The implied warranty of habitability is a consumer protection warranty of public policy. The rationale behind the warranty is that home buyers do not have the ability to detect latent defects in the homes they are purchasing. They rely on builders and vendors to properly construct the home and, for that reason, builders and vendors should be liable for the repair costs for a defective home. The warranty continues to expand and is actionable against a builder or a vendor of a home or a landlord in a rental situation. The warranty can be used as a remedy for tenants, home buyers and successive purchasers.
Another benefit of the implied warranty of habitability is that it is very difficult to disclaim. The builder or vendor has the burden to prove that the warranty was disclaimed specifically by name, that the disclaimer was conspicuous and fully discloses the consequences of its inclusion, and that an agreement regarding the disclaimer was actually reached with the buyer. Because of the strict disclaimer rules, many Illinois courts invalidate purported disclaimers.
Even with the expansion of economic loss in Illinois, an implied warranty of habitability cause of action allows subrogated insurers to avoid the economic loss pitfalls. It has increasingly become one of the prime means in Illinois to pursue builders and/or vendors for latent defects.