Hayden Business Center Condominiums Ass'n v. Pegasus Development Corp
In Hayden Business Center Condominiums Ass'n v. Pegasus Development Corp., 209 Ariz. 511, 105 P.3d 157 (App. 2005) the Court considered whether the Richards exception extended to commercial property transactions. 209 Ariz, at 513-14, P 14, 105 P.3d at 159-60.
In that case, the original owner of a commercial building sold condominium interests to various persons, who subsequently claimed construction defects. Id. at 512, PP 2-3, 105 P. 3d at 158.
These buyers assigned their claims to a building association, which sued the builder for breach of the implied warranty of workmanship and habitability. Id. at P 3.
The trial court granted summary judgment for the builder, ruling that no authority extended the implied warranty to claims by subsequent purchasers of commercial property. Id. at P 4.
The Court affirmed, concluding in relevant part that the policy considerations underlying the decision in Richards did not apply as parties to a sale of commercial property generally have comparable sophistication levels. Id. at 513-14, P 14, 105 P.3d at 159-60.
Thus, the court decided that the privity requirement applied without exception in the commercial property context, and the building association therefore lacked standing to sue. Id. at 515, P 24, 105 P.3d at 161.