Builder Warranty Coverage and Exclusions
Builder Warranty Coverage and Exclusions
This domain tests how well you distinguish warranty items from homeowner-maintenance items and from conditions that most builder warranties exclude. The key rule is that the written warranty controls. Do not rely on memory of a typical warranty, and do not tell a client an item is covered.
Core concepts
- Builder warranties commonly cover defects in workmanship and materials for a limited period, with separate periods for systems and major structural defects. Many use a 1-2-10 structure, but limits, transferability, exclusions, and claim procedures differ.
- Common exclusions include normal wear and tear, cosmetic damage after closing, damage from neglect or improper maintenance, homeowner alterations, and damage from accidents or acts of nature. Some warranties exclude dampness, insects, or landscaping.
- Maintenance items include caulking, grout, paint touch-up, filters, grading that settles away from the foundation, and clearing weep holes. These are usually homeowner responsibilities even if they affect a warranty-related condition.
- The inspector documents evidence: location, size, photo, moisture reading if applicable, and whether the condition is active. The builder decides coverage.
Worked example
A client reports water staining at a window. The inspector finds deteriorated exterior caulk and a stain on the interior trim. The report recommends re-caulking as maintenance and further evaluation of the window flashing by a qualified contractor. Reasoning: caulk failure is often maintenance; hidden flashing defects may be workmanship. The inspector does not label the whole item covered or excluded because the cause is not fully visible.
Traps
Assuming all water intrusion is a builder defect; calling a maintenance item a warranty claim; overlooking exclusions for homeowner damage; and using absolute coverage language.