Toll Free: 866.377.6680 CONTACT US
Builder Warranties
Under time-honored principles of common law, homeowners have recovered hundreds of millions of dollars for defective building practices and products. In response, the building industry has moved to limit its liability in contract documents, by substituting limited express warranty for the broader warranties available from the courts, and by convincing the legislature to make it harder to sue builders and material suppliers for shoddy work.
When you bought your new house, you may have received a thick binder with maintenance instructions and a "builder warranty". What you did not realize, though, is it furnishes far less protection than you would have enjoyed with no written warranty whatsoever. It places severe limitations on the scope and duration of the warranty and imposes onerous procedural requirements for enforcement.
Read through the warranty. You will find it limits claims by time in two ways. First, most claims must be made in the first year after your house is completed or they will not be covered. Exceptions may include appliances and other fixtures carrying a manufacturer's warranty, or serious structural defects. The latter may be covered for a longer period of time, perhaps ten years. It's still shorter than your mortgage. Second, you must make claim within a set period after discovering the problem. The period may be as short as ten days, and certainly shorter than the statute of limitations for filing a lawsuit. If you don't make the claim timely, the warranty company will deny it.
Not everything is covered in the warranty. Some builder warranties exclude concrete cracks smaller than a number two pencil. If your driveway cracks that badly in the first year, imagine what it will look like after five years of rain and exposure. Most warranties exclude "cosmetic" damage-say, that five-foot-long crack in the dining room wall. All these warranties exclude what they call "consequential damages". Consequential damages may be mold, resulting from a roof leak. The roof may be repaired for a couple hundred dollars, but you can be left with thousands for mold cleanup. They may be the ruined carpet from walls that fail to keep the rain out. The builder will return to put some caulk on the window, but you're on your own for the carpet replacement.
Pay attention to how the warranty defines covered defects. It may describe as "normal" the concrete cracks mentioned above. It may declare that paint peeling after one year is not a defect. In addition to "defining down" what a defect is, the warranties typically set ridiculously low performance standards. For example, they may require door frames to be plumb "within 1Ú4" in four feet". The door inside that frame will stick for as long as you own your house.
Your remedy under most builder warranties is to accept the builder's method of fixing the problem. Since he doesn't have to live there, and probably isn't responsible for the repair after the original warranty expires, he has no incentive to make a lasting repair. Most warranties require you to waive your right to a jury trial and to submit claims to arbitration. While arbitration itself is not necessarily bad, the panel of "neutrals" who hear these claims are dominated by the building industry.
Toll Free: 866.377.6680
© 2007 The Construction Defects Legal Network.
Disclaimer
