Whether you are building your own custom home or buying a luxurious house, warranties are always in place to protect the interests of both the clients and the builders. A warranty is a written legal document that home builders write down regarding the condition of their built homes. It contains the terms and conditions as to what defects and damages fall under the liability of the home builder for a specific amount of months or years. For newly-built houses, home builders provide a warranty to the homeowners in case of construction errors or defects. This warranty is given in terms of months or years.
In building your custom luxury homes or even simple homes, you would like an assurance that you get the best quality from your home builders. However, certain aspects of the construction of your homes can never be perfected, that is why you should always anticipate that you will find a few defects.
Warranties will get you covered!
Warranties assure customers and clients that home builders are there to provide the best quality of customer service. It radiates a sense of responsibility that homebuilders have for their customers.
As a luxury custom home builder here in Toronto, we strive to protect the best interests of our valued clients- YOU! While warranty terms and coverage may differ from one builder to another, we follow some standards in drafting a warranty. Here are the following key pointers that we consider in writing the legal document for the clients:
- The items that covered in the warranty
- The items will not be covered
- How long does the warranty last?
- What to do when you have warranty claims?
1. What items are covered in the warranty?
A. Structural components
Generally, a home builder covers the major structural elements of your home. What are these structural elements? Structural elements are the components that make up the structure of your homes. These include:
- Beams
- Columns
- Stairs
- Foundations
- Walls
- Roof Trusses or Frames
These must be covered in the warranty because these serve to protect and support the house. Warranty claims for these structural elements may include cracks and spalling of surfaces. The warranty can cover structural defects and damages for up to ten years. Sometimes, the home builder and client will agree on the period of coverage.
However, a warranty does not cover defects and damages caused by ‘Acts of God’ or force majeure. Warranties only cover defects due to material choices, construction, and design errors.
B. Architectural, HVAC and MEPFS
Warranties cover architectural, HVAC (heating, ventilation, and air conditioning), and MEPFS (mechanical, electrical, plumbing, and fire safety) defects. These only cover defects caused by design errors, materials, and construction.
Examples of the components covered in the warranty are:
- Windows and Doors such as crooked panels, lintels, etc.
- Paint blistering, peeling, wrinkling, or shriveling
- Roof leaking
- Pipe leaks in water supply and sanitary lines
- Faulty ground system for electricity
- Dysfunctional cooling and heating system
2. What items will not be included in the warranty?
The home builders do not cover the normal wear-and-tear conditions of the houses in the warranty. Here are some of the conditions that will not be covered:
- Damages induced by weather and other calamities
- Defects of household appliances
- Normal fading of paint color over time
- Damages caused by works done by homeowners or their hired repairmen
- Deterioration of materials due to aging over time
Additionally, home builders do not cover damages caused by your negligence or failure of maintenance. Some of these are:
- Neglect in maintaining the cleaning of drains, gutters, drainage
- Failure to regularly inspect and maintain conditions of components in your homes
While home builders hold a certain amount of liability over your homes, it is important homeowners should be responsible for the regular inspection and maintenance of their homes. In cases when you have done some additional work in your homes, and it caused some damage to the house, it isn’t eligible for the claims.
3. How long is the warranty period?
As stated, the structural warranty can be covered for up to ten years. Material defects can be covered for up to one year. Workmanship or construction error can be covered for up to two years. Of course, these standard periods of coverage will differ depending on the agreement of the terms. You must regularly inspect your homes during the warranty period. All defects that you will discover should be promptly reported to the home builder. It will enable the contractor to rectify the defects immediately.
4. Warranty Claims
What should you do in case you see defects in your homes? The warranty terms and conditions must be discussed and thoroughly understood by both sides to avoid confusion when the time comes. You have to read the terms and conditions of the warranty first to see if the defects are stated in the legal document.
Be sure to read the periods of coverage for the particular defect that you discover. If it is still covered within the period (e.g., one year), inform the contractor/home builder.
Be prompt! Acting quickly during these instances will be beneficial. Some defects or damages will become severe if neglected for long days or weeks. Neglect can hinder your warranty claims.
Claims for damaged appliances can be settled with the manufacturers. You can directly contact the supplier of the appliances because these already include their specific warranty.
If claims are covered under the home builder’s liability, be sure to have enough proof. Are these defects caused by a material defect, workmanship mistake, or design error? Otherwise, if such defects are caused by you, you cannot claim a warranty for these.
If upon investigation, you found that some workers do not comply with the plans and specifications, you can have the home builder do the rework without loss of time and without incurring additional cost. Superior quality should be upheld by the custom home builders. Any changes in the plans and specifications that are to be made during the construction process should go through an agreement by both sides- you and the home builders. Therefore, in cases of uninformed changes of the plans and specifications that are subpar in quality, you can contact the home builder to correct the defective work. However, it will only be covered for the specified period for workmanship errors (one to two years). After the period has lapsed, instructing the home builder to do the rework could mean additional work. Additional work would mean you have to give compensation or payment to the contractor.
On-time claim submission and reporting will help you a lot. Do not wait until the warranty period expires. Be sure you have the complete documentation and enough proof for the claims. Typical documentation would include attached pictures, a description of the damage, and a date.
While defects are the home builder’s responsibility (as stated in the warranty), it is also necessary that you exercise caution and watchful eyes inside your homes. Before accepting your newly-built house from the home builders, you must make a punch list of the defects and damages in the house. A walkthrough and careful inspection around and inside the house (from flooring to roof) is necessary to create the punch list. The homebuilder and the client usually do this at the end of the construction. Other times, before the turnover. Take pictures and record all the defects that you see. This punch list serves as a guide for the home builders to rectify and repair the listed damages and defects.
