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

When purchasing brand new construction homes, they are often covered by a warranty for about the first one or two years of ownership. It is not uncommon to see some new housing developments advertise that they offer a builder’s warranty. Some of these warranties are backed by the builder and others the builder may purchase the warranty from a third-party company for you.  

If a warranty is offered with your brand new construction home it is a good idea to look it over carefully so that you are aware as the homeowner exactly what the warranty includes and what you can do if a problem should occur. It is also very important to be aware of any owner responsibilities or requirements to uphold the warranty and keep it valid.  

All VA and FHA loans require that a brand new construction home carry a warranty before the loan will be approved. Having a builder’s warranty is sometimes what encourages buyers to purchase new construction over a resale home.  

What is Covered in a New Construction Warranty?  

Warranties for new homes are limited as to what they do cover. The main purpose of a warranty for a new construction home is to cover the workmanship and  the materials used to build the home. Most warranties will focus on the main systems in the home including the HVAC and electrical wiring. These warranties also usually state how a repair is to be made.  

It would seem that when a house is brand new that there wouldn’t be anything to worry about, because nothing in the home has been previously used or seen any wear and tear, but even after a new construction home passes inspection there can still be mishaps. It is not unheard of for a new construction home to have defective materials or landscaping issues due to settling.  

Home warranties generally cover materials and workmanship for one to two years and can cover some major systems for up to ten  years.  What these warranties do not often cover is appliances, small cosmetic repairs, and the cost of moving out for a few days if needed while repairs are made.  

Specific Exclusions of Most New Construction Warranties that Buyers Should Be Aware of Include: 

• Damages as a result of homeowner neglect or misuse 
• Normal deterioration such as shrinkage within industry standards 
• Damage caused by outside vandals or by natural disasters or “acts of God” 
• Items in the home that are covered by a warranty from the manufacturer (appliances) 

Is a Home Warranty Worth It? - External

How State Laws Can Affect Warranty 

Some state laws will have requirements as to what needs to be covered under warranty by builders of new construction residential developments. If you would like to know if there are any requirements for the state in which you live you can find out by contacting the contractor licensing board or the Attorney General’s Office in your state.  

Though it may seem like extra work, it is very important to read all of the details of the warranty included with a new construction home. If you need help understanding what is being offered or making sense of legal terms an experienced buyer’s agent is a great source of help.