April 13, 2021

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Mortgage News

What is Covered Under a Builder Warranty in New Construction Homes?

When buying a brand new Bauhaus, a guarantee is often given for the first one to two years of ownership. It is not uncommon for some new housing developments to advertise that they: a Manufacturer guarantee. Some of these warranties are backed by the manufacturer; others, the manufacturer can purchase the warranty for you from a third party.

If your brand new home is covered by a warranty, it is a good idea to study it carefully so that you, the homeowner, know exactly what the warranty includes and what to do if a problem arises. It is also very important to be aware of the owner’s responsibilities or requirements in order to maintain the warranty and keep it valid.

All VA and FHA loans require a brand new home to have a guarantee before the loan is approved. A manufacturer’s warranty is sometimes what encourages buyers to purchase a new build over a resale home.

What is included in a new build guarantee?

New home warranties are limited in terms of their coverage. The main purpose of a new build home guarantee is to cover the workmanship and materials used to build the home. Most warranties focus on the main systems in the home, including HVAC and electrical wiring. These warranties usually also tell you how to carry out a repair.

It seems that when a house is brand new there is nothing to worry about because nothing in the house has been used or has worn, but even after a new build has passed the inspection, breakdowns can still occur. It is not uncommon for a new build home to have material or landscape problems due to housing developments.

The house guarantee generally covers materials and workmanship for one to two years and can cover some important systems for up to ten years. What these warranties don’t often cover are equipment, minor cosmetic repairs, and the cost of moving out for a few days if necessary while repairs are in progress.

Specific exclusions from most new home warranties that buyers should be aware of include:

  • Damage from neglect or abuse of the homeowner
  • Normal deterioration such as shrinkage within industry standards
  • Damage caused by external vandals or by natural disasters or “force majeure”
  • Items in the household that are covered by a manufacturer’s guarantee (devices)

Is a house guarantee worth it? – – External

How State Laws Can Affect Warranty

Some state laws specify what new home builders need to be covered by the warranty. To know if the state you live in has requirements, check with the contractor’s licensing authority or the Attorney General’s office in your state.

While it may seem like extra work, it is very important to read all of the warranty details that come with a new build home. When you need help understanding what’s on offer or understanding legal terms experienced buyer is a great source of help.