9 New-Construction Problems North Carolina Buyers Don’t Expect to Find

A brand-new house can feel like the safe bet, with fresh paint and nobody else’s problems.

But North Carolinians buying new can run into issues a resale buyer might never face.

Here are the new-construction surprises worth checking on before you close.

Note: This is general information, not legal advice. Building rules and deadlines are subject to change.

1. Compacted Yard Soil

North Carolina State Extension reports that most new home construction removes the topsoil and subsoil from the building area.

Compacted soil can keep your plants from growing well.

Removed material often ends up next to the house and around the foundation in the final stages of construction.

Much of the subsoil across the Piedmont and the mountains is heavy clay.

Clay is slow to drain.

Your soil may stay wet for long periods.

2. Untreated Slab Areas

North Carolina’s minimum standards require termite pretreatment for a new-construction home.

Then there’s the release form.

The state Department of Agriculture publishes a sub-slab release form for buyers.

By signing it, you acknowledge that certain slab areas weren’t treated for subterranean termites during construction.

You also release the pest control company from drilling the slab areas and treating the soil beneath them.

The form isn’t a waiver of the minimum treatment requirements.

It’s meant for use only after part of a treatment was left out unintentionally.

Before you sign, ask the pest control company which areas it skipped and why.

You also have the option of having the omitted treatment done at that time.

3. Temporary Certificate of Occupancy

You can move into a new-construction home while parts of it still lack final approval.

Temporary certificates make that possible.

Under G.S. 160D-1116, an inspector can issue a temporary certificate of occupancy for a stated period.

That applies when the inspector finds the building can safely be occupied before its final completion.

A temporary certificate can cover the whole building or only parts of it.

Once all work under the building permit ends, the inspector makes a final inspection of your new home.

If the work meets the rules, the inspector issues a certificate of compliance.

4. Inspections That Skip the Code

A licensed home inspector’s job on a new-construction house isn’t to check whether the house meets building code.

North Carolina’s home inspector standards define an inspection as a visual examination.

They also leave out whether a house complies with codes, ordinances or statutes.

Checking code is the job of the building inspector who signs off on the permit.

Person County’s inspections department, for example, publishes a list of common code violations that includes missing fire blocking, missing anchor bolts and an improperly installed foundation drain.

You want a licensed home inspector’s report and the county’s sign-off in hand before you close.

Neither replaces the other.

5. No Disclosure Statement

A new-construction home on its first sale skips North Carolina’s standard residential property disclosure statement.

Resales work differently.

On an ordinary resale, the owner has to give you the disclosure statement.

The statement either lists what the owner knows about items like structural components, water and sewage systems and wood-destroying insects, or says the owner makes no representations.

6. One-Year Warranty Myth

Your contract for a new-construction home can eliminate the implied warranty that North Carolina law otherwise gives you, according to a January 2025 construction-law blog post.

In a 1974 decision, the North Carolina Supreme Court held that a builder who sells a new dwelling gives the first buyer an implied warranty.

The home has to be sufficiently free from major structural defects and built in a workmanlike manner.

Many buyers assume a one-year warranty comes automatically.

The law doesn’t say so.

A one-year warranty is a term in your contract, not a North Carolina requirement.

7. Six-Year Clock

Your six-year limit on lawsuits over a defective or unsafe condition in a new-construction home can start before you own the house.

The six years run from the later of two dates.

The first date is the builder’s last act or omission behind the claim.

The second date is substantial completion.

Neither date is your closing.

8. Developer-Run HOA Boards

You can buy into a new-construction neighborhood whose homeowners association (HOA) board the developer is allowed to appoint and remove.

State law lets a neighborhood’s declaration set a developer-control period, when the developer can appoint and remove the officers and members of the board.

Your vote comes later.

By the end of that period, lot owners must elect a board of at least three members, with a majority of them lot owners.

If your declaration sets a developer-control period, that’s where it’s described.

9. Recovery Fund Catch

On a new-construction home, North Carolina’s Homeowners Recovery Fund pays only after you win a judgment against the contractor that stays unpaid.

The fund can reimburse you if a general contractor’s dishonest or incompetent conduct costs you money on a new-construction home.

You have to sue the contractor in civil court first.

A deadline follows.

The deadline is generally one year after the civil case and any appeals end.

The fund also caps each award at 10 percent of its total balance when the board approves the application.

Builder’s Tax Exclusion

North Carolina lets a builder apply to exclude the value of a new-construction single-family house from property tax while the builder holds it for sale.

That exclusion can’t run longer than three years from when the improved property first became subject to listing for taxation by the builder.

The exclusion also lasts only as long as the builder holds the property for sale.

Your closing generally ends the exclusion, according to the state Department of Revenue’s course manual.