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Pete Mackey
Pete Mackey
Attorney • (800) 574-4332

A New Home Warranty May Not Be All That You Think It Is

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Youare buying a brand new home.  Youare excited – you should be.  Atclosing, the builder hands you a warranty on your new home.  It may have been mentioned back whenyou first spoke with your builder, but you cannot remember.  In any event, what’s not to like aboutgetting even more protection on what is probably the biggest investment youwill ever make? Depending on the warranty provided, you may be getting lessthan the builder is legally obligated to provide had you not accepted thatpiece of paper. 

 

InAlabama, your builder was required to follow the building code adopted by yourCity or County.  In turn,inspectors with the City or County came out during construction and looked ateach step in the process to make sure it was in compliance with thosecodes.  In addition to thosebuilding code and permit requirements, Alabama requires a builder to build ahome in a good and workmanlike manner. That is the “Standard of Care” that each builder must follow.  Most builders do a good job, take pridein their work and go the extra mile for their customer.  Some do not.

 

Why,then, should you be careful about accepting a new home warranty? Well, read thedocument.  It may have an arbitrationclause.  If it does, you are givingup your right to a trial by jury in the event that problems arise that are thebuilder’s responsibility.  Therequirements for reporting problems or defects, and the time frame for doingthat reporting, may be less than what the law requires without a warranty.  Finally, you may be agreeing to limityour damages that you could recover in the event that you make a claim againstyour builder. 

 

Werecommend that you think hard before you accept a new home warranty in theState of Alabama.  You may begiving up legal rights by accepting that warranty.  If the builder tells you that the warranty that he or she isproviding gives you added benefit, ask if they are willing to add the followingas a term – “the warrantor agrees that this warranty provides all rights andremedies available to the purchaser under the law of this State and, to theextent that it does not, the law of this State will prevail in each suchinstance.”

 

Wewill be happy to review any new home warranty that you offered, at no cost,and give you our opinion on where you stand.