Surprising Pathways

Warranty activity at an all-time high! Leading indicator for homebuilding recovery?

I keep up with Eric Arnum's well-researched newsletter, Warranty Week, and their recent findings suggest that warranty claims are at an all time high for home building suppiers such as HVAC, appliances, fixtures and building materials.   Not only are claims at their highest rates but the manufacturers are also anticipating higher costs as most manufacturers in his survey increased their accrual rates.  

Eric Arnum observes "But building activity, or at least the repairs and warranty work that results from building activity, is by our measurement at an all-time high. Chalk it up to labor rate increases, commodity inflation, Chinese drywall problems, currency exchange rate chaos, product quality declines, sunspots, hurricanes, or stimulus spending, if you must. But the fact remains that this select group of warranty providers paid out more in claims this spring than they ever have before."

In late September Warranty Week completed a survey of new home builders that will also be of interest as it was here they "suggested that an upturn in the amount of warranty claims paid by new home builders could signal that a bottom had at long last been reached in that sector".

 

Transfering Manufacturers' Product Information

Although many builders and remodelors provide manufacturer’s product and warranty guide in a 3 ring binder, new options are available to deliver digital copies to buyers in a single resource.  For homebuilders and remodelers this information could include product registration procedures, user guides, warranties and installers guides for systems such as HVAC, structured wiring, security and home entertainment.

Providing contact information and website links to manufacturer’s websites has been a particularly important time-saver for builders and their buyers.  Keeping a listing and reciept acknowledgement of exactly which manufacturer’s documents the buyer receives may help minimize the builders exposure to warranty  claims.

Generally manufactured products that could be included are items that are manufactured completely off the jobsite.  Some vendors offer web-based document lockers and library system can help you keep track of homeowner documents and facilitate burning them onto CD-ROM and offering them via their corporate websites.

Warranty registration cards and homeowner obligations

Are homeowners obligated to return their registration card to protect their warranty rights?  Generally this is not true - and prohibited in a few states, notably California.

For warranty purposes, the only information a manufacturer needs is the homeowner's name, the date you purchased the product, its model and serial numbers, and a way to contact you in the event of a product recall. 

But the registration cards usually ask you to provide much more personal information, including marital status, the size of your household, frequency of travel and favorite activities. Product owners are not required to answer personal questions to be protected by the warranty.  (NY Daily News) More...

Magnuson - Moss Warranty Act Revisited

For home building, remodeling and improvements, consumer products warranties are generally transferred to homebuyers or homeowners.  Providing these warranties can protect housing professionals installing these products from defect claims and minimize implied warranties that might otherwise arise.

Consumer products are defined by the FTC's Magnuson-Moss Warranty Act as tangible personal property which is normally used for personal, family, or household purposes.  Materials or equipment that are part of the structure may be considered consumer products if they are specified as a product at the point of sale (contract) and then incorporated into a new home, remodel or improvement. Use this link for updated information about the FTC's definition of a Consumer Product....

The act also requires that the consumer have access to consumer product warranty information prior to purchase.  This may include providing homebuyers with updated copies of the applicable warranties at the sales office or using Internet-based information services that present this information to prospective buyers prior to sale.