If you’re like most people, a home is the most expensive purchase you’ll ever make. It’s no wonder, then, that buyers of newly built homes are interested in warranties, which promise to repair or replace certain parts of a home, if necessary, within a certain time-frame from the date of purchase.
For new homeowners, it’s common to confuse a home warranty with a builder warranty, but it’s important to understand the difference. While they might sound similar, the two are completely different. A home warranty applies to existing properties purchased on the secondary market, and it covers replacements and repairs on items like refrigerators or AC units. A homeowner decides whether or not to buy a home warranty.
A builder warranty is extended to a buyer by a builder on a new construction or remodel and it covers components inherent to the house like concrete floors, plumbing or electrical work. Most newly built homes come with a builder warranty.
How long do warranties last?
In Texas, current law provides for two implied warranties when it comes to new residential construction. One is known as the “implied warranty of good workmanship,” which basically guards against workmanship or installation errors. The other is called “the implied warranty of habitability.” That means that under the terms of the warranty, the house needs to meet basic living and safety standards.
The length of a warranty varies depending on the different components of the house it covers. The majority of builder warranties cover workmanship and materials on most of the home’s components during the first year. For example, most warranties on new construction cover siding and stucco, doors and trim, and drywall and paint for the first twelve months following construction.
Coverage for HVAC, plumbing, and electrical systems is generally one to two years, while any major structural defects—sometimes defined as problems that make the home unsafe to live in—are typically covered for up to 10 years. For example, a roof that could collapse is definitely considered a major structural defect.
What’s included?
While there are differences in new home warranties from builder to builder, in general, warranties should cover all of a home’s materials and workmanship, except when the items are covered by a component manufacturer.
In cases where an appliance like a dishwasher or an item like a water heater malfunctions, that would fall outside the terms of a builder warranty because the components are covered by the manufacturer.
Builder warranties typically cover items including:
· Siding and shingles
· Carpentry work
· Thermal and moisture cover
· Waterproofing
· Insulation
· Concrete foundations and floors
· Doors and windows
· Glass work
· Garage doors
· Paint
· Plumbing
· Electrical work
· Heating and cooling systems
· Septic system
Most builder warranties do not cover:
· Household appliances
· Defects from work the homeowner or anyone else does after the builder is done
· A home’s shrinkage and expansion
· Paint fading
· Minor cracking
· Issues that are weather-related issues
· Shrinkage of joints
· Dampness/condensation from a homeowner not maintaining enough ventilation
· Insect damage
· Components covered under manufacturer and third-party warranties (Remember, it’s the new owner’s responsibility to register for these types of warranties.)
As you build a new home and sign a contract for a builder warranty, it’s always a good idea to read the fine print to understand exactly what’s covered and what isn’t, and how long you’re covered for. Also, make sure you know how to let your builder know if a problem does pop up during the warranty period. For some, you have to send in written notification, while others might have a hotline you need to call.
If you’ve worked with an experienced, high-quality builder, your new build will hopefully be free of any major problems for years to come. If any unexpected issues do arise though, you’ll feel better knowing that your builder warranty is there to cover you.
