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The time to review your contractor’s warranty is not when the project has been completed. Many home owners will not even ask about the warranty until the job is done. It is wise to ask your contractor to allow you to review his warranty before signing any contract. Many contractors include it as part of their original contractor’s agreement.

If you are like most people, you have little or no idea what should be included in the warranty. You just know that if it’s broke, you do not want to pay to have it fixed. The warranty should tell you exactly what “it” is and under what conditions you will have to pay to have it fixed.

Contents of the Contractor Warranty

Every warranty is different, which is why you must carefully review each one. They will differ for renovations versus building a new home. Obviously, a simple renovation will not require as complex a warranty as a newly built home. Any warranty should specifically express the work that has been done and the quality grade, if not the brand, of material that was used, or that the materials were provided by the homeowner in such cases.

The warranty should indicate:

• Workmanship that is covered
• Materials that are covered.
• Time period over coverage (although there is no set time period, many contractors warranty a two year period, however that may be much higher for a brand new home)
• The date the warranty begins
• Which party is responsible for permits
• That the homeowner will be held harmless from any and all liens that may arise from the project

What will the Warranty NOT Cover?

A large portion of the warranty will consist of what the warranty will NOT cover. Some of the items that you can expect not to be covered are:

• Loss or damage not reported by the homeowner within six month of discovery
• Damage because of defective design
• Damage caused by installation or materials provided by the homeowner
• Secondary loss or damage such as personal injury or damaged property
• Normal wear and tear
• Damage from normal shrinkage within building standards
• Damage from poor ventilation within the existing structure
• Damage caused by alterations performed by parties other than the contractor
• Damage caused or increased by a homeowner’s negligence or ignorance
• Damage caused by acts of God
• Anything that homeowner’s insurance would otherwise cover
• Anything caused by the soil conditions, assuming the land was obtained through a third party

Again, much of the warranty will indicate what will not be covered by the contractor. If you take the time to review the warranty along with the contract before you sign it, this will give you an opportunity to discuss and negotiate with the contractor. It will also give you an opportunity to seek the council of an attorney if you feel it is beyond your ability to decipher it. However, once you have signed you no longer have the ability to amend any portion of the contract or warranty.

Any time that you hire a quality contractor to build a home, or perform any other kind of renovation, you will be required to sign an agreement. Signing any kind of agreement can be intimidating, and the longer and more involved the contract is, the more stressful it may be to sign it. However, you do not have to allow the contractor to be control of every aspect of the agreement. It is called an agreement for a reason. That is because both parties should agree to the terms as an instrument of protection for every one involved.

The Contractor’s Version

In a perfect world, you would author your very own contract to meet your desires and remain within the boundaries of your comfort zone. However, it is standard operating procedure that your contractor will insist that you must sign his agreement. While using an agreement that was penned with the contractor’s good in mind may be necessary, that doesn’t mean that you can not alter that agreement. Do not just blindly sign the agreement that the builder hands you without thoroughly reviewing it. A good builder will not have a problem with you keeping the agreement for a short period of time for review.

Basically, you have a right to strike any clauses that you are uncomfortable with, for example, "The owner agrees to pay any increases in labor or material costs which may come into effect after signature of the agreement". You may also make additions, most likely in the manner of an addendum to the contract. Should you be unclear as to the meaning of any phrases or wording, use wisdom and consult with an attorney.

What should be covered by the Contractor’s Agreement?

While a contractor’s agreement may have clauses and phrases that you prefer to delete, there are items that you will want covered in the agreement. Let’s look at some of them:

1. The scope of work that will be handled by the contractor, with anything that is not covered by the general contractor agreement very specifically laid out. This will make up a good section of a contractor’s agreement.
2. The payment schedule should be detailed and explicitly express whether the monies will be paid to the contractor by the owner or the financing institute, and upon what conditions.
3. Any change orders that occur during the progress of the project, and exactly how they will be handled.
4. Security.
5. Ownership of material.
6. Denote what constitutes interference and how it will affect the contract.
7. Define what will lead to mediation, jurisdiction, and arbitration, and exactly how it will be resolved. This manner of grievance resolution is much less costly than ending up in court; however court should be a last resort.

While signing any kind of contract can be a daunting task, you should know what to expect and have some idea what is not acceptable to you. Don’t hesitate to pay a few dollars to have a lawyer review and advise you regarding the contents of your builder’s agreement. It could save you thousands, not to mention headaches, in the long run.