A builders warranty is also known as a developers warranty or home builders warranty. It is a first party insurance policy that covers new build properties, commercial units & conversion schemes.
The builder or developer of the property typically takes out the warranty, with the builder being the insured party, and the property owner the beneficiary of the policy.
Typically, a 10 year builders warranty is split into two periods. The first two years is known as the defects insurance period. During this time, the builder is responsible for fixing any issues that may arise, this includes structural defects as well as workmanship issues. The second part is called the structural insurance period. During this time, the insurer is responsible for the cost of correcting any structural issues.
Those undertaking self build projects and intending to live in the property often see professional consultants certificate as a cost effective solution. We would advise that there are a number of considerations before opting for a non-insurance based product that may not actually protect self-builders should insurance be called upon.
At J3 Advisory, we only work with ‘A’ rated insurers’ that are accepted by all of the UK’s major lenders, helping your buyers secure mortgages and ensuring they are protected for the duration of the policy. Whether you are building homes, large apartment blocks or commercial projects to sell or rent, we are confident that we can help with a developers and builders warranty with the necessary level of cover.
10 Year Builders Warranty
The team at J3 Advisory have significant experience in arranging builders warranties for large projects, including a £50m mixed-use Sheffield residential development and 17m residential scheme in East London.
At J3 Advisory, we believe in partnering property professionals with the right insurers for their projects. So, while we don’t always go to every corner of the market, our experience, relationship, and networks ensure we have access to the right ones, ultimately saving our clients time and money.
When your next project does come into focus, we would be happy to talk through the scheme and offer our pragmatic and unconflicted advice on the right building warranty policy for you.
Home builders warranty FAQs
Rectifying structural defects can be both time-consuming and expensive – having a builders warranty in place offers peace of mind that should any defects be found, it will be rectified at no additional cost or having the need to show negligence.
Having this piece of insurance also makes the property more appealing to potential buyers, as they won’t be burdened with the costs of structural repairs within the warranty period.
Also, it is often a stipulation by mortgage lenders that such a cover is in place – this means that prospective buyers might have challenges securing a mortgage for the property without a builders warranty. Moreover, you could face challenges obtaining the necessary funds for the initial construction without the warranty being in place.
Although it is recommended to purchase a builders warranty before construction commences, a builders warranty can also be secured retrospectively.
During the initial two years post- practical completion, your builder assumes responsibility for repairs and addressing snags.
Starting from the third year, the warranty provider takes on the financial burden of structural repairs, such as roof replacement. This offers reassurance to potential buyers, sparing them from shouldering the expenses associated with these vital repairs.
A builder’s warranty typically covers defects and issues with a newly constructed home for a period after practical completion. While the exact coverage can vary, a typical home builders warranty covers:
- Structural Defects: Most builder warranties cover major structural issues, such as problems with the foundation, load-bearing walls, and the roof.
- Workmanship and Materials: This includes defects related to the quality of construction work and materials used in the home.
- Mechanical Systems: Warranties often cover issues with essential systems like plumbing, electrical, and HVAC (heating, ventilation, and air conditioning).
- Water Intrusion: Problems related to water leaks and damage, including damage from faulty windows or roofing, may be covered.
- Appliances and Fixtures: Some warranties extend to appliances and fixtures provided by the builder.
- Code Compliance: Builders are typically required to ensure that the home meets local building codes, and warranties may cover issues related to code compliance.
- Roofing and Exterior: Coverage can include issues with the roof, siding, and exterior components of the house.
- Dampness and Condensation: In some cases, warranties cover problems like dampness and condensation, but usually only if they result from builder negligence.
Natural wear and tear is often excluded from cover by a builders warranty. Also excluded from cover is damage caused by fire, smoke or issues arising from inadequate maintenance on part of the homeowner.
While there is no legal obligation to provide a builders warranty, the absence of one can notably impact your property’s appeal to potential buyers, as it will be challenging to secure a mortgage for its purchase.
The warranty cost is influenced by several factors, including the development’s size and location, the current stage of work, and the construction teams previous track record, to name a few.
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The defect liability period (DLP) lasts between 12 and 24 months from the completion of the construction work – depending on the contract. During this time, the builder is responsible for the defects that occur within your property and the surrounding communal areas.
During this defects liability period, also known as the ‘snagging period’, the builder is responsible for defects arising from workmanship, substandard materials, or other construction-related issues.
For homeowners, it is crucial to identify and report any defects to the builder to ensure their resolution within the defects liability period.
Yes, builders warranties are usually transferrable to the new owner of the property. Many home owners often take out a warranty if they intend to sell the property. When the sale is completed, the policy will be transferred to the new owner.
However, it is important to note that the warranty will not cover new structures or conversions in the property. If additional changes have been made to the dwelling, a new policy should be taken out.
Selling a property without a 10 year builders warranty can be challenging. Most lenders typically require this to be in place for any mortgage application to proceed – Alternatively, the absence of this warranty is likely to limit the pool of potential buyers for the property severely.
Should dampness and condensation problems arise because the builder didn’t o adhere to the warranty provider’s standards, the builders warranty might cover it.