Implied vs. Written Structural Warranties: Which Is Better?

Implied vs. Written Structural Warranties: What’s the Difference?

All builders have obligations to guarantee the quality of the homes they build. At the very least, builders must abide by implied warranties. Alternatively, builders can provide written structural warranties to expressly state what they’re responsible for. But what’s the difference, and which is better? Let’s look at the differences and see why one type of warranty is by far the best.

What is an implied warranty?

An implied warranty is a guarantee that the houses you build will meet certain standards and expectations. These standards apply to the workmanship and habitability of the home. All 50 states recognize implied warranties for newly constructed homes. While this may seem straightforward, there are some caveats.

  • Implied warranties are not standardized. Although all 50 states recognize implied warranties, there is no standard form. Each state may have different expectations and interpretations on implied warranties. It’s your responsibility to follow them regardless.
  • They’re typically up to a court’s interpretation. Because they’re neither written down nor standardized, courts have a distinct say in how to interpret implied warranties. These court interpretations can be vague and unpredictable, which puts you at risk.
  • Despite these facts, you must still follow them. Imagine playing a game that you don’t know the rules to, but you’re still expected to follow them. You do your best to try to interpret the rules, but you’re never quite sure where you stand. And by the time you figure out whether you’re following them correctly, you’ve lost an expensive court case. If that gives you an anxiety-inducing, frustrating feeling, you aren’t alone.

Simply put, implied warranties can be a huge gamble for your business, your buyers, and your reputation. Fortunately, there’s a way to put the ball back in your court through a written warranty.

What is a written warranty?

A written warranty provides clearly defined performance standards on all of the homes you build. These performance standards apply to the workmanship, key systems (e.g., electrical, plumbing), and structure of the home. When you cover your homes with a written, insurance-backed express limited warranty administered by 2-10 Home Buyers Warranty (2-10 HBW), you take the guesswork out of what you need to guarantee. Here are just some of the benefits you get in a written 2-10 HBW structural warranty.

  1. Relief from financial risks. The average structural claim costs between $42,000 and $113,000. That’s bad enough on its own, but it’s especially bad if you build multiple houses in the same area. With a written 2-10 HBW structural warranty, you can take those financial risks off your books. So, if a house you build experiences a qualified structural defect, you don’t have to go back and solve it out of your own pocket.
  2. Sets expectations. Unlike an implied warranty, a written warranty sets expectations clearly. It establishes your responsibilities in writing, which clarifies those responsibilities for you and your buyers. When you purchase a 2-10 HBW structural warranty , it has the added benefit of providing neutrality. So, if you ever found yourself in court, you’d be using third-party language to make your argument, rather than your own. Courts tend to view self-written warranties as self-serving, which makes them more likely to rule in favor of the buyer.
  3. Third-party arbitration. A 2-10 HBW structural warranty includes binding arbitration language. This Supreme Court–backed arbitration language means that if you ever had a dispute with a buyer, you’d settle it out of court. That saves you time and money, and lets you do what you do best—build quality homes.

Which type of structural warranty is best?

A written, insurance-backed, express limited warranty is the best option. It eliminates the vagueness of implied warranties. It protects your bottom line and reputation against qualified structural defects. And it puts you and your prospects on even footing, knowing who’s responsible for what.

Implied warranties apply to all builders, but you can overcome them with a 2-10 HBW structural warranty. A 2-10 HBW structural warranty puts you back in control and gives you the strong foundation you need to protect the houses you build.

Learn how you can protect your business and add valuable selling points to your new builds with a 2-10 HBW structural warranty.

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