Warranties and Service Agreements What You Should Know About Coverage

As in life, there are no guarantees when it comes to building systems, parts, and components. But unlike life, there are warranties and service agreements to ease the pain when something breaks down, gets damaged, or proves to be defective. Like a kind of insurance, warranties protect our investments in cases of unexpected events, working hand in hand with service agreements to keep things running at top performance.

What’s a Warranty?

A warranty is defined in part as “a written guarantee, issued to the purchaser of an article by its manufacturer, promising to repair or replace it if necessary, within a specified period of time. In contract law it is further defined as a promise that something in furtherance of the contract is guaranteed by one of the contractors, especially the seller’s promise that the thing being sold is as promised or represented.” Both of these definitions have multiple applications in the context of multifamily communities, including co-op and condo corporations and associations.

 Not all warranties are the same. “Different warranties work in different ways,” says Jeffrey Reich, a partner at Schwartz Sladkus Reich Greenberg & Atlas, a law firm based in Manhattan. “The components of a building for which you’d expect to see a warranty—and it depends to some extent on where the building is in its life cycle—are the roof, which might have a warranty of 10 to 20 years, the boiler – perhaps 10 years – and windows, among others. The Cadillac of warranties is a 20-year, no-dollar-limit (NDL) warranty. With those, whatever the cost, the manufacturer will repair it.”

Manufacturer Versus Contractor Warranties

 In general, warranties can be split into two main groups: parts and labor. So to look at this simply, if you buy a dishwasher and it breaks down within a certain specified period of time, the manufacturer will replace the part – or the whole machine – and that might or might not include the labor involved in repairing or removing/reinstalling it. Now let’s assume the dishwasher was installed during a renovation, and it’s the contractor who caused the damage that led to the dishwasher breaking down. The parts would be paid for by the manufacturer – but the contractor would be responsible for the labor.

 If we apply the same format to, say, a roof, the components of the roof are protected under the manufacturer’s warranty. But any damage resulting from the work done by the installing contractor would be the responsibility of that contractor to make right. It is of the utmost importance that when work is done, contract negotiations include warranties from contractors.

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