
2. Whether Iowa Code § 614.1(4) bars a subsequent purchaser’s implied-warranty claim, including whether the discovery rule applies to accrual.

## Decision

- The court held that the implied warranty of workmanlike construction extends to subsequent purchasers and permits them to sue the builder–vendor for latent defects.
- The court held the discovery rule applies; accrual occurs when the buyer discovers, or with reasonable diligence should discover, the defect.
- Applying the discovery rule, the court concluded the Speights’ implied-warranty claim was timely.
- The court vacated the court of appeals decision, reversed summary judgment for the builder–vendor, and remanded for further proceedings.
- The dismissal of the general negligence claim remained undisturbed because it was not challenged on appeal.

## Legal Principles

- Iowa’s implied warranty of workmanlike construction is a judicially created protection for innocent homebuyers that holds professional builders accountable for construction quality.
- Lack of contractual privity between a builder–vendor and a subsequent purchaser does not bar an implied-warranty claim for latent construction defects.
- The policy reasons supporting implied warranty protection in new-home sales apply equally to subsequent purchasers who cannot reasonably detect latent defects at purchase.
- For implied-warranty claims involving latent defects, the statute of limitations begins to run when the plaintiff has actual or imputed knowledge of the defect (discovery rule), not at construction or first sale.
- Concerns about extended liability are constrained by limitation and repose periods and by ordinary proof requirements.

## Conclusion

The Iowa Supreme Court recognized that subsequent home purchasers may recover from a builder–vendor for breach of the implied warranty of workmanlike construction for latent defects and held that such claims accrue under the discovery rule, making the Speights’ action timely and requiring further proceedings on remand.


Speight v. Walters Dev. Co., Ltd., 744 N.W.2d 108 (Iowa 2008)