Yes, I think shutoffs under every sink and on every toilet are mandatory for me. I don't want to have an overflowing toilet or a faucet let loose then have to go running for the main shutoff valve in the basement. I like the fact that I can isolate the problem without having to shut down the entire house.

To fix your problem with the missing shut offs,they sell shut offs that use a compression fitting to go on the pipe that are very easy to install.

Here is a link that might be useful: installing shutoff valves

The question here is whether the deficiencies are things that do not meet the building code. If they are code violations, then you should seek the advice of a good attorney. Normally, the town/city is the party that employs building inspectors that check the work done by the various trades to make sure that everything is done to code.

As such, you may have a cause of action against the city/town because they signed off on the work.

Other than that, I totally agree that a shut-off should be available at every water using device except for tub/showers. But even those often have shut-offs built right into the valve.

Are local shut offs still required if you have a PEX manifold with individual shut offs on each line?

This is really a two-part question.

Code requires that all fixtures with the exception of tub or shower mixers must have individual shutoffs. (REF:IRC 2903.9.3 & UPC 605.5)

In a conventional main and branch configuration the shutoffs are generally placed as angle stop valves immediately under each sink or fixture where the pipe exits the wall however there is an exception to this rule. When each fixture is served by a separate home run line back to a common manifold such as is currently done with PEX the manifold valve MAY BE considered the fixture shutoff "if each valve on the manifold is clearly labeled to indicate which fixture it controls."

The second part of your question is in regards to the home warranty. You indicate that this house has numerous deficiencies. Generally, although not in all cases, a structure undergoes a number of required inspections during construction. If the deficiencies are violations of local code it then begs to answer the question how did they pass inspection? A warranty generally warrants the material and workmanship against defects for a specified period of time however it does not excuse substandard workmanship. If you feel that you have numerous code violations in the construction of your home you should thoroughly document your findings and consult your attorney about a possible course of action to recover your damages.

let me give you my experience with no shut offs under a sink.

last year i changed out the kitchen faucet because the old one was worn out. i shut off the main water to the house since the only 2 shutoffs under the sink supplied only the dishwasher and the refrigerator! in removing the old faucet the flexible copper supply line from teh wall to the faucet broke. no big deal, i will just pick up another one. since my wife was going to the store, i sent the line with her while i finished everything else. she calls and no one can find a line like that, but they had a plastic one. i told her i did not care if it was plastic, i just had to have a line. she brings it back, and it is a 1/2 supply line. i look at the wall and i have a 5/8 gas nipple on the cold water pipe! the original owner had used what he had on had to replace the ruptured line at some point, and taken off the shut offs and put on gas nipples. i had to cut these off as they had fully rusted in place, then rethread the 1/2 pipe so i could install shutoff valves. this had to be done THAT NIGHT, and since it was Sunday and 6 pm, i had 1 hour to go buy what i needed or be out of water until the next day since i could not turn the main back on with an open 1/2 pipe. if i had a shut off there in teh first place, all i would have had to do was turn it off and the rest of the f=house would have been fine.

put them on. you don't have to do them all at once, change out 1 or 2 at a time until done.