Home Warranty Forgotten Benefits

A property inspector’s tip on the importance of knowing about your new home warranty. You’ve paid for it so why not be ready to use it if the need arises?

Based on all the new construction on the North Shore and Sunshine Coast, we thought a blog on this topic would be most timely.

Most of us know that when our electronics fail there is usually recourse to a 1 year warranty and sometimes we purchase that extended warranty too. We claim on the warranty because the item has obviously failed and immediately affects our use or enjoyment of the item.

Well new homes also carry warranties and in many cases the homeowners just let them lapse without action because when a house component or system fails, like foundation settlement, it’s silent and does not affect us immediately, so we forget about the puddle or damp in the basement or crawlspace. But the consequences of a building system or component failure may be very expensive to repair or replace.

Here in BC all new homes come with a mandatory 1-2-5-10 year warranty. The insurance is purchased by the contractor and then transferred to the owner. The warranty program is also transferable to a new buyer within the 10 year period.

Typically the 1 year warranty covers all labor and material, the 2 year is on mechanical systems, the five on the building envelope and the 10 year on structural.

The warranties are carried by various insurers. The warranty coverage varies from insurer to insurer unless state or provincial legislation apply. Most homeowners forget about the warranty and let it expire, sometimes to their detriment.

Here’s some suggestions for the owner of 2006 or newer property (as I’m writing this in 2016) should remember:

  • The homeowner has paid for the warranty in the purchase price and it’s just waiting to be exercised if needed. Find the policy and read it.
  • If there is a claim, it should be issued to the insurer no later than 6 weeks before anniversary expiry to make sure it gets to the right department in time. Remember there is no recourse for a claim that arrives one day after the anniversary, regardless of how worthy the claim may be.
  • The insurers follow rigid guidelines for claims and any claim is measured against the guidelines. The homeowner should know how to locate those guidelines. If you don’t have them, call the warranty provider for a copy or website link.
  • When a post-2006 home is up for resale, it’s worthwhile to have a record of warranty inspections and the findings. It will give buyers a lot more confidence that the seller has been meticulous in their care and maintenance of the property.
  • For that post-2006 home, it may be worthwhile for the listing agent to recommend to the seller to do both a pre-listing inspection and a warranty inspection at the same time. In a buyers’ market this can really set a listing apart.

Warranty inspections, something every homeowner should consider doing either themselves or with the help of a qualified inspector.

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