What Is This Clause?
A clause where the builder's limited warranty explicitly excludes coverage for common and often expensive construction defects, including drainage problems, grading issues, soil settlement, mold, and biological contaminants. The warranty also typically gives the builder sole discretion over what qualifies for repair and how repairs are performed.
How It Works
Every new construction builder provides a limited warranty — but the devil is in the details. The warranty's exclusions often remove coverage for exactly the types of problems most commonly caused by poor construction practices: water intrusion, drainage and grading failures, soil settlement, mold growth, and damage from biological contaminants.
The builder's limited warranty also typically replaces all implied warranties (including habitability) and gives the builder sole authority to determine whether an issue qualifies for warranty service, what repair method to use, and when to perform it. Buyers who disagree with the builder's assessment have limited recourse.
Warranty claims must usually be submitted within extremely tight windows — sometimes as short as 30 days after the warranty period expires. Missing this deadline, even by a single day, can result in a complete loss of warranty coverage for that issue.
Why It Matters
The most common and expensive construction defects — drainage, mold, settlement — may be explicitly excluded from warranty coverage.
The builder decides whether your issue qualifies for repair, what method to use, and when to do it.
Missing a tight claim deadline can void your warranty coverage for that issue entirely.
Which Builders Use This Clause
The following builders have been documented using this clause type in their purchase agreements.
State-by-State Enforceability
Limited warranty provisions are generally enforceable, but they may not override implied warranty protections in states that recognize them. Some state courts have held that warranty exclusions for issues caused by the builder's own construction practices are unconscionable. The scope of enforceable exclusions depends heavily on state law.
What Buyers Can Do
- 1Read the full warranty document carefully — pay attention to exclusions, deadlines, and the claims process.
- 2Submit all warranty claims in writing and keep copies of every communication.
- 3Do not miss claim deadlines. Set calendar reminders for warranty expiration dates.
- 4Understand your state's implied warranty protections, which may provide coverage beyond the builder's limited warranty.
- 5Consider having the warranty document reviewed by an attorney before closing.