What A Builder Warranty Covers On New Constructions And What Youre On The Hook For Yourself

Dated: 07/16/2018

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builder-warranty


So you’re buying a newly constructed home, and it comes with a builder warranty. Awesome! That means that the builder will assume financial responsibility for anything that breaks, right? Well, not exactly. A builder warranty is issued to most new constructions, but it covers a very specific list of features in and on the house.


To find out exactly what's under warranty, read on.


Home warranty vs. builder warranty


Before we dive into the specifics, we need to clarify the difference between a builder warranty and a home warranty. They may sound similar, but there are some important differences between the two. The primary difference is that a builder warranty covers new construction or a remodel by a builder. Most newly built homes come with a builder warranty.


A home warranty applies to existing properties and covers appliances (like the oven, range, and garbage disposal) and household systems (like electrical, plumbing, heating, and cooling).


And while a builder warranty is provided by the builder (makes sense, right?), a home warranty is purchased by the buyers.



What’s covered and what’s not?


The lifespan of a builder warranty depends on the specific features of the house. However, the typical builder warranty lasts six months to two years, with some lasting up to 10 years for "major structural defects" like an unsafe roof.


While there are differences in warranties from builder to builder, in general, they should cover all of a home’s materials and workmanship. In most cases, that includes:


  • Concrete foundations and floors

  • Dry basement

  • Clapboard and shingles

  • Landscaping

  • Carpentry

  • Thermal and moisture cover

  • Waterproofing

  • Insulation

  • Roofing and siding

  • Doors and windows

  • Glass

  • Garage doors

  • Paint

  • Plumbing

  • Electrical

  • Heating and cooling

  • Septic system


Most builder warranties don't cover:

  • Household appliances

  • Defects resulting from work conducted by the homeowner or anyone else after the builder's work is completed

  • Shrinkage and expansion of the house

  • Normal fading of paint

  • Shrinkage of joints/minor cracking

  • Weather-related issues

  • Dampness/condensation caused by failure of the homeowner to maintain adequate ventilation

  • Insect damage


Builder warranty essentials


While a builder warranty is an “absolute must” if you're buying a new home, it shouldn't make you feel too comfortable, says Robert Pellegrini, Jr., Esq, president of PK Boston, a real estate law firm in MA. “A builder warranty can give a false sense of security to home buyers, so you need to be careful.” You might assume something is covered that actually isn't.


It’s up to you to ask your builder for the details of the warranty and, ideally, have an attorney look over the contract. “It's a significant negotiation—the builder wants to be responsible for essentially nothing, and it's in the buyer's best interest to have the builder on the hook for as much as possible.”


Before you sign the contract, make sure you know not only what is and isn't covered, but also the length of the coverage.


Pellegrini says you should also make sure that you understand how to notify the builder should something go wrong during the period of the warranty. If you don't notify the builder in accordance with the contract terms, it could void the warranty.


Some of the biggest disagreements arise when the cause is the issue, and the question is: "Was the damage due to neglect during building or to misuse by the homeowner?" For example, if a homeowner decides to clean his paintbrushes in his kitchen sink after he moved in, but doesn't realize that doing so will render the septic system inoperable, he will be liable for replacing it at his own expense.


It’s not always cut and dried, though. “If homeowners act in good faith and work well with the builder, the builder is more apt to help you, even if it's not a warrantied item,” Pellegrini says. If the builder goes out of business, however, all bets are off. “In most cases, the buyer is out of luck,” Pellegrini says.


Bottom line? If you buy a new construction, make sure you get a builder warranty. But don't bank on that warranty covering everything that might go wrong with your home. While you should try to get as much coverage from your builder as possible, repairs and maintenance fees are all part of the home-owning game.


Source

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Mark Ross

For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 25+ years in the industry, Mark has gained experience in....

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