From TVs to mattresses, many things you purchase come with a warranty, designed to protect the rights of the consumer against defects. This safety net ensures you’re not stuck with a defective product if things beyond your control go wrong, and a builders warranty protects you in much the same way.
While similar to home insurance, a builders warranty is slightly different. Where home insurance protects your belongings and home from fire, natural disasters, and other major calamities, a builders warranty protects you from defects within the construction of the home itself. Not all builder warranties are the same though, so it’s worth understanding exactly how they work.
Builders Warranty: The Basics
Though longer warranties exist, a builders warranty typically covers your new home for 8 to 10 years. Every new-build should come with a warranty, and if you’re searching for a brand-new home builder, it’s wise to only consider offers from contractors who will provide a warranty. In fact, the three Canadian mortgage insurance providers, Canada Mortgage and Housing Corporation (CMHC), Genworth Canada, and Canada Guaranty, all require new home builders to sign up for a warranty program in order to qualify for insurance on a high-ratio mortgage.
Different provinces and regions have different requirements for builder warranties with several requiring contractors to provide homeowners with a third-party warranty. Regardless of where they are in the country, all members of the Canadian Home Builders’ Association are required to offer a warranty as dictated by the terms of their membership.
While all warranties are unique, they typically follow the same basic structure of what’s covered. Generally, the warranty will be split into 2 sections. The first part covers defects in building materials or as a result of workmanship, and is sometimes known as a “latent defects warranty.” This typically covers faults in the plumbing, septic, electrics, waterproofing, windows, doors, HVAC systems, insulation, exterior sidings, and roof shingles. This section of the warranty often lasts about a year, which allows time for unknown material or workmanship issues to surface.
The second part of the warranty covers larger structural construction issues of your new home. This could be a sagging roof, a defective foundation, or unstable load-bearing walls. In the event of large repairs, some warranties cover temporary relocation expenses should you have to move out.
What’s Not Covered?
It’s worth knowing that when you buy a newly built house, building materials expand and contract in relation to the elements, and it can take some time before the building settles. During this time, it’s only natural to notice hairline cracks appearing on walls and ceilings. This is nothing to worry about and it’s not something that will be covered by the builder warranty. If the cracks grow larger, however, it could suggest a larger issue.
Things such as fading paint or scratched surfaces become apparent over time and are not covered, and neither are any blemishes caused by the owner. Additionally, appliances are also not typically covered by the builders warranty; however, they have their own manufacturer’s warranty that should have been passed onto you when you bought the home.
Making Your Builders Warranty Work
While it’s good to know you have a safety net should things go wrong, it’s not as easy as making a claim and the issue promptly getting resolved. Builders need to protect themselves against false claims and are entitled to dispute them. As such, it’s worth being sure that you cover yourself and take measures to prove that the builder is at fault.
Before moving in, you’ll typically have a walk-through inspection with your builder. At this time, your builder shows you how everything works and checks to make sure you’re happy with their work. Point out each and every defect you come across, no matter how small. Anything from sticking cupboard doors, to sloping floors should be discussed, and it should be agreed how they will be dealt with. Most homeowners aren’t experts on construction, so it might be worth having a professional home inspection before moving in.
Be sure to thoroughly read through your warranty, and take note of exactly what is covered, any clauses, and when it expires. Moreover, it’s worth inspecting your home again several months before the expiry date, to ensure any issues that could be lurking can be fixed under warranty.
As many as 1 in 100 new homes suffer defects within their first few years, so understanding your builders warranty is extremely important. Most problems are relatively minor, but it’s good to know you’re covered for more serious issues.