1. (a) A builder may disclaim all implied warranties only if all of the following conditions are met:

   1. (1) The warranties defined in this chapter are expressly provided for in the written contract between a builder and an initial home buyer of a new home.
   2. (2) The performance of the warranty obligations is backed by an insurance policy in an amount at least equal to the purchase price of the new home.
   3. (3) The builder carries completed operations products liability insurance covering the builder's liability for reasonably foreseeable consequential damages arising from a defect covered by the warranties provided by the builder.

2. (b) The disclaimer must be printed in a minimum size of 10 point boldface type setting forth that the statutory warranties of this chapter are in lieu of the implied warranties that have been disclaimed by the builder, and the initial home buyer must affirmatively acknowledge by complete signature that the home buyer has read, understands, and voluntarily agrees to the disclaimer. Additionally, the initial home buyer must acknowledge the disclaimer of implied warranties by signing, at the time of execution of the contract, a separate one (1) page notice, attached to the contract, that includes and begins with the following language:

   "NOTICE OF WAIVER OF IMPLIED WARRANTIES

   I recognize that by accepting the express warranties and the insurance covering those warranties for the periods of time provided in this contract, I am giving up the right to any claims for implied warranties, which may be greater than the express warranties. Implied warranties are unwritten warranties relating to the reasonable expectations of a homeowner with regard to the construction of the homeowner's home, as those reasonable expectations are defined by the courts on a case by case basis.".

3. (c) If there is a default of either:

   1. (1) the insurance for the performance of the warranty obligations; or

   2. (2) the completed operations products liability insurance;

      the disclaimer by the builder is void from and after the default.

      [Pre-2002 Recodification Citation: 32-15-7-9.]

As added by P.L.2-2002, SEC.12.