Construction Law

Items Builder’s Warranties Typically Cover featured image

Items Builder’s Warranties Typically Cover

Builder's warranties are offered by construction companies to build homes. The warranty can last for up to 10 years on specific parts of the project. When offering builder's warranties for your construction work, it’s important to understand how they work. If there is a problem with your construction projects, you can end up with hefty expenses to repair the work. In this editorial, a Greensboro construction lawyer from our Greensboro construction law firm discusses the items builder's warranties typically cover.

Related: Construction Warranties

Structural Defects

A structural defect is a defect found in any of the structural elements of the construction project. This includes the foundation, framing, roof, and any other key element of the construction. Structural defects tend to have a longer warranty than other elements because they’re fundamental to the safety and value of the construction project. For example, a construction defect in the foundation of the house can compromise the entire building. If a structural defect is found, it’s likely that the construction company will be sued if it’s not covered under the warranty.

Structural defects tend to have the longest warranty under a builder’s warranty as it can take a considerable amount of time for the defects to be found. This is especially true if the structural elements are out of sight. As a construction company, you want buyers to have confidence in your ability to do work. Structural defects undermine that confidence, but you can reassure homebuyers that your work will be covered and properly taken care of if any problems are found.

HVAC

HVAC systems (i.e. heating and air-conditioning units) are usually covered under builders warranties, as well. While it may not be an essential part of a project, HVAC units directly impact the value of your construction work. Few people want to live in a house where they cannot control the temperature. In some states, not having a functioning HVAC system can be dangerous.

Since homebuyers are acutely aware of potential problems with HVAC systems, covering it as part of your builder’s warranty goes a long way in making sure that homebuyers feel confident in your work. HVAC systems tend to have short warranty periods because systems can break down at any point. They also are directly affected by the quality of the maintenance performed on them. If a homebuyer forgets to do periodic maintenance, a breakdown may seem like the fault of the construction company. This is why the warranty period is limited to two years in most cases, so that the construction company is not held responsible for issues relating to proper maintenance and care.

Related: Warranty and Guaranty Provisions in Contracts

Electrical Systems

Another reason to cover the electrical systems that you install is that they represent a major safety hazard when they break. If an electrical system is faulty, it could cause a fire or electrocute customers when they use them. You want to avoid this at all costs because the liability from this could be enough to shut your company down. It’s better to offer a limited warranty on the electrical system than to risk the future of your business.

Plumbing Systems

Like electrical systems, plumbing systems represent a major hazard when they break. Homebuyers may not be able to use water systems, which will quickly make a homebuyer upset about buying a house that you built. In worst-case scenarios, broken plumbing can flood the house and destroy much of the work that you have done. 

That’s why it’s important to limit the warranty on the plumbing system in a few specific ways. Plumbing systems should last an extended period of time, so having a longer warranty period may not be much of a risk. However, proper care and maintenance can affect the quality and longevity of pipes. If the pipes that you install can be susceptible to problems with maintenance, it may be a better idea to shorten the length of time for the warranty within reason.

It’s also important to watch out for what type of materials you use on a project. You must avoid materials that have been identified as causing problems for home buyers over the long run. For example, asbestos was once used as an insulator, primarily for pipes, and has since been linked to the development of mesothelioma. If you offer a builders’ warranty for plumbing systems, minimize the use of potentially dangerous materials so that you can minimize the chances of creating future problems for yourself.

Related: Implied Warranties in Residential Construction Contracts 

Water Penetration Problems

When your construction work is finished, the building should be watertight in most places. If water gets into the building in ways that it is not supposed to, it will quickly degrade any construction work that you have done. It can also create major expenses for homebuyers if water leaks in and damages different parts of the house. By offering the builders’ warranty for water penetration problems, you can mitigate many of the potential problems related to leaks.

For example, if the roof that you installed leaks and damages other parts of the house, offering a builder’s warranty to fix the damage will minimize the impact on your reputation. Instead of letting the customer be angry that the work was not done up to their expectations, you can build a reputation for fixing the problems that arise and being a reliable source of help in serious situations.

Water penetration problems can also cause problems for other parts of your warranty. Make sure that you limit the warranty to damage caused by a specific problem rather than widespread water damage that homebuyers or other companies may have caused. It’s also important to make sure that your warranty is limited to the work that you did and does not extend to repairs or adjustments other companies have made. They should have their own warranty programs and be held responsible for the work that they did. Do not include repairs and other parts of the house related to a leak that another company caused. This will minimize your financial impact while giving you the chance to protect your reputation within the construction community.

Builders warranties do not have to be complicated or extensive. Make sure that you offer coverage for things that can help protect your business and your reputation while supporting homebuyers. If you have questions about builders warranties, contact one of the Greensboro construction law attorneys from Cotney Attorneys & Consultants. 

If you would like to speak with a Greensboro construction attorney, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.