New Built Home Warranty
Warranties for Newly Built Homes: Know Your Options: For many people, a home is the most expensive purchase they ever make. It’s no wonder, then, that buyers of newly built homes are interested in warranties, which promise to repair or replace certain elements of the home, if necessary, within a certain time. According to the Federal Trade Commission, the nation’s consumer protection agency, if you’re considering a home warranty it’s important to understand what it covers, how to make a claim, and the process for resolving disputes that may arise between you and the builder or warranty company.
Many home warranties are backed by the builder; others are purchased by the builder from an independent company that assumes responsibility for certain claims. Some home owners purchase additional coverage on their own from third-party warranty companies to supplement the coverage their builder provides. These add-on service contracts are commonly called warranties. 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.
Coverage
Warranties for newly built homes generally offer limited coverage on workmanship and materials relating to various components of the home, such as windows, heating, ventilation and air conditioning (HVAC), plumbing, and electrical systems for specific periods. Warranties also typically define how repairs will be made.
The duration of coverage varies depending on the component of the house. Coverage is provided for workmanship and materials on most components during the first year. For example, most warranties on new construction cover siding and stucco, doors and trim, and drywall and paint during the first year. Coverage for HVAC, plumbing, and electrical systems is generally two years. Some builders provide coverage for up to 10 years for “major structural defects,” sometimes defined as problems that make a home unsafe and put the owner in danger. For example, a roof that could collapse is a “major structural defect.”
Most warranties for newly built homes, however, do not cover expenses an owner may incur as a consequence of a major construction defect or warranty repair, like the cost of having to move out of one’s home while repairs are being made. Nor do they typically cover:
+household appliances
+small cracks in brick, tile, cement or drywall
+components covered under a manufacturer’s warranty
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