Last week I got a question from a contractor
who had read the June 2016 Consumer Reports article on home improvement. He told
me that nine out of 10 contractors in the CU article claim to offer a written guarantee
of their work. He wanted advice on the guarantee he should offer. My answer: “Fine.
We can work up a written warranty. But understand that all your jobs come with a
warranty already – even if you never breathe a word about it in the contract.”
Here’s why that’s a true statement. Forty-six
states and the District of Columbia impose an “implied” warranty on contractors
on nearly every construction project. Just by taking a job, you guarantee work will
be done using customary skill and care, will comply with accepted standards and
the finished project will be reasonably fit for the intended use.
Who enforces that warranty? Courts in
every state decide construction warranty claims on a case-by-case basis. Exactly
what meets state standards and how long the warranty lasts are a question for the
judge and jury. Some states (AZ, CA, RI, SC) publish a list of construction standards
– defining what constitutes a construction defect. Other states (DE, KY, LA) consider
anything that doesn’t comply with the building code to be a defect.
Is there any way to avoid this implied
warranty? Yes. That’s called a “disclaimer” of warranty. A carefully worded disclaimer
will be enforced in most states if clear and conspicuous (bold type, upper case,
“as is,” etc.), especially if the defect in question is part of the negotiations
and will be obvious to the buyer. But don’t try to include a disclaimer in every
construction contract. That won’t work.
Four states don’t imply any warrant.
Instead, GA, ME, MN and NJ require contractors to give an express (written) warranty:
Georgia requires a written warranty on single-family and duplex dwellings. See my
blog post of March 31, 2009 for details. Maine requires a written warranty for residential
jobs over $3,000. Minnesota requires a guarantee on materials and workmanship for
one year, plumbing, electrical and HVAC for two years and structural components
for 10 years. New Jersey contractors have to include a written guarantee with each
bid.
What About an Express Warranty?
All states permit express written warranties
in addition to the warranty required by state law. Here are the options if you want
to offer more than the minimum warranty. These are listed in order of the least
risk to the most risk to the contractor:-
When you install materials, equipment or appliances that come with a written manufacturer’s warranty, pass warranty documents to the owner.
- Offer a warranty on named components. For example, the roof won’t leak for five years or cabinet doors won’t sag for 10 years. Construction Contract Writer offers a good choice of warranties for 40 construction trades – everything from asphalt paving to windows and for any period you select.
- Offer a warranty on all material and workmanship. For example, “Contractor warrants that the work shall be free of defects due to faulty material or workmanship for the period specified in this agreement.”
- Offer a broad form warranty. This is the warranty usually required on public works projects: “Contractor warrants that work performed under this contract shall conform to the contract documents and be free of defects in material, design furnished and workmanship performed by contractor or any subcontractor or material supplier for the period specified in this agreement.”
