Builder Warranty Inspection

The New Construction (Builder) Warranty

Long standing HUD federal lending regulations require a ten year, three-tiered warranty product be provided to buyers of new construction residential homes. The first year warranty period covers virtually the entire home; structural and mechanical systems and major components. The second year period comprises the two year warranty of mechanical systems (electric, plumbing, HVAC) and their major components. The full ten-year warranty period covers the major structural components of the foundation, major support components, and roof structure. As part of the home sale builders generally provide all warranty coverages whether or not federal guaranteed financing is used. Nonetheless, the homeowner should review their own builder warranty for particular coverage provisions and claim procedures.

The term, Builder Warranty does not necessarily mean the builder of a home is directly responsible to service the new home warranty. Typically, the builder contracts with a financial service (insurance) company to take responsibility for the risk and to ultimately service claims during the warranty period. Usually the builder is contractually responsible to the warranty company (not the homeowner) to directly service warranty claims during the first year period only. Usually the warranty company services the warranty directly from the second year forward.

Identifying deficient conditions for performance and material warranty claims is the sole responsibility of the homeowner. Neither the builder or warranty service company are obligated, nor would it make any profitable business sense to provide comprehensive inspections to identify faulty construction work or design deficiencies which could affect future performance of the home. Fortunately, there are readily available, independent resources to assist homeowners with identification of warranted deficiencies in new home construction before expiration of warranty periods.

The New Construction Warranty Inspection

The state licensed, professional real estate inspector has the legal and fiduciary responsibility to identify and report all deficiencies found in a home to the inspection client (i.e., homeowner). The independent, experienced inspector provides the ethical and knowledgeable services required to assess, communicate to, and benefit the homeowner with the ongoing responsibility of maintaining their real estate asset.

Inspections for new home warranty purposes average 3-4 hours depending on the scope of the inspection (regarding the particular warranty period). The warranty inspection assesses the home's structural components (foundation to the top of the roof and structural interior and exterior) and mechanical systems (electric, plumbing, and HVAC). The inspection findings are provided in a written report with pictures of deficiencies for the client's documentation and warranty claim purposes.

The Foundation Elevation Survey

The foundation is the supporting component for the entire structure. Owners of newly constructed homes have a unique opportunity to document the original condition of their home's foundation. North Texas, due to expansive soils and the extensive number of homes in the region is known for homes experiencing "foundation problems." Independent engineers, however, may advise that only a portion of those "problem foundations" actually require repair of some type, while others may only require a maintenance regimen or retrofit drainage work around the structure to limit further "problems." When foundation problems are experienced, subsequent engineering analysis often lacks the beneficial comparative data of original elevation measurements, preventing comparison of current elevation to the original foundation level .

The Foundation Elevation Survey provides measurement and documentation of the original level of the foundation. Original data is beneficial when comparing future measurements to determine actual movement of the foundation over time, making it particularly useful in anticipation of the 10 year Major Structural Warranty period. Original elevation measurement and data collection is only possible when the foundation is new (preferably within the first one to two years of construction).

The Foundation Elevation Survey results in  a topographical representation of the level of the home's foundation plane recording individual elevation measurements where measured throughout the structure. The graphic information is presented in the Elevation Survey Report provided to the inspection client.

Following are examples of just a few of the deficiencies found in recent (2019) new home warranty inspections.

Elevation Survey Report sample