Home Construction Warranty: The Ultimate Guide

Key Takeaways

Before you begin any kind of home construction, especially one as big and costly as building an ADU, you need to make sure your project is covered through a home construction warranty. For many homeowners, this warranty comes in the form of a builder’s warranty. Builders typically include these warranties in the cost of construction, and they protect you in the event that workmanship issues lead to structural damage or issues with the home’s electrical, HVAC, or plumbing systems.

These builder warranties usually don’t cover the cost of replacing appliances or making repairs caused by an earthquake or other natural event. For that type of coverage, homeowners may want to pursue a third-party home warranty and/or get an ADU-specific homeowners insurance policy.

What is a Home Construction Warranty?

Just like you have warranties for your refrigerator, car, or other expensive purchases, home construction warranties guarantee workmanship on your construction project for a certain period of time. This means that if you’re within the coverage period and there’s an issue with the construction of your home, your warranty will cover the cost, absolving you of any financial liability.

Coverage Periods

The coverage period for these warranties typically isn’t blanket but varies depending on what area of the home is being covered. For example, the HVAC system in your home might have a 2-year warranty, while structural warranties for the foundation or roof may last 10 years or more.

Common Claims

Common warranty claims include:

• Non-cosmetic cracks in the foundation
• Loose tiles or uneven hardwood floors, leaky pipes
• Faulty wiring
• Air conditioning issues

However, these claims can be denied if it is discovered that the homeowners didn’t provide routine maintenance to the home’s systems, made DIY repairs or renovations, or did not file the claim within a certain time period.

The coverage period and coverage terms for your particular policy will depend on your warranty company or warranty provider. Be sure to understand any service contract completely before agreeing to it and beginning construction.

Your builder should guarantee their work. Review your blueprint and warranty terms together before the first nail is driven.

Types of Home Construction Warranties

Homeowners taking on an ADU build often get their home construction warranty through a builder’s warranty. While you definitely want to make sure your builder offers such a policy (all reputable builders should!), these policies provide limited coverage. For more robust, expansive policy terms, homeowners may want to pursue purchasing a separate policy via a third-party home warranty.

Types of construction warranties:

• Builder’s warranty
• Third-party home warranty

Builder’s Warranty

Builder’s warranties are meant to cover the materials and workmanship performed by your ADU builder or any subcontractors they hire on their behalf. These warranties essentially guarantee that a builder will stand by their work for a certain period of time, providing homeowners with financial security post-build. After all, the last thing any homeowner building an ADU wants to do is make expensive repairs months after construction is complete!

Generally, builder’s warranties cover an ADU’s:

• Structural integrity (think: roof, load-bearing walls, foundation)
• Mechanical systems (think: electrical, plumbing, HVAC)
• Windows, doors, and exterior finishes
• Interior finishes like flooring, cabinets, and trim

Every builder’s warranty is different, but typically, the warranty has different coverage periods for different areas of the home. These policies don’t cover normal wear and tear or damages resulting from DIY repairs or homeowner neglect.

Third-Party Home Warranty

Third-party warranties typically cover all the same aspects of home construction as builder’s warranties but for a longer period of time. In some cases, they can also cover the cost of repairing or replacing large household appliances, like stoves and refrigerators.

While builder’s warranties are included in your construction cost, third-party warranties are an additional cost. Unlike many builder’s warranties, though, third-party warranty plans are often transferrable to potential buyers in the future.

Not all warranties are created equal—builder vs. third-party warranties offer different protections. Know the difference.

What Does a Home Construction Warranty Cover?

Home construction warranties typically cover 3 areas of construction: structural elements, major systems, and workmanship issues.

Structural Elements

Structural elements covered under most home construction warranty policies include:

• Foundation & footings
• Load-bearing walls and framing
• The roof framing system and structural components of the roof (think: rafters, etc)
• Structural subflooring, joists, and beams

Most of these structural elements are covered under a 10-year warranty.

Systems Coverage

The major systems covered under most home construction warranties include:

• Electrical (think: wiring, electrical panels, lighting fixtures installed during the build)
• Plumbing (think: supply lines, drainage systems, water heaters, faucets and fixtures)
• HVAC (think: ductwork, ventilation, central heating/AC units)

These systems are typically covered for 2 years.

Workmanship Issues

Some common workmanship issues covered under home construction warranties include:

• Cracks in drywall
• Peeling or uneven paint
• Warped hardwood and loose or cracked tile
• Improperly installed or sealed doors or windows
• Misaligned bathroom or kitchen cabinets
• Improperly installed roof shingles
• Cracks or peeling in siding or stucco

These types of issues are typically covered for 1 year.

Structural and system issues covered by a warranty often reveal themselves during framing—this is when inspections matter most.

Common Exclusions in Home Construction Warranties

Your builder or third-party warranty company often won’t cover any claims resulting from regular wear and tear, natural settling, or environmental events like earthquakes and floods.

Warranties may also be voided and claims may be denied if it’s discovered that a homeowner didn’t properly maintain the home or attempted DIY repairs or renovations.

Avoid warranty voids—skip DIY fixes and document every phase of construction to stay protected.

How Long Does a Home Construction Warranty Last?

Home construction warranties vary by builder and by third-party warranty company, but know that California does require a 1-2-10 warranty for new construction as outlined by the Right to Repair Act (SB244).

A 1-2-10 warranty covers workmanship issues for 1 year, major home systems for 2 years, and structural elements for 10 years.

Why is a Home Construction Warranty Important?

A home construction warranty protects a homeowner’s financial investment while also ensuring builder accountability. Especially in a state like California that’s in the midst of a housing crisis, having this level of protection and assurance for homeowners is important to encourage the building of ADUs and other forms of alternative housing.

Warranty-backed ADUs are smart investments—especially in California, where long-term protections build homeowner confidence.

How to Claim a Home Construction Warranty

Filing a claim under your home construction warranty depends on whether you have a builder’s warranty or third-party coverage. If you have a builder’s warranty, you’ll contact your builder about the issue directly. If you have a third-party warranty, you’ll reach out to their claims team.

In either case, you’ll want to provide photos and videos of the issue and complete any necessary forms. It’s also a good idea to keep copies of any forms as well as any email communications for your records. If the builder or warranty company requests an inspection, be sure to make yourself and your home available to them. All of these things will ensure your claim is processed and approved in a timely manner so that any necessary repairs can be made.

Questions to Ask About Your Home Construction Warranty

First thing’s first: if your ADU builder doesn’t offer a builder warranty, that’s a huge red flag. All reputable builders should stand by their work with a builder warranty.

Be sure you understand the specifics of any warranty, too. Good questions to ask before hiring an ADU builder concerning their warranty include:

• What’s covered under your warranty?
• What’s the warranty period? (Remember: SB244 requires a minimum of a 1-2-10 warranty!)
• How do I file a claim under your warranty?
• What’s the typical timeline for repairs under your warranty?
• Is this warranty transferable to future property owners?

Any builder you work with should have these answers readily available and give them to you without hesitation.

Ask direct warranty questions early—clarity now prevents costly confusion later.

Partnering with Better Place Design & Build for Peace of Mind

At Better Place, quality and long-term customer satisfaction are of the utmost importance to us, which is why we do careful work using the highest-quality materials available, communicate transparently with our homeowners, and provide a robust builder warranty on every project.

We know that an ADU is a huge investment for any homeowner, and we accept that responsibility with pride. To learn more about how Better Place can make your ADU dreams a reality, schedule a free consultation.

Our team stands behind every build. A robust builder warranty ensures your ADU lasts for generations.