General contractors and home builders could face increased litigation and liability risk for home defects in light of a recent court decision focused on home warranty cases.

The decision addresses the question of whether home builders could be sued for problems with a home's construction if a development corporation that had brought in the contractors to work on the new homes had dissolved. According to this Cook County Record article, this goes against common practice that general contractors cannot be sued if the developer goes out of business.

Before this decision, builders generally had been able to hide behind the developer or someone else who sold the house. After the First District opinion, however, that is no longer the case, and builders and general contractors can be on the hook for liability from their work for homeowners and homeowner associations.

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