Skip to main content

DiDonato v. Bureau of Homeowner Protection

OAL Dkt. No. CAF 815-04 (Bureau of Homeowner Protection 2004) (Unpublished)

CONTRACTORS; NEW HOME WARRANTY—Although new home warranty protection is lost if “any” change is made to the home, the word “any” is not to be read literally because the change must be one that materially affects the complained-of condition.

After moving into their new home, homeowners discovered an “imbalance” in the heating system. The problem was that the temperature varied by as much as five degrees from room to room. When they could not correct the problem, they filed a complaint with the Bureau of Homeowner Protection. In the months prior to the arbitration, the owners made certain improvements to the heating system. They had an electrostatic filter professionally installed; a Trion humidifier professionally installed; three basement vents professionally connected to the heating system in their basement; and a programmable thermostat professionally installed. None of the changes were designed to alleviate the imbalance in the heating system, and none corrected it.

After arbitration, the arbitrator denied the claim without prejudice and directed the homeowners to have the house inspected. If a heating deficiency was found, the builder was to be given fifteen days to correct the problem. After the inspection, despite finding that the system was malfunctioning, the Bureau denied the claim because of the work the owners had done to the heating system.

An Administrative Law Judge (ALJ) held that the Bureau’s interpretation of its regulations was draconian. The enabling statute provides that a homeowner is to be excluded from home warranty protection if, after initial occupancy, changes were made to the home by anyone. This should not be read literally to mean “any” change made to the home. Only when the owner’s change or alteration materially alters the complained-of problem, will it be deemed outside the scope of the home warranty. The ALJ held that none of the owner’s changes had materially impacted the imbalance in the heating system.

The Commissioner of the Department of Community Affairs affirmed that the statute excludes only those who make alterations that materially alter the problem at issue, but, unlike the ALJ, held that the changes materially impacted the imbalance in the heating system. Therefore, the Commissioner found that the Bureau properly disallowed the claim.

66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 •