Saturday, March 13, 2010

Warranties...the fine print

An interesting thing happened to me this week. We recently completed a project which consisted of repairs to five 4-story, wood framed elevator towers. Once we reached substantial completion, the general contractor submitted his warranty as well as a manufacturer's warranty for the waterproofing system we specified for the exterior walkways. I received the warranties and quickly did what I usually do:
  1. Stamped them as 'Received'
  2. Scanned them to the server to two locations for redundancy.
  3. Made a copy of the original and filed the 2 hard copies. Again, redundancy.
The problem is that I didn’t read the manufacturer's warranty. About a week later, I had the warranty binder open as an older colleague came to my desk. He pointed to it an casually noted that warranties sometimes contain all sorts of odd clauses. Given that prompting, I took a few minutes to read the warranty. Good thing I did. I learned a few things:
  1. I only had a product warranty. I still needed a two year warranty from the installer.
  2. The installation had to be approved by a manufacturer's representative once installed to validate the warranty.
  3. The installer needed to provide proof that he was a manufacturer approved installer.
  4. The address was listed incorrectly. You want to make sure that address, owner's name, and building names are all correct. You do not want to give anyone any ammunition to make an argument against your warranty's validity.
I made arrangements and soon walked the site with the manufacturer's representative. As we did so, he confided in me something scary: In twelve years, I was the first person to request such a service from the manufacturer. He guessed that everyone else assumed an implied warranty. Lesson learned: read the warranty. It takes 15 minutes and it is much easier than explaining to your client (as a CM or Architect) why his warranty is void.
For the real estate folks, make sure that your Architect and CM read the warranties. Request a synopsis from them to make sure that they are doing so. If your CM or Architect discusses this issue with you without prompting, it is a good sign that he/she is properly doing their job. It would also behoove you to read the warranties yourself to check for 'gotcha' clauses. Proper handling of warranties will result in the fullest possible coverage giving the owner more leverage and power to negotiate a higher selling price if disposition is on the horizon.