Warranty
isn’t a popular topic with contractors. Warranty claims come in two sizes, expensive
and even more expensive. Worse, no one wins a warranty dispute. And there’s almost
nothing a contractor can do to avoid warranty claims. Better to cross your fingers
and ignore the subject.
If
that’s how you feel, keep reading. I’ll offer another viewpoint.
No
too long ago I took a call from a contractor in a dispute with a condo association.
The contractor had laid pavers around the perimeter of their complex. It was a big
job and the condo Board was pleased – at first. About two years later the pavers
started to “pump” where trash trucks made stops. The association claimed the pavers
weren’t laid to spec. They hired an engineer and a lawyer and demanded that the
entire job be torn out and done again –at the contractor’s expense. The job had
passed every inspection, including soil density tests. But the original contract
didn’t say anything about warranty. Obviously, the contractor needed help.
Warranties
come in two flavors, express (written
in the contract) and implied, either by
court decisions or by statute (state law). All states enforce the terms of any express
warranty in the contract. Most states also require that residential construction
be done in a workmanlike manner. That’s an implied warranty. It’s not part of the
contract and is separate from any written express warranty. The term and coverage
of implied warranties will be whatever a court decides on a case-by-case basis or
whatever state law requires.
Warranties State-by-State
Many
states restrict or limit any attempt to disclaim the implied warranty of workmanlike
construction, especially on residential jobs. For example, Kansas
imposes a fine of up to $10,000 for trying to disclaim an implied warranty of fitness
for purpose. Other states permit a contractor to disclaim implied warranties if
wording, type size, and placement in the contract are just right.
Minnesota’s
statutory warranty has to be written into every residential contract – three paragraphs
of very precise language. The warranty runs for one year on materials and workmanship,
two years on plumbing, electrical and HVAC and ten years on any "major construction
defect".
California
makes residential builders liable for a long list of construction defects. The builder
has to either make repairs or compensate the owner for the loss – including relocation
and storage expense. The warranty expires in either one, four or ten years unless
another expiration period is in the contract.
Pennsylvania
law implies a warranty of good workmanship -- what's reasonable under the circumstances,
not perfection. An implied warranty of habitability is breached if a defect presents
a “major impediment to habitation”.
New Jersey
provides an express Home Owners Warranty (HOW) to all buyers of new homes. Every
new home sold in New Jersey comes with a limited warranty against construction defects
for up to ten years. Home builders in New Jersey are required to enroll in either
the state warranty plan or a private warranty plan approved by the state.
Georgia’s
Written Warranty Act requires that contractors deliver a written warranty before
starting any residential work valued at over $2,500.
Every
residential job in both Florida
and Texas
comes with an implied warranty of good workmanship and habitability. But contractors
in both states can disclaim all warranties if the contract leaves no doubt about
what’s covered and what’s not.
In
New York,
the implied warranty requires that work be done with reasonable care and competence.
Any attempt to disclaim that warranty is unlikely to work.
So what’s a contractor
supposed to do?
My
advice is to be pro-active. Don’t have your warranty dispute end up on some desk at two law
firms. Write an express warranty into your contracts. Identify exactly what’s covered
and what’s excluded. That would have saved my friend the paving contractor thousands.
In his case, pavers were subsiding where water from yard sprinklers drained across
the pavement. A written warranty excluding damage from standing water would have
saved at truckload of grief.
