Lawyersandsettlements.com; June 3, 2013
Lakewood Ranch, FL: The home warranty is, in some respects and in certain contexts, somewhat of an oxymoron. A builder’s warranty, which is usually in force for the first five years of life for a new home, is often moot as most structural or mechanical bugs will not appear before the warranty term is up. To that end, home warranty insurance encompassing the first five years of a home is also somewhat misguided for the same reason; the chances are greater that things will be fine when a home is new and in the best of condition, than later on. According to Tulsa World (5/13/13), most real estate insiders agree on this point.
Where home warranty companies have the greater value is when the home is older and starting to show its warts. This is usually when it makes sense to have some coverage in place to protect against a breakdown in the air conditioning, furnace or structure.
But there are plenty of exceptions to both scenarios. New homes can develop an Achilles heel early on – in some cases making the home practically inhabitable. On the other side of the coin, homeowners opting for an extended warranty for the peace of mind are often blindsided when it’s time to make a justified claim and bad faith insurance results in an unfair denial.
In an example of the former, one of the largest builders in the country recently drew the ire of residents at Willowbrook, a community of town homes near Lakewood Ranch in Florida, when ongoing issues with relatively new construction negatively impacted many of the residents’ ability to inhabit their homes successfully. The problems included water intrusion from balconies, which led to severe mold problems, and corroded walls, ceilings and floors.
Inspectors from Manatee County, according to the Sarasota Herald Tribune (4/27/13), also found incidents of rotten wood, boards that were never nailed down and missing hurricane straps. While it was not articulated in the report whether or not home warranty insurance was available for the necessary repairs, at the end of the day, residents in the 272-unit complex made enough noise to persuade KB Home, the contractor of record, to commit to repairing any and all deficiencies associated with the development.
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