New Home Warranty Explained

Many people assume that a new home warranty is “bumper to bumper” and do not take the time to understand what the warranty covers, how claims are filed and how disputes are resolved.  Although each San Antonio area builder’s warranty may vary, it is fairly common to see the builder cover those items not covered by the manufacturer’s warranties during the first year and in the second year, coverage would be limited to HVAC, plumbing, or electrical matters.  In years 3-10, the warranty would be provided by a third-party Home Warranty Company and cover major structural defects. Most builders will take the time to demonstrate a new home and cover basic homeowner maintenance because without such maintenance, a new home warranty may be voided.  Wall leakage due to caulk shrinkage is a purchaser’s maintenance item, for example.

Typical Example New Home Warranty Coverage in First Year

• Leak in roof.  If not caused by purchaser neglect, probably covered under a typical new home warranty.
• Large cracks in masonry/concrete–only if greater than 1/4 inch, typically.
• Standing water in yard.  If it’s standing there for more than 24 hours or swales for 48 hours, will probably be fixed.
• A bulging wall (in excess of 1/4 inch within a 32 inch measurement), typically would be corrected under a new home warranty.
• Large area of floor squeaks, Probably yes.  An isolated floor squeak, probably not.
• Uneven floors and excessive sloping will probably be fixed to standard.
• Loose siding due to improper installation will typically be corrected.
• Peeling paint, probably will repair.  Fading paint, probably not. mildew and fungus on siding is typically not covered.
• Glass breakage not covered under a typical new home warranty.
• Condensation and frost on windows, not typically covered under a new home warranty as this is caused by temperature differences.
• Hairline cracks, seam or tape cracks in interior walls and trim typically not unless very excessive. Cracks exceeding 1/8 inch may be repaired once.  Important to read your warranty.  The crack in the interior wall shown in the picture above is the width of a fingernail, which is not very thick but is very obvious to someone looking at the wall.
• Carpet seams that show, typically not covered.  If a gap at the seam appears, that might be covered.
• Cracks in ceramic tile grout is common and not typically covered.
• Loose or bubbled floor typically covered under a new home warranty.
• Delaminated counter top materials will typically be corrected.
• Minor “warpage” is common in cabinet doors and drawers.  In excess of 1/4 inch probably covered.
• If the cooling system or heating system is broke will fix, however, the warranty may have coverage limitations such as it may say rooms temperatures may vary by 3-4 degrees and in case of excessive outdoor temperatures a 15 degree difference is acceptable.  Read fine print here and remember to change filters.
• Plumbing leaks caused by material or workmanship will be corrected but noisy pip caused by expansion and contraction from water flow may not.
• Electrical outlets, switches or fixtures that fail due to defects may be fixed, but overloaded circuit breaker trips not.

Manufacturer Warranties

At closing, the purchaser should get appliance booklets and the warranties are typically listed in the back of each booklet.  There is usually a telephone number where the buyer calls for service for the new home warranty.  The AC and Heating system, plumbing fixtures, water heater, carpet, ceiling fans, countertops, doors, fireplace, garage door, lighting, roof shingles and security system are typically covered.  Each warranty differs. Some are for one year, some for five years, and some for much longer.  Some warranties only covers part of the item.  For instance, the ceiling fan may have a  warranty for five years but the warranty only covers the motor.  A carpet warranty may come with a “wear” warranty and a “stain” warranty and the stain warranty may cover only certain types of stains such as food and drink.  Window warranties:  Some window warranties provide, say, a ten year warranty against moisture in glass due to seal failure, but after the first year there is a labor charge for replacement. Some warranties are transferable to a new buyer.  Buyers will always ask if the roof shingle warranty is transferable and it is helpful to have the paperwork to determine in the warranty is transferable.

Ten Year Coverage

In years 3 through 10, there may be some manufacturer warranties on specific systems still in effect, but other than that the home is warranted for habitability and major structural systems.  The Federal Trade Commission provides further details on new home warranty. It is a good idea to put all your warranty paperwork in a designated place so if the oven goes out, there is no delay in initiating a call while your appliances is covered by a new home warranty.

New Construction Defects

While it is comforting to buy a home with a new home warranty from a reputable builder, it is important to realize that a good builder can end up using a bad sub-contractor from time to time.  Or if your home is being constructed right before the holidays, perhaps a labor shortage has resulted in a crew not used to working together and the plumber makes inappropriate cuts in the framing, undermining the strength of a wall.  Just because a home is new does not  mean it is free of defects. If your home is located in San Antonio, a city inspector will make certain inspections but they are not there to judge the quality of the workmanship but rather to evaluate compliance with code.  A home buyer can help protect himself or herself by attending all meetings requested by the builder and inviting an experienced third-party inspector at key stages of the home construction process such as during the framing stage.  Although there is more than one way to build a house and the inspector and builder may disagree at times, it is important to reduce the potential for major errors.  Getting a copy of the home inspection report into the builder’s hands right away is critical.  It is best to have the inspector send it to the project manager or superintendent directly. A good builder will correct things that are defective or built in a sub-standard capacity because today,  more than ever before, they care about their reputation.  It helps to have a home inspector who is very experienced at evaluating new construction foundations and framing because the things they look for at the framing stage are different than what they look for on an existing home where the walls are already sealed.   Besides being attentive to the construction process on your new home, you can do one important thing to reduce the potential for construction defects.  You can decide on changes to your house at an early stage of the construction so last minute change orders are not necessary.  Last minute change orders increase the probability of mistakes.