What Are the Benefits of a Dedicated Self Build Warranty?

When you build or buy a new home, you can benefit from a 10-year structural warranty that provides vital protection against defects and problems. But these insurance products aren’t all designed the same way.

So, it’s important to understand exactly what type of warranty you’re getting. As a self builder, you’re both the developer and the homeowner. This makes you pretty unique and means a conventional new build warranty won’t cut the mustard.

What is a Standard New Home Warranty?

When you buy a speculative new home from a developer or small builder, you’ll usually receive 10-year cover on that property. The developer or builder will be registered with a warranty provider, and they’ll gift the cover to the first purchaser of the property.

During the first two of those 10 years, the builder is required to investigate and remedy any defects that arise in the home. This is known as the defect period, and it’s similar to a manufacturer’s guarantee. Importantly, the warranty company puts onerous legal and financial securities in place to ensure the developer/builder fulfils these obligations.

It will also provide additional insurance cover during those first two years. This is to protect the buyer in the event the developer fails in its duties. That same insurance continues in years three to 10, giving the homeowner direct cover for any defects that may arise.

more from protek

Photo: Saxarina / Shutterstock.com

What’s Different About a Self Build-Specific Warranty?

Self builders should avoid structural warranties with a defect period. A high percentage of structural warranty claims occur in the first two years. Given you’re directly commissioning the build, a standard new home policy would make you directly responsible for issues in that timeframe. This will be true whether you’re still in the house or, under the Defective Premises Act, even if you’ve already sold it on.

If you’re creating your dream home, you’re probably putting your life savings into the project. So, you’re highly unlikely to have the financial resources in place to rebuild a property that’s subject to a major defect. Nor will you want to be bound by those legal instruments of a standard warranty.

This is where a self build-specific warranty comes into its own. It is designed to give you, as the builder and first homeowner, appropriate insurance cover right from the date of practical completion. Importantly, it does not have a defects period, so it provides cover from day one, de-risking the financial implications of a major defect emerging.

It doesn’t matter whether a problem is picked up during construction or post-completion. Once the cover is issued, if you experience problems relating to an insured defect, you can make a claim. For ultimate protection, look for providers who are backed by insurers authorised to underwrite business in the UK, and who are signed up to the Financial Services Compensation Scheme.

Further Benefits of a Self Build Warranty

A dedicated self build warranty provides cover for you and successors in title. So, if you decide to sell the property, the warranty is automatically transferred to the new owners, meaning they can also claim on the policy (rather than pursue you as the builder).

Then there’s the fact that this product is totally tailored to self builders. With Protek, for instance, you gain access to an online portal to easily manage your structural warranty journey. Following each inspection, the report and development tracker will be viewable online. You can then directly upload any requested documents or commissioning certificates, keeping all that key information in one place and instantly available.

A full warranty also provides greater peace of mind than, say, relying on a professional consultant’s certificate (PCC). A PCC is only valid for six years and is simply an extension of that professional’s indemnity insurance. So, you can only claim under a PCC if you’re able to demonstrate they were negligent for not picking up a problem that later manifests as a defect. This is a difficult, costly and stressful legal process that you’ll circumvent by arranging a self build-specific warranty.

Finally, genuine owner-occupied self build projects are exempt from the community infrastructure levy (CIL), which is a charged imposed on new development that can run to £10,000s. A self build warranty can be used to verify your project qualifies, as it includes a clause stating you must live in the property for at least 12 months before it can be transferred (sold) to a successor in title – evidencing your status as a self builder.