Builder Warranties: Keeping Your Clients Informed

Purchasing a new build home comes with many benefits—modern designs, custom features, and the comfort of knowing everything is brand new. But what about the potential issues that could arise after the keys are handed over? That’s where builder warranties come in. Builder warranties offer homeowners peace of mind by covering repairs and defects in the home’s construction. However, not all buyers understand how these warranties work or what they cover. As a realtor or builder, it's crucial to keep your clients informed about the details of their builder warranty, ensuring they know their rights and responsibilities throughout the process.

What is a Builder Warranty?

A builder warranty is a written agreement between the builder and the homeowner that guarantees certain repairs or replacements for a specific period. It’s essentially a safety net that ensures the builder will fix defects in materials, workmanship, or structural components that might arise within a set timeframe after the home is completed. Builder warranties vary in length and scope, but they typically cover issues like plumbing, electrical systems, and structural integrity.

• Key Point: These warranties are not the same as homeowner’s insurance, which covers damages from unforeseen events like fires or theft. Builder warranties specifically cover issues related to the construction of the home.

Types of Builder Warranties

One-Year Warranty on Workmanship and Materials

Most new construction homes come with a one-year warranty that covers the basic workmanship and materials used in the home. This includes things like paint, drywall, flooring, and windows. If any of these items are found to be defective within the first year of ownership, the builder is responsible for repairing or replacing them.

• Example: If a homeowner notices cracks in the drywall or issues with the flooring within the first year, these are typically covered under the one-year warranty.

Two-Year Warranty on Systems

In many cases, systems like electrical, plumbing, and HVAC (heating, ventilation, and air conditioning) are covered under a two-year warranty. This ensures that any issues with essential home systems are addressed within the first two years of ownership.

• Tip: Be sure to inform your clients that if they experience problems with these systems early on, they should notify the builder before the warranty period expires.

Ten-Year Structural Warranty

The most significant part of a builder warranty is often the ten-year structural warranty, which covers the home’s major structural components. This includes the foundation, load-bearing walls, and roof framing. If a serious structural issue arises within the first decade of homeownership, the builder is responsible for repairing it.

• Example: If a homeowner experiences foundation settling that leads to structural damage, the builder would be required to repair the foundation under this warranty.

What’s Covered Under a Builder Warranty?

Commonly Covered Items

While coverage varies by builder, most builder warranties cover defects in workmanship, materials, and structural components. This includes:

• Roofing
• Siding
• Windows and doors
• Flooring (wood, tile, or carpet)
• Electrical wiring
• Plumbing systems
• Heating and cooling systems

What’s Not Covered?

It’s equally important for homeowners to know what isn’t covered under a builder warranty. Typically, builder warranties won’t cover the following:

• Normal wear and tear

• Cosmetic issues that don’t affect the home’s functionality

• Damage caused by improper maintenance

• Issues related to landscaping or drainage

• Defects in appliances (usually covered by separate manufacturer warranties)

• Key Point: Appliances like refrigerators, ovens, or washing machines come with their own warranties from the manufacturer, so they aren't usually covered under the builder’s warranty.

How Builder Warranties Benefit Homebuyers

Peace of Mind for New Homeowners

One of the biggest advantages of a builder warranty is that it gives new homeowners peace of mind. Moving into a brand-new home is exciting, but unexpected problems can arise. Having a warranty in place reassures buyers that they won’t be financially responsible for costly repairs to major systems or the structure itself, at least for a certain period.

• Example: A homeowner in a new build home might discover that their plumbing wasn’t installed correctly, leading to leaks. The builder’s warranty would cover the cost of repairs, saving the homeowner from an unexpected financial burden.

Added Value for Resale

A transferable builder warranty can also add value to the home when it comes time to sell. If the home still has several years remaining on a structural warranty, for example, this can be a selling point for future buyers. It gives them the same peace of mind knowing that major structural components are covered.

• Tip: If you’re a realtor selling homes with existing warranties, highlight this as a feature to prospective buyers. Warranties are especially appealing in urban living Columbus areas, where buyers may be investing in new or high-demand real estate.

Common Misunderstandings About Builder Warranties

Not a Catch-All for All Repairs

One common misconception is that builder warranties cover every repair needed in the first few years of homeownership. This isn’t true. As mentioned earlier, normal wear and tear, damage caused by homeowner neglect, or cosmetic issues are typically excluded.

• Key Point: It’s important to educate clients that while the warranty covers major defects, it doesn’t absolve them of responsibility for routine home maintenance.

Understanding Expiration Dates

Another area of confusion is the expiration of different parts of the warranty. Homeowners might assume their warranty covers everything for a full 10 years, but this isn’t the case. Different aspects of the home—like systems and workmanship—have different coverage periods, and it’s essential that buyers are aware of these.

• Tip: Advise clients to keep a copy of their warranty and note the expiration dates for each component. Encourage them to schedule necessary inspections or repairs before their warranty runs out.

Managing Warranty Claims

How to File a Warranty Claim

If a homeowner experiences an issue covered by their builder warranty, they must follow the builder’s process for filing a claim. This typically involves:

1. Documenting the problem with photos or written descriptions.
2. Contacting the builder to report the issue.
3. Allowing the builder time to inspect and resolve the issue.

• Tip: Encourage your clients to file claims as soon as they notice a problem, especially for time-sensitive warranties, like those covering one or two years.

Working with the Builder

Once a warranty claim is submitted, it’s essential for homeowners to work cooperatively with the builder. Builders have the right to inspect the problem before making repairs and may need access to the home during specific times. Keeping communication open and flexible ensures a smoother resolution process.

• Tip: Realtors can help by staying in contact with both the builder and the homeowner, ensuring the warranty process is smooth and efficient.

FAQs on Builder Warranties: Keeping Your Clients Informed

How long does a typical builder warranty last?

Most builder warranties offer coverage for one year on workmanship and materials, two years on systems like electrical and plumbing, and ten years on structural elements. It’s important for homeowners to review the details of their specific warranty to understand coverage periods.

Do all new homes come with a builder warranty?

Most new construction homes do come with a builder warranty, but the details can vary by builder. Buyers should ask their realtor or builder for a copy of the warranty before purchasing, so they know what’s covered and for how long.

Can a builder warranty be transferred to a new owner?

Yes, many builder warranties are transferable to new owners, which can be a selling point when reselling the home. However, buyers should verify whether the warranty is transferable with their builder or realtor before closing the deal.

What should I do if my builder won’t honor the warranty?

If a builder refuses to honor a valid warranty claim, homeowners should first try to resolve the issue through open communication. If this fails, they may need to consult a real estate attorney or refer to state regulations that protect homebuyers under the builder warranty laws.

Do builder warranties cover appliances?

Typically, appliances in a new home come with their own warranties from the manufacturer. These are separate from the builder warranty, so homeowners should contact the appliance manufacturer for repairs or replacements.

For more information on builder warranties or assistance with your new home purchase, contact Joseph Speakman Real Estate:

• Address: 800 N High Street, Columbus, OH 43215
• Phone: 614-607-3691
• Website: JosephSpeakman.com | JosephSpeakman.realtor
• Email: [email protected]