OPERATIONS: CONSTRUCTION WARRANTIES
Understanding Construction Warranties UNDERSTANDING THE COMPLEXITIES OF CONSTRUCTION WARRANTIES STRENGTHENS YOUR POSITION AS A DEVELOPER OR OWNER AND HELPS ENSURE YOUR PROJECT IS FINISHED TO QUALITY STANDARDS.
DAVID JACOBS
W arranties are a familiar concept to most people because they cover nearly all purchased goods and services. Construction projects are no different. There are multiple levels of warranties and guarantees general contractors, subcontractors, and material suppliers provide for all new construction projects. The terms of these warranties are important for both owners and contractors. They will be relied on to determine liability if something breaks or otherwise malfunctions after construction is completed. Warranty terms are determined by the construction contract and by general laws and regulations, which
can vary from state to state. Navigating the subtleties of warranties for a new construction project is important
is tied to a contractor’s reputation for producing quality work. It is typically offered on “fit-and-finish” items that may be specifically defined within the contract. It is especially important to owners because it provides initial protection from poor workmanship and ensures the contractor is obligated to repair any defective work uncovered during the warranty period. When negotiating the contract, owners should require that relevant sections regarding the warranty are clearly and thoroughly defined. Gray areas and unclear language in the contract are rarely resolved in the owner’s favor, so it is prudent to establish clear and specific parameters for
for owners of both residential and commercial properties. Here are some of the warranties you should understand.
THE 12-MONTH FIT-AND- FINISH WARRANTY The most common type of warranty residential and commercial contractors offer is the 12-month warranty. It is sometimes referred to as a contractor’s guarantee in the construction contract. Even where not required by law, this warranty is an industry standard and
44 | think realty magazine :: july - august 2024
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