A warranty may, or may not, avert a new-home nightmare
If you buy a $5 shirt and then change your mind,
chances are the merchant will give you your money back, no questions
asked. And if the new car you buy doesn't run right, a lemon law is
likely to protect you.
But, new-home buyer, beware. While purchasing a brand
new house is the costliest expenditure many people will ever make
in their lives, the home-building industry has a no-return, satisfaction-isn't-guaranteed
Sure, every state has building codes and permitting
processes that attempt to ensure that a new home is safe and livable
before a buyer takes possession. Code inspectors, however, don't
always spot big problems and a recent look into new-home construction
by the New Jersey State Commission of Investigation found that the
worst problems rarely surface within the first year.
On the business side, most successful builders try
to do right by their customers. After all, as the National Association
of Home Builders points out, if a builder gets a bad rep in a community,
his business is in jeopardy.
But despite government and industry efforts, once
a new-home sale closes, any problems become the home buyer's, a
pretty daunting thought for someone already facing a mortgage, moving
hassles and decorating decisions. This is where new-home warranties
are supposed to come in, to ease buyer worries and provide a recourse
to get problems fixed promptly at little or no cost.
It doesn't always work that way.
The problem(s) with new homes
An examination of the new-home construction field helps shed
light on the genesis of these warranties.
Horror stories, written by both builders and homeowners,
could fill libraries. A lot of the problems can be explained by
who's telling the tale of the new home.
For homeowners, a house is their biggest investment.
And when it's a new one, they naturally want it to be pristine and
perfect, the dream home they've been waiting to inhabit. Unfortunately,
such standards are not likely to be met, especially when the house
is one of hundreds in a suburban development. Home-construction
reality is that work occasionally slips with even the highest-quality
builder in charge.
From the builder's point of view, many buyers come
across as unreasonably demanding, seeking perfection when perfection
isn't possible. That demand for perfection clouds the issue and
makes it harder for people with serious problems to get them repaired.
The issue gets more complicated when it comes time
to determine exactly what qualifies as a construction defect. Buyers
and builders often have different definitions. Cracks in drywall
or cement or the failure to follow the specs of a building plan
precisely can drive a home buyer nuts, while the builder just shrugs.
The NAHB put together a comprehensive guide to construction
Construction Performance Guidelines, to bring some consistency
to the issue. You can buy the book on the organization's Web site
or find it in many public libraries.
The book documents what's an acceptable variation
and what isn't; a 3/8-inch crack in cement is OK, but a 1/2-inch
crack isn't. If you go to court, even small claims, and argue that
a defect should be repaired, and the builder can point to chapter
and verse in the book that the problem isn't a defect, you'll lose.