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Finding the Value of Roofing Warranties
When low-slope roofs (less than 2:12) were first introduced, there were few choices — built-up roofing or built-up roofing. Bonds were issued by roofing manufacturers assuring that, should problems occur, the building owner could be compensated for a loss. With the rise of alternate roofing systems, the emphasis on warranties increased as new systems came to market. Regardless of the actual merits of the materials, a long-term warranty made it easier to sell a new and untried system. Warranties became a marketing tool — and have remained so.
Warranties vary tremendously but generally fall into two categories: implied and express. Implied warranties relate to the performance that can reasonably be expected from a material marketed for a specific purpose. Nothing needs to be stated in writing for an implied warranty to exist. For instance, if a material is marketed as insulation, there is an implied warranty that the material will reduce heat loss from a building because that is what insulation is supposed to do. There are no specifics attached to an implied warranty. With insulation, nothing in an implied warranty says that the R-value will be sufficient for the owner’s purposes.
There is also an implied warranty that the material will continue to perform if properly installed and maintained. If the material is acted upon by an outside force, however, the implied warranty generally becomes void; thus, water that leaks into insulation can void the warranty on the insulation.
Implied warranties can also be negated if manufacturers properly warn the consumer ahead of time of effects that may occur. For instance, some insulation manufacturers state in their literature that the R-value of their material will drop over time, so there is no implied warranty that the R-value will be constant.
One implied warranty that benefits the building owner is that the material conforms to the Uniform Commercial Code (UCC). This code gives the consumer the right to expect that when a product is sold, it will perform for its intended use. All products are covered under the UCC unless this implied warranty is contractually waived elsewhere, such as by clause in an express warranty.
In the case of roof systems, express warranties are written documents issued by the materials’ manufacturer or the contractor. An express warranty is a legal contract between the roofing materials’ manufacturer or contractor and the building owner that defines the limits of liability that the manufacturer or contractor will assume if there are problems with the roof system. The contract also defines the specific requirements that the building owner must fulfill to keep the warranty in force. Both of these items — liability limits and building owner responsibilities — have a significant impact on the remedies available to an owner under the terms of a warranty. The warranty is not a bond or an insurance policy that will demand payment by a third party in case of a loss.
Manufacturer warranties can cover materials only or materials and installation. Lengths of manufacturer warranties range from five to 25 years. Contractor warranties generally range from one to five years. Longer terms can be negotiated but are very rare.
When a manufacturer commits to a long-term warranty, the manufacturer generally requires that the installing contractor conform to the recommended installation techniques for a materials and installation warranty to be issued. Because the manufacturer’s recommendations are intended to provide a sound installation, this can be a real benefit.
Sometimes, issuing a long-term warranty makes the manufacturer more observant of the installation. Most often, this is limited to an inspection at the close of the project by a representative of the manufacturer. Sometimes the manufacturer will attend preconstruction meetings upon request and occasionally provide on-site, in-progress inspections.
In most cases, long-term labor and materials warranties require that the system be installed by a roofing contractor approved by the manufacturer. That’s another benefit to the owner: In many cases, the approved applicator list weeds out the worst of the roofing contractors. This requirement protects the manufacturer as well as the owner. Contractors that have applied several poor roofs cost the manufacturer money from warranty claims. Enough warranty claims and the roofer gets dropped from the list. This doesn’t mean that mediocre roofers are not on the list — especially if they install large amounts of the manufacturer’s products — but it does help keep the numbers down.
If the owner adheres to the terms of the warranty, the warranty can provide remedies for leaks. Depending on the terms of the warranty, the remedies can range from simply fixing the leak or providing new materials all the way to removal and replacement of the entire roof. The manufacturer may pay for the entire cost of the roof replacement, a prorated amount depending on how long the roof has been on or nothing at all.
Finally, if the warranty is transferable, it can be used as a selling point in marketing the building. If the roof is still under warranty, the implication is that it is in good condition and not likely to need replacing in the near future.
Too often, the only thing about a warranty that a building owner considers is length. This is probably the least important part. When considering whether to obtain a warranty, building owners must understand that warranties are written by the attorneys for the issuer for the benefit of the issuer. The warranty, like any other legal contract, must be carefully analyzed to see exactly what one is getting for the money; there is a premium paid for materials and labor warranties based on the square footage of the roof.
If at all possible, the building owner’s attorney should carefully scrutinize the terms of the warranty to see what the owner will be getting, what the owner will not be getting and whether the warranty is even needed.
Almost every warranty has a clause that reads, “This warranty is in lieu of all other warranties, express or implied.” By signing a contract with that clause in it, the building owner gives up recourse under the UCC if a product turns out to be unsuitable for a roofing material. This is an especially important consideration when using a new product.
As an example, when PVC roofing first went on the market, a manufacturer whose product line included shower curtains decided to expand into roofing. Its material, although quite good for shower curtains, was unsuited for use as a roofing membrane and many failures occurred. These failures fell under the implied fitness-for-use provisions of the UCC. But anyone who signed a contract accepting the manufacturer’s express warranty, which specifically excluded any implied warranties, was not able to get recompense from the manufacturer when the product itself failed.
The building owner should also check to see if the warranty is materials only or materials and installation. If it is a materials only warranty and contains the exclusion clause, consider foregoing it. The building owner’s rights under the UCC may be much better. Ask an attorney.
Another critical issue is who decides what the remedy will be. In most cases, the manufacturer is the sole judge of what action will be taken. This means that if a manufacturer really doesn’t want to provide any remedy, it can usually find a way out. Fortunately, most manufacturers are reputable and realize that, if they don’t honor their warranties, their products will no longer be used. That said, it’s important to take note of any provision that states, “The warranty will be null and void if the owner fails to….”
Another area to pay attention to is maintenance requirements. Most manufacturers require that the owner conduct twice-yearly inspections of the roof and document the findings. Failure to carry out these inspections and to repair small defects promptly can be taken quite rightly to mean that the owner is not maintaining the roof and that the warranty is null and void. In reality, these maintenance requirements can be a benefit to the owner. Regular roof maintenance is not only needed to keep the warranty intact, but it is, along with proper initial design and installation, one of the three legs supporting roof longevity. Studies have shown that a roof properly maintained will last roughly double the time of a roof that is not maintained. Maintenance is a win-win situation.
Failure to meet notification requirements can also cause a warranty to be null and void. Most warranties require notification in writing to the manufacturer within 30 days of discovering a leak. The reality is that most leaks go unreported for months until a serious problem occurs. Many tenants will not report a leak until it gets to the point where wallpaper is peeling or ceiling tiles are falling. Then, the owner often fails to report it to the manufacturer as required in the warranty. When this happens, the manufacturer is legally able to get out of major repairs. Their position is quite understandable. What could have been an inexpensive small annoyance may well become a costly tear off and replacement after six months of delay. Leaks don’t get better on their own.
Another very important item to examine is the type and extent of the remedy included in the terms of the warranty. Is the manufacturer committing itself to fixing leaks without fixing damage to insulation, deck, etc.? Does the warranty exclude “consequential damages”? Consider what this means. Think of a call center on the top floor. If the roof fails and all of the computer equipment is ruined and the facility is shut down for two weeks, will a warranty that excludes consequential damages prevent the owner from recovering these costs? Or suppose that roof leaks lead to mold and mildew growth by providing moisture that the fungi need to grow. Who will pay for the costs associated with mold and mildew? Consequential damages can be far more costly than the damage to the roof.
Getting a contractor to do warranty repairs can sometimes be difficult, especially if the roof is an unusual type with few or no local approved applicators or if the facility is in an out-of-the-way location. This can be even worse if the warranty has been issued by a roofing contractor and the contractor no longer maintains an office nearby. Some manufacturers will not respond quickly to recurring leaks or will send the same contractor who did not fix the leak the first time. Because the contractor who fixes the leak under the warranty generally has to be an approved applicator, the leaks may continue if the selection of contractors is limited.
Transfer issues should also be scrutinized. Because a warranty is not an insurance policy or a bond, it is completely dependent upon the strength of the issuer. What happens if the company goes out of business, declares bankruptcy, gets bought out or pulls out of the United States? This is an especially important consideration when the warranty is issued by a roofing contractor. With a contractor warranty, be sure that the company has sufficient assets to cover the warranty. Check to see how long it has been in business under the same name. Corporation name changes are a sign that the company lacks stability and may disappear when a warranty claim is made. Check the company’s reputation carefully to be sure that the company honors its commitments.
Whether it’s a manufacturer or contractor warranty, consider whether the warranty is transferable to a new owner and the requirements for a transfer. In some cases, the manufacturer requires that the roof be brought up to the original standards for the warranty to be transferable. The costs to do this on an older building may be more than the warranty is worth.
Finally, look at the list of exclusions. Most warranties exclude ponding water, acts of God and metal work not supplied by the manufacturer. These are not unreasonable exclusions. One cannot reasonably hold the manufacturer liable for items not within its control. Some warranties exclude blistering. Some exclude hurricanes; others exclude damage caused by much lesser windstorms — gale force winds and even high wind gusts.
Most warranties exclude additions or alterations to the roof unless the manufacturer is notified in advance and approves the alteration or addition in writing. Traffic across the roof is excluded in many warranties. The reality of roofing is that it is difficult to make people stay on walk pads, even if pads are installed in direct routes to the equipment and roof hatches. That may affect the remedies available for a roof. Look at the exclusions and see how they will affect a given particular situation.
Beyond the Warranty
The goal of a warranty is to assure a quality roof. But a warranty never kept a building dry. The best way to keep a roof functional is to be sure it is designed and installed correctly in the first place and then maintained. What does this mean?
First, don’t rely on just the manufacturer’s recommendations to assure that the roof is designed well. Manufacturer specifications and details are generic and may not be applicable to a particular situation. A well-designed set of construction documents will not only be specific to a building but will also help to assure that all of the contractors are bidding on the same work. There are architecture and engineering firms that specialize in roof consulting that can provide design documents that anticipate problems and solve them before they occur.
Second, be sure to contract with a reputable, stable and competent roofer. The manufacturer’s approved applicator list is a starting point for choosing a contractor, but it’s still important to check references, licenses and business contacts.
Third, have someone watching while the roof is installed. Even the best contractor has an off day; what’s more, a situation may arise that requires a change to the work, or other problems might occur that will affect the long-term durability of the roof. According to the National Roofing Contractors Association, third-party inspection is the best quality assurance available.
Fourth, keep the roof maintained. Have someone inspect the roof twice a year — whether it is a roofer, architect, engineer or in-house staff, the main criterion is that the person be capable of looking at the condition of the roof and determining if there is a problem or not. Then the owner must assure that the small repairs noted in the inspection report are completed.
Remember, a warranty is a contract, not an insurance policy, and like any other contract can be negotiated. It can add value to a roof installation but is not a substitute for proper roof design, competent installation and long term maintenance in assuring a leak-free roof. In the attempt to assure the quality of the roof, a warranty is just another tool that can help or hinder building owners — which one depends on whether owners have done their homework.
Contributing editor Karen Warseck, AIA, is president of Building Diagnostics Associates, a Hollywood, Fla., architecture firm that specializes in building repair consulting. She is a long-time contributing editor to Building Operating Management on roofing and exterior wall issues.