The Legislature finds that owners of new homes are entitled to protection through implied warranties since most people cannot detect shoddy construction in new homes, since it is usually hidden. For purposes of this section, if an existing building not a condominium is remodeled into residential condominium units or otherwise converted into residential condominium units, the resulting residential condominiums shall be considered new homes. Consumers purchasing new homes or contracting for the construction of new homes after the effective date of this chapter are entitled to the following protections:(a) A new home has the following implied warranties:

(1) That the home was built in a workmanlike manner of suitable new materials of at least average quality, and that any exceptions thereto were communicated to the purchaser thereof in a separate writing signed by the purchaser before he occupied the home. Compliance with this subsection (1) shall not excuse compliance with any other warranty.

(2) That the home was built according to plans and specifications filed with Department of Public Works (the “Department”), and that the home fully complies with all laws, the Building Code and all rules and regulations relating thereto. The failure of a building inspection to detect noncompliance with plans, laws, or rules and regulations, the Building Code, or specifications shall not be a defense to a claim under this warranty.

(3) If the home was purchased from a developer who supplied both the lot and the home to the purchaser and did not build on a lot supplied by the purchaser, there is a warranty that the home will not flood for a period of five (5) years, in the absence of any negligence by the homeowner.

(4) In addition to the foregoing warranties, the home is warranted against all defects of construction, materials, and workmanship for eighteen (18) months.

(b) The warranties of this section do not include damages caused by typhoon with sustained winds in excess of one hundred fifty-five (155) miles per hour nor damage by an earthquake exceeding an intensity on Guam of four and seven tenths (4.7) on the Richter Scale. Neither do the warranties cover extraordinary damages caused by acts of God, the negligence or intentional act of any other person, nor damages caused by failure to do normal maintenance, nor for damage caused by unusual usage, abandonment, or neglect of the property.

(c) All times for warranties start to run when the new home is sold to the first occupant or owner or when the new home is completed as evidenced by a certificate of occupancy issued by the Department, as the case may be; or if both events occur, the latest date thereof.

(d) No bonding company which is bonding a contractor constructing a new home shall be responsible for any of the warranties set out in this section for breaches which occur more than one (1) year after the date the certificate of occupancy is issued for the home by the Department.