Home Builder Warranties

New Home Warranties for Newly Built Homes

For many people, a home is the most expensive purchase they ever make. It’s no wonder, then, that buyers of newly built homes are interested in warranties, which promise to repair or replace certain elements of the home, if necessary, within a certain time. According to the Federal Trade Commission, the nation’s consumer protection agency, if you’re considering a home warranty it’s important to understand what it covers, how to make a claim and the process for resolving disputes that may arise between you and the builder or warranty company.

Many new home warranties are backed by the builder, which is typically the case with builders of homes who are members of the Wichita Area Builders Association. Some home owners purchase additional coverage from a third-part warranty company to supplement the coverage their builder provides. These add-on service contracts are commonly called warranties. The Federal Housing Administration (FHA) and the Department of Veterans’ Affairs (VA) require builders to purchase a third-Party warranty as a way to protect buyers of newly built homes with FHA or VA loans.


Warranties for newly built homes generally offer limited coverage on workmanship and materials relating to various components of the home, such as windows, heating, ventilation and air conditioning (HVAC), plumbing, and electrical systems for specific periods. Warranties also typically define how repairs will be made.

The duration of coverage varies depending on the component of the house. Coverage is provided for workmanship and materials on most components during the first year. For example, most warranties on new construction cover such things as siding and stucco, doors and trim, drywall, paint and other such items during the first year. Coverage for HVAC, plumbing, and electrical systems is generally two to three years. Major structural defects, sometimes defined as problems that could make a home not safe to live in, but very seldom occur, are handled in accordance with provisions contained in a Kansas state law commonly referred to as “builder right to cure”, before any legal action can be commenced. If such were to occur, the use of an attorney is recommended.

Warranty Claims

What should you do if you have a defect in your home that may be covered by your warranty? First, read the warranty or service contract to make sure that your problem is covered. Pay particular attention to the duration of specific types of coverage. Next, file your claim according to the instructions in your warranty, and put your requirements for repair in writing, even if the company provides a hotline for urgent requests. Request a return receipt, and keep a record of your correspondence and conversations with the company. Chances are your claim will be handled amicably and to your satisfaction, but if a dispute arises, it’s good to have a record of your dealings with the builder and the warranty company.

Resolving Your Dispute

Occasionally, a dispute can develop between a home owner and a builder or third-party company over whether a defect is covered or whether repair work was done properly. Many warranties on newly built homes provide for mediation of disputed warranty claims, followed by mandatory binding arbitration. If mediation is an option, a neutral third party – a mediator – helps the homeowner and the company resolve the problem by facilitating discussion between both parties. It is up to the home owner and the company to reach an agreement.

If mediation fails to resolve the dispute, it is likely that the homeowner would be required to submit any claim to arbitration, instead of going to court. In this process an “arbitrator” or panel of “arbitrators” makes a decision and/or award once the participants present their cases. Some warranties allow home owners to pick an arbitrator(s) from a list acceptable to the builder or the third-part company who are qualified to perform the duties and responsibilities of arbitrators.

Arbitration is less formal than court, although the home owner and warranty company may appear at hearings, have legal representation, obtain documents from one another, present evidence, and question each other’s witnesses. Most warranties require that both parties abide by the arbitrator’s decision, without appeal. If your home loan is financed through FHA or VA and you file a claim against the third-party warranty company, you can choose between arbitration or going to court. If you choose arbitration, be aware that you are bound by the decision. More details are available from the FHA or VA.


Although arbitration is generally less expensive than going to court, homeowners can expect to pay costs incurred to take the claim through the process which will vary in amount based on the complexity of the arbitration. Read you warranties carefully to determine what arbitration costs or expenses the homeowner is responsible for and what costs or expenses the builder must pay.

For More Information

To learn more about warranties in newly built homes, contact the Wichita Area Builders Association. If you have a loan insured contact FHA, contact the closest U.S. Department of Housing and Urban Development field office for more information, or visit hud.gov . If you have a VA loan, you can contact the nearest VA office, or visit homeloans.va.gov.

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