What Does A Builder Warranty Cover?
For most of us, our homes are the most expensive purchase we will ever make. Many people opt to buy new construction in the hope they will have a new home, free of defects and with the latest in energy efficiency. We assume if problems are found, the builder will fix the issue promptly and without reservation, but as you will learn herein, you should not assume you understand what is really covered under a “builder warranty”.
First, Florida statute 718.203 requires the builder to provide a limited warranty covering the roof, structural and plumbing elements for up to three years, and all other components up to one year after a Certificate of Occupancy is issued. This statute also provides “these warranties are conditioned upon routine maintenance being performed unless the maintenance is an obligation of the developer or developer-controlled association”.
Florida statute 95.11 (c) further defines specific timeframes where homeowners can sue builders for latent construction defects. Generally, the law allows up to four years from the time the defect should have been discovered but no later than ten years after ownership of the property. The four-year limit is referred to as the “statute of limitations” and the ten-year limit is referred to as the “statute of repose”.
Understanding Florida Law
Homeowners who ultimately find they have no recourse other than litigation should also be aware of Florida law regarding notice to the builder. As of July 1, 2019, property owners must file a lawsuit within the statute of limitations to be recognized by the court. Simply sending a certified letter to the builder is no longer sufficient as notice under the law although it can serve to prove the defect was not related to “homeowner neglect”. If your problem involves latent defect construction, you should speak to an attorney as soon as you become aware of the issue.
Florida law also allows a builder to assign your home to a third-party, warranty company after the first year. This provision is often included in your owner-builder contract. While the builder is still ultimately obligated for latent defective construction, issues related to non-structural concerns are now the responsibility of the warranty provider and you must deal with them. The Federal Housing Administration and Veterans Administration require builders to provide third-party warranties on newly built homes with FHA or VA loans.
Common New Construction Repairs
What most new construction buyers don’t understand is specifically “what is covered” and “how repairs will be made”. The biggest shock to most homeowners is in finding out the builder or warranty company is not obligated to “make it look new”. The National Association of Home Builders provides a reference for repair guidelines in the Residential Construction Performance Guidelines document and the majority of builders use it or have similar guidelines they follow. Here are some common repairs found in new construction along with the builder’s obligation to make repairs:
|Roof leaks (non-storm related)||1 year|
|Leaks caused by wind-driven rain||None|
|Cracks in siding, trim, or stucco||1 year||up to 3/8”|
|Cracks/dents in vinyl siding||None|
|Gutters||1-year||up to 1” standing water|
|Delamination of veneer siding||1-year|
|Masonry cracks||1 year||up to 1/8”|
|Efflorescence in paint||None|
|Water absorption in stucco/veneer||None|
|Chimney separation||1-year||up to ½” in 10 ft|
|Door panel splits||1-year||1-time|
|Leaking window seals||None||Manufacturer warranty|
|Foundation is not level||Maybe||up to ½” in 20 feet|
|Slab separation at control joints||None|
|Slab is uneven||Maybe||up to 3/8” in 32”|
|Slab cracks||Maybe||up to 3/16” wide/depth|
|Block wall is bowing||Maybe||up to 1” in 8 ft.|
|Structural column is bowed||Maybe||up to ¾” in 8 ft|
|Wood sub-floor is not level||Maybe||up to ½” in 20 ft.|
|Cracks in garage slab||1-year||up to ¼”|
|Uneven floors||1-year||up to ¼” in 32 feet|
|Separation of stoops/porch||1-year||up to 1”|
|Fireplace inserts/cracks in fire brick||None|
|Door warpage||1-year||up to ¼”|
|Drywall nail pops||1-year||1-time|
|Bowed walls||1-year||up to ¼” in 32’ horizontal, up to 3/8” in 4’ vertical|
|Cooling variations||1-year||up to 15 degree differential|
|Mechanical breakdown||None||Manufacturer warranty|
|Kitchen appliances||None||Manufacturer warranty|
|Water heater||None||Manufacturer warranty|
These are examples of what the National Association of Home Builders recommends in the Residential Construction Performance Guidelines, 4th Edition. Your builder may have differing policies on what constitutes an allowance or repair. Some components such as roof coverings, HVAC units, water heaters, garage door openers, doors, and windows should include a manufacturer’s warranty. You should make sure you understand what components have an extended warranty beyond the first year of ownership.
As you can see, Florida law requires specific action within specific timeframes to make claims against homebuilders for defective construction. Few homeowners can navigate this procedure on their own. Builders are allowed tolerances in construction, and they are allowed to make superficial repairs that may not satisfy some homeowners. The bottom line is, once it’s done, it’s done and now the burden is on you to get the issue resolved.
Protect Your Investment
The best protection a buyer of a newly constructed home has is to hire a construction/owner’s representative to perform phase inspections during construction. The local building department does an excellent job in inspecting plumbing, electrical, and footers but they don’t check elevations, framing, stucco, and a whole lot more. The key to having your own construction representative is to avoid major defects later. Suing a builder for latent defects can easily cost you $30,000 in legal fees or more and the outcome of your suit is not guaranteed.
If you choose to protect yourself with a construction/owner’s representative, understand you will need a representative with proven knowledge and experience in residential construction. The representative should be knowledgeable in building codes and have a general contractor’s license. Don’t make the mistake of hiring a home inspector. A home inspector can check finishes and document visible defects, but they have no qualifications to inspect new construction or perform building code inspections.
For a complete and qualified inspection of the primary phases of construction, you should expect to pay a qualified construction representative 1% to 2% of the build cost, on average. The construction or owner’s representative works for you. They are your eyes and ears on the ground who will ensure your home is built to plan, that materials meet specifications and the workmanship is sound. Your representative will oversee contractor draws to make sure you have not overpaid the contractor and they will track important things like notice to owner and lien filings to make sure you don’t pay twice!
If you are considering hiring a builder to build your next home, talk to us first. At the very least, we’ll review your contract and help you understand the pitfalls many owners unwittingly trap themselves into.
Qualified New Construction Inspectors
Property360 provides construction/owner representation on residential construction projects throughout northeastern Florida including Jacksonville, St. Augustine, Ponte Vedra Beach, Callahan, Macclenny, Fernandina Beach, Amelia Island, and more. We also offer termite inspections, mold testing, and forensic moisture investigations. Contact us at (904) 606-1570 or request service online today!