Builder’s Warranty

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Warranty Administration

We previously touched on 2-10 HBW’s role as the Warranty Administrator. When a homeowner contacts Warranty Administration in year one or two of their warranty to report a possible defect, the first question asked is: have you notified your builder? It is not uncommon for the homeowner to be a little confused by this question because after all, aren’t we the warranty company? At that time, we explain 2-10 HBW is the Warranty Administrator, but it is the builder’s warranty to service in the first two years.

Do you know why this is the builder’s warranty?

Warranty Content

One of the core principles of the 2-10 HBW New Home Warranty Program is that it is the builder’s warranty. Warranty Section I.B. states:

  1. “Builder/Seller means the Home Builder/Seller listed on the Certificate of Warranty Coverage, and is the person or company providing You with this express limited warranty.”
  2. “Certificate of Warranty Coverage is the document issued by 2-10 HBW confirming that Your Builder/Seller took all steps required to make the express limited warranty on Your Home effective”

Understanding the Builder’s Warranty

Taking these definitions together, the answer to the question above becomes clear. Why is this the builder’s warranty? Because the builder built the home. By enrolling a home with a full 2-10 warranty, the builder/seller is telling the buyer the home will be free from defects in the applicable workmanship and materials for one year, free from defects in applicable Systems for two years, and free from Structural defects for ten years.

Furthermore, with regard to the one and two year coverages, by executing the Member Proposal and Agreement (MP&A) required to become a member, the builder/seller has agreed the correction of Workmanship/Systems Defects is their responsibility. I have added emphasis because this is a concept Warranty Administration often has to remind builders of, particularly when they direct their homeowners directly to 2-10 HBW within the first two years. In addition to promising a home free from Structural defects to the buyer, the builder/seller is also promising it to the Warranty Insurer, and this why the builder/seller’s 10 year liability for Structural defects is transferred to the Warranty Insurer via the insurance backing documented in the Insurance Policy under Coverage C and in section three of the MP&A.