A building warranty is essentially an insurance policy for newly built homes. The warranty is taken out by the builder or developer but is in place to protect you, the buyer. Typically, building warranties last for 10 years.
What do they cover?
If you buy a home off-plan (i.e. before it is built) as is often the case with new builds, once you exchange contracts your warranty will cover your deposit against the firm going insolvent. This means if the builder goes bust and doesn’t start or complete the property your warranty provider will reimburse your deposit.
Once the property is built, the warranty is split into two periods – the defects insurance period, which covers the first two years, and the structural insurance period which covers years three to 10.
During your first two years in the home, if there are issues with the work the builder has done, such as the windows letting in rain because they’re not sealed properly or the heating not working because the pipes are faulty, the builder is obliged to come and fix them.
During the structural insurance period, the builder is only responsible for major problems with the structure of the house. This includes foundations, the external render, roofs, ceilings, chimneys and load-bearing parts of the floors.
Smaller ‘defects’ are now your own responsibility, including non-structural defects such as problems with your fixtures and fittings.
