## Facts

- Richard and Judy Shockey purchased a used residence from Thomas Vetor in October 1977.
- Vetor had owned and lived in the home for about four years but was not the builder.
- The purchase agreement required Vetor to convey the property by general warranty deed “in the same condition as it now is, ordinary wear and tear excepted.”
- Before taking possession, the Shockeys asked about the septic system; Vetor stated it was in “good working order.”
- After the sale, the Shockeys discovered the septic system required extensive repairs estimated at about $1,000.
- The Shockeys sued in small claims court, alleging reliance on Vetor’s assurance regarding the septic system.
- The trial court entered judgment for the Shockeys, finding the seller liable for latent defects not discoverable by reasonable inspection and concluding there was an implied warranty that the septic system was in proper working order.
- On appeal, the Shockeys filed no appellee brief; the appeal proceeded on a certified statement of the evidence rather than a transcript.

## Issues

1. Whether an implied warranty of habitability applies to the sale of a used home by a non-builder vendor.

## Decision

- The Court of Appeals of Indiana reversed.
- The court held that Indiana law does not recognize an implied warranty of habitability in the sale of a used home by a non-builder vendor.
- Because the trial court’s liability finding rested on an implied warranty theory unavailable as a matter of law, the judgment constituted prima facie reversible error.

## Legal Principles

- Indiana’s implied warranty of habitability is limited to sales of new residential construction by builder-vendors and does not extend to used-home sales by non-builder vendors.
- In used-home transactions involving non-builder sellers, caveat emptor generally applies; buyers are expected to conduct reasonable inspections and negotiate for express warranties if desired.
- Buyers may still pursue traditional tort remedies, such as misrepresentation or fraudulent concealment, if the required elements are proven.
- When an appellee fails to file a brief, the appellant may obtain reversal by showing prima facie error.

## Conclusion

The court reversed a small-claims judgment that imposed implied-warranty liability on a non-builder seller of a used home, holding that Indiana confines the implied warranty of habitability to new-home sales by builder-vendors and otherwise leaves buyers to inspection, bargaining for express warranties, and fraud-based remedies.


Vetor v. Shockey, 414 N.E.2d 575 (Ind. Ct. App. 1980)