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Finance Services
DOES MY SELF-BUILD HOME NEED A STRUCTURAL WARRANTY?
With price increases impacting every aspect of the construction process, self-builders will be looking for ways to manage costs. Hidden defects in newly built properties can happen to the most prepared self-builder, so protecting the project with a structural warranty can help with costly, unforeseen structural problems.
WHAT IS A STRUCTURAL WARRANTY?
Self-build homes can experience a range of design, build, or material problems, sometimes years after the house was built. A structural warranty is designed to cover the cost of fixing these problems.
Structural warranties are designed to cover the cost of repairing hidden defects that are often expensive and generally excluded from home insurance policies. A structural warranty typically covers the cost of repairing or reinstating newly built properties or new works to existing buildings because of a design defect, faulty workmanship, or materials.
ARE STRUCTURAL WARRANTIES A LEGAL REQUIREMENT?
There's no legal requirement to have a structural warranty after completion, but homeowners may find that lenders will require a guarantee for up to ten years (even if they aren't financing the build). A structural warranty may also be needed if the homeowner decides to sell their property in the first ten years to anyone using a lender. Architect certificates and professional practitioner's certificates (PCC), don't generally cover structural defects, leaving the owner to pick up the cost of any structural problems.
WHAT DOES A STRUCTURAL WARRANTY COVER?
Structural warranties are designed to cover the cost of fixing damage to a property which can include professional fees, the threat of imminent collapse, ingress of water (excluded for the first 12 months), subsidence, landslip, or heave. Other things typically covered include the removal of debris, dismantling, demolishing, shoring up of the property, temporary removal of contents, and resultant damage to non-structural elements.
WHAT'S THE BEST TIME TO ORGANISE A STRUCTURAL WARRANTY?
Homeowners can organise structural warranties before construction starts to enable the insurer to assess the build throughout the construction period. Cover can be arranged after construction starts, but the insurer may apply cover exclusions and increase the cost of the premium if the selfbuild is already underway.
Insurers may charge a technical audit fee and a small deposit premium, taking the balance of the premium at completion. The premium rate pre-agreed at the start of construction is generally applied to the reinstatement value of the property at practical completion to generate the final premium payable.
