When purchasing a newly built home, it’s important to note that even new construction can have its share of issues, such as plumbing leaks or improperly closing doors. While a home builder warranty may cover certain defects, the extent of coverage depends on the terms outlined in your agreement.
Whether you’re in the market for a new home in Phoenix, AZ or considering a new construction condo in Tampa, FL, experts advise on the importance of understanding builder warranties and conducting thorough checks before finalizing your purchase.
Key takeaways
- Builder warranties may cover defects in workmanship, materials, systems, and structural components.
- Coverage periods and exclusions vary by builder and warranty agreement.
- Buyers should review claim procedures, deadlines, and inspection options before closing.
- A builder warranty isn’t a substitute for an inspection. An independent inspection can help identify potential issues before closing or before applicable warranty deadlines.
What does a home builder warranty cover?
A home builder warranty is a limited agreement that may cover certain construction defects for a specified period. Depending on the contract, coverage can include:
- Workmanship and materials: Certain defects involving doors, windows, roofing, and other installed components.
- Major systems: Covered issues with plumbing, electrical, heating, and cooling systems.
- Structural components: Certain defects involving foundations and other load-bearing elements.
Rob Rogers, a partner at construction litigation firm Kirwin Norris, P.A., explains that some builder warranty periods range from six months to two years. Longer coverage may apply to certain structural defects.
For example, the FTC notes that many new-home warranties provide about one year of coverage for workmanship and materials, two years for certain systems, and potentially longer coverage for major structural defects. Always check the specific warranty for the home you’re considering to understand what’s covered and for how long.
The exact terms vary, so check your written warranty to understand which components are covered and for how long.
EXPERT TIP: Don’t Assume longer coverage applies to everything.
“A builder warranty typically provides limited coverage for defects in workmanship and materials, with separate coverage periods for certain systems and major structural defects,” says Shannon Miles, New Construction Specialist with Shannon Miles Group at Build Your Way Home.
Builder warranty vs. home warranty: What’s the difference?
Although the terms sound similar, a builder warranty and a home warranty serve different purposes.
- Builder warranty: Typically covers certain construction defects involving workmanship, materials, and structural components in a newly built home. Coverage varies by contract and may last for different periods depending on the issue.
- Home warranty: Usually refers to an optional service contract that helps cover repairs or replacements for certain household systems and appliances, such as HVAC equipment, plumbing, and kitchen appliances, when they break down under covered circumstances.
The main difference is the type of coverage each provides. A builder warranty generally comes with a newly built home and covers certain repairs or replacements for household systems and appliances. A new home may have both, along with separate manufacturer warranties for individual products.
What doesn’t a builder warranty cover?
Builder warranties generally don’t cover every issue that develops after closing. Common exclusions may include:
- Routine maintenance and normal wear
- Weather-related or pest damage
- Damage caused by improper maintenance
- Certain minor cosmetic changes
- Defective work completed by homeowners after construction
- Items covered by separate manufacturer warranties
- Certain minor cracks or cosmetic imperfections
Household appliances may also have separate manufacturer warranties rather than coverage through the builder.
EXPERT TIP: Understand the exclusions before buying.
“Builder warranties typically exclude certain homeowner-caused problems, appliances, and weather-related damage”, explains Rob Rogers of Kirwin Norris, P.A. He recommends reviewing the warranty’s coverage limits, reporting requirements, and dispute-resolution procedures before closing.
What should you check before signing?
Before finalizing the purchase of new construction, it’s essential to obtain a copy of the written warranty and review the following details:
- Coverage: What’s included, and which problems are excluded?
- Duration: When does coverage begin and expire for each component?
- Claims: How and when must you report a problem?
- Disputes: What happens if the builder denies a claim?
Warranty rights can also vary by state. Depending on your location, state laws may offer additional protections or requirements beyond those specified in the builder’s warranty. If you have concerns about your rights or the terms of the agreement, consider seeking advice from a real estate attorney familiar with the laws in your state.
How to file a builder warranty claim
If you discover a potential defect after moving in, begin by reviewing the reporting instructions outlined in the warranty.
Miles suggests taking photographs, following the required notification process, and retaining evidence that you submitted the claim before the deadline.
A few simple steps can help you stay organized:
- Take photos of the issue and document when you first noticed it.
- Submit the claim following the builder’s specified process and keep proof of receipt.
- Save emails, receipts, and any other relevant correspondence.
- Stay informed about deadlines and scheduled repairs.
Should you get a new construction home inspection?
While new construction undergoes mandatory code inspections during the building process, hiring a buyer-appointed inspector for an independent review of the home is recommended.
Miles advises on conducting a home inspection before closing and another before the first-year workmanship coverage expires. This approach allows buyers to document any concerns while coverage may still be in effect.
If your workmanship warranty lasts for a year, consider scheduling the second inspection around months 10 or 11 to allow time for reporting any issues before the deadline.
>>> Learn: Pros and Cons of New Construction Homes
Understanding your home builder warranty
A home builder warranty can offer coverage for specific construction defects, but it’s crucial to grasp its limitations. Before closing the deal, carefully review the terms, keep all documents organized, and understand how to report any issues.
Knowing what your warranty covers and its expiration dates can help you navigate the process should any problems arise after moving into your new home.