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What Does a Builder’s Warranty Cover?

by | Mar 15, 2020 | Real Estate

Builders’ warranties vary greatly, so it’s important that homeowners take the time to learn what’s covered.

Even with new homes, things can go wrong. That is why many buyers of newly built homes are interested in warranties, which promise to repair or replace certain elements of the home.

Many home warranties are backed by the builder, while others are purchased by builders from independent companies that assume responsibility for specific claims. In other cases, homeowners purchase coverage from a third-party warranty company to supplement coverage provided by their builder. In fact, the Federal Housing Authority (FHA) and the Department of Veterans’ Affairs (VA) require builders to purchase a third-party warranty as a way to protect buyers of newly built homes with FHA or VA loans.

The key to any of these warranties is to understand what’s covered, what’s not covered, how to make a claim and the process for resolving disputes that might arise between you and the builder or warranty provider.

Most warranties for newly constructed homes offer limited coverage on workmanship and materials as they relate to components of the home, such as windows, siding, doors, roofs or plumbing, electrical and HVAC systems. Warranties typically provide coverage for one to two years, although the specific time period may vary by from component to component; coverage may last up to a decade on major structural elements. Warranties also routinely define how repairs will be made and by whom.

Warranties generally do not cover household appliances, tile or drywall cracks, irrigation systems or components covered under a manufacturer’s warranty. Most warranties also exclude expenses incurred as a result of a warranty repair construction, such as the need to store household belongings while a repair is being made.

Before you close on your new home purchase, you should ask your builder – or your third-party warranty provider – these questions:

  • What does this warranty cover?
  • What is not covered by this warranty?
  • What’s the process or timeliness if I have a claim?
  • Is it possible for me to dispute your decision to deny a claim?
  • What is the extent of your liability?
  • Can you refer me to other new home owners with whom you’ve worked so I can speak to them about warranty coverages?
  • Where are some of you previous projects so I can speak with owners there?

The information you gain may not be enough to send you running from your new home deal, but it should help you understand where you’ll stand if you ever need to file a claim. You should also check with your state’s Attorney General Office or contractor licensing board to make certain your builder is offering all warranties he’s required to provide.

To learn more about builders’ warranties, contact your state or local builders’ board. If you’re making your home purchase with an FHA or VA loan, those organizations can also provide you with additional information.

Originally published June 11, 2014

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MICKI ESPOSITO

MICKI ESPOSITO

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An accomplished real estate professional with a distinguished track record of success.  She has spent over 17 years in Atlanta representing buyers and sellers of $1M+ properties and is a tremendous negotiator.  Micki has a unique knack for forming close and authentic relationships with her clients; she steps beyond the real estate transaction and provide them with after care.  Micki has unparalleled marketplace knowledge and thrives on being resourceful; she studies and follows the data beyond the average agent.

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