It's the most expensive purchase you'll ever make. So you might assume your new or newly-remodeled home comes with a warranty. The fact is builders in Washington state are not required to back up their work with a warranty.
"Homebuyers in our state have little or no rights," says State Senator Brian Weinstein, D-Mercer Island. "If the home is defective, if there's structural problems, water damage, anything like that, they have no rights."
Senator Weinstein authored a bill (SB 5550) that would establish a homeowner's bill of rights. Representative Brendan Williams, D-Olympia, is the primary sponsor of a similar bill in the House (HB 1935).
"What we're doing is ensuring that the American dream of owning a home doesn't become a nightmare," Rep. Williams says in a news release.
If approved and signed into law, builders in Washington state would be required to provide a minimum warranty that the structure is:
- Free from defects in materials and workmanship for two years
- Free from defects in the electrical, plumbing or heating/air conditioning systems for three years
- Free from defects that permit, or without repair will lead to water penetration for five years
- Free from any structural defects for ten years
"This appears to be a solution looking for a problem," says Sam Anderson, Executive Director of the Master Builders Association of King and Snohomish Counties (MBA). "If there's a problem, let's figure it out what it is before we run off with a solution that could adversely effect everybody in the long run."
Those who support the bills to give home buyers better protection insist there is a problem. They point to a report from Criterium Engineers. The company inspects homes in 35 states, including Washington. Their 2006 Quality Survey says 17 percent of new homes have significant problems.
- 23 percent have a roof problem
- 24 percent have inadequate framing
- 19 percent have siding problems
- 16 percent have faulty foundations
The report says, "framing problems have become more significant." Water intrusion continues to be the number one problem "with poor insulation of roofs and windows the primary cause."
Many builders voluntarily give buyers a limited warranty. In fact, MBA members are required to give the buyer a minimum one-year limited warranty. Critics, such as Seattle attorney Sandy Levy, say these warranties are filled with loopholes and exclusions.
"These warranties look good on the surface, he says, "but you get better warranties for toothbrushes, toasters, waffle makers and cars." Levy supports both bills in the Legislature.
Builders say a mandatory warranty would be bad for them and potential homebuyers.
"Our insurance rates would probably go up or would be unavailable," says builder David Main, owner of Main Street Builders of Enumclaw. "In either case, the higher costs would be passed along to the consumer."
Sen. Weinstein sees things differently.
"I don't see why it should drive somebody out of business to stand behind their work," he says. "And I don't understand how it would drive any good builder out of business."
"Certainly no one wants to put homebuilders out of business," Rep. Williams notes in his news release. "We cannot, however, protect the bad apples among them at the expense of home buyers."
The MBA's Sam Anderson calls the proposed legislation "the trial lawyers' dream bill" that will not benefit homebuyers or homebuilders.
Attorney Sandy Levy, who represents both buyers and builders, calls that ludicrous. He says a mandatory warranty "will improve the overall quality of construction and provide homeowners with meaningful warranties, so they don't lose their life savings."
"The poorer builders who have claims against them, their insurance costs will probably go up and they should go up until they go out of business or they learn to build properly." Levy says.
The Homeowners Bill of Rights is out of committee and awaiting votes in the House and Senate.
If you want to let lawmakers know how you feel about this bill, now is the time to contact them or call the legislative hotline at 1-800-562-6000.
Read the Fine Print
You buy a new house. And your builder gives you a warranty.
So, you figure if anything goes wrong, you're covered. But it doesn't always work that way.
That's why the state lawmakers are considering a homeowner's bill of rights that would give homebuyers better warranty protection.
Builders insist you don't need that.
I've been reading the fine print in these warranties, including the most common ones given to new homebuyers in our state. They all have one thing in common: they're full of exclusions - long lists of things that are not covered.
I was amazed at how little protection they really give you.
That's because the home warranties builders provide are filled with exclusions. In most cases, they don't cover: non-load bearing walls, plaster or drywall, flooring or sub-flooring, brick, stucco, stone, or veneer, any type of exterior siding, roof shingles, heating, cooling or ventilation systems, plumbing, electrical or mechanical problems, appliances or fixtures, doors and cabinets, paint or stain.
You think that's bad? Get a load of this. Many builders here use a warranty from the Residential Warranty Corporation.
It states, "failure to complete construction of the home or any portion of the home, in whole or in part, is not considered a defect" covered by the warranty.
That's right. If they forget to build the garage, it's your problem.
One more thing to consider - by accepting these warranties, a homeowner agrees to arbitrate any dispute and to pay for that arbitration. You also give up any right to sue the builder. That limits your options if the builder doesn't come back to fix a problem that is covered by the warranty.
For More Information:
State Senator Faces Off Against Builders
Senate Bill Report SB 5550
House Bill Report HB 1935
http://www.komotv.com/news/consumer/6325837.html
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