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Reading The Fine Print
Few roofs are installed without a warranty, but few roofing warranties are actually read and understood. Clearly, warranty documents are not exactly beach reading. Understanding the legalese of a roofing warranty may be a challenge. But reading and understanding the fine print of a roofing warranty before signing the contract is essential. It’s the only way facility executives can find out what lurks in the fine print. They might be surprised.
There are two types of warranties — implied (see “The Other Warranty”) and express.
Express warranties are written documents issued by the roofing materials manufacturer or roofing contractor. They are contracts between the issuer of the warranty and the purchaser of the roof system that define the limits of liability that the issuer will assume if there are problems with the roof system.
Oftentimes, the only thing facility executives consider is the length of the warranty. While this is an important facet of the warranty, there are several other warranty elements that facility executives should examine carefully and understand.
Roof warranties are generally issued by the roofing materials manufacturer and are written by the issuer’s attorneys for the issuer’s benefit. Sometimes, however, especially in less-expensive installation schemes, the roofing contractor provides a warranty for workmanship and provides a materials-only warranty from the manufacturer. It’s important to be aware of who has provided the warranty since the ability of the issuing entity to fulfill the terms of the warranty is directly tied to the solvency and strength of the issuer.
A roofing contractor warranty is usually not as valuable as a manufacturer’s warranty because roofing contractors come and go much more quickly. Once the contractor’s corporation is dissolved, the warranty is worthless. So unless the contractor has been in business for a long time or has a lot of assets, be cautious about relying on the contractor’s warranty as the sole remedy for potential problems.
If a roofing manufacturer is issuing the warranty, also check its solvency and the location of its headquarters. Can it pull out of the United States if there are catastrophic failures of its products? If so, then the warranty is only as good as the manufacturer’s willingness to remain here. Generally this is not a problem as the cost of establishing a company in the United States usually means that the company is here for the long term.
Materials and Labor
If the roof needs to be replaced, a materials-only warranty means the manufacturer will only supply the replacement material and the facility executive will have to pay for the cost of installing it. Because labor is usually at least half of the cost of a new roof, the facility executive ends up spending a lot of money getting the roof replaced.
Facility executives should be wary of materials-only warranties that exclude or are in lieu of implied warranties, as such warranties may actually reduce the legal protection against problems. (See “The Other Warranty”)
Even if the warranty is a materials and labor warranty, facility executives should still scrutinize the terms carefully. If the warranty does not specifically say that it is a no dollar limit (NDL) warranty, the remedy may be pro-rated over the life of the roof. In such cases, if the roof fails in the fifth year of a ten-year warranty, the manufacturer may only be liable for 50 percent of the roof replacement costs. The warranty may also limit the issuer’s liability to the initial cost of the roof installation, which means that after inflation, the facility executive is still liable for a portion of the roof cost.
Other Side of the Coin
Most facility executives fail to understand that once they have signed the warranty they are contractually responsible for regularly maintaining their roof. Every warranty stipulates that the roof requires periodic maintenance to keep the warranty in full force and effect. This is the most overlooked portion of a roof warranty.
At a minimum, this means twice-yearly inspections, prompt repairs if defects are found, good records kept of the inspections and the repairs performed, debris removal on a regular basis, and maintenance of coatings and surfacings.
It may also mean that roof traffic must be avoided, that accessories such as metal work, equipment, curbs, supports and skylights be maintained, and that drains be kept free-flowing and unclogged. 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 most important parts of keeping a roof in service for a long time.
Studies have shown that a properly maintained roof will last roughly double the time of a roof that is not maintained. Maintenance is a win-win situation. Most warranties also require that the issuer receive prior notification for additions or alterations that affect the roof system in any way.
Some warranties require that the roof be paid in full before the warranty is valid. This means that if there is a dispute and the roofing contractor has not been paid, the warranty will not take effect.
Facility executives usually think that the warranty will cover a roof replacement if there are leaks. That is not necessarily the case. Most warranties only cover repairing the leaks, or in warranty terms, “maintaining the roof in a watertight condition.” The warranty generally will only cover those products manufactured or private-labeled by the roofing materials manufacturer.
If the warranty commits the manufacturer only to fixing leaks, the manufacturer is not necessarily liable for damage to the insulation or roof deck caused by the leak. Most warranties also exclude “consequential damages” — other damage done to the facility as a result of a leak.
Consider what this means. If there is a call center on the top floor and the roof leaks, all of the computer equipment may be ruined and the facility shut down for two weeks. The facility executive would have no recourse for recovering those costs.
Even scarier is that roof leaks can lead to mold and mildew growth. Who will pay for the costs associated with them? Consequential damages are usually far more costly than the damage to the roof.
Most warranties also exclude ponding water and “acts of God.” These are reasonable exclusions. One cannot reasonably hold the manufacturer liable for items not within its control. Some exclude blistering. Some exclude hurricanes and still 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. Because it is difficult to make people stay on walk pads, even if they are installed in direct routes to rooftop equipment and roof hatches, this may affect the remedies available on the roof.
Pitch pans, counterflashings, gravel stops and the like, along with leaks caused by these commonly installed accessories, are not usually covered under the warranty. One exception to this is that some metal roofing manufacturers make their own metal accessories and cover all their own products in the warranty.
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. Occupants typically fail to report a leak until wallpaper is peeling or a ceiling tile falls, and even then the facility executive often does not report the problem to the manufacturer as required in the warranty. When this happens, the manufacturer is legally able to avoid major repairs. Their position is quite understandable. What could have been an inexpensive small annoyance six months before is now a costly tear off and replacement.
In most cases, it is the sole judgment of the manufacturer what action will be taken. In some cases, it also means that if the manufacturer decides that it is not liable for a leak, the owner will have to pay for the cost of the inspection. Fortunately, most manufacturers are reputable and realize that if they don’t honor their warranties, their products will no longer be used.
Warranty Costs and Benefits
A roofing contractor’s labor warranty and materials-only warranties are generally provided free of charge. The charge for a full warranty, which includes materials and labor, is generally based on the size of the roof plus an inspection fee.
If the issuer will transfer the warranty, they generally require a transfer fee and most require an inspection of the roof. After the inspection, the roof has to be repaired to the manufacturer’s specifications. 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.
Despite the extra effort it takes, getting and understanding a good warranty is beneficial. One benefit is that, before committing to a long-term warranty, the manufacturer generally requires that the installing contractor conform to the manufacturer’s recommended installation techniques. Passing the warranty inspection is a tacit acceptance by the manufacturer that its recommendations have been fulfilled.
The warranty also benefits the facility executive because, in many cases, long-term labor and materials warranties require the use of a roofing contractor approved by the manufacturer to install the system. The approved applicator list weeds out unqualified roofing contractors.
Although this is self-defense by the manufacturer, it also benefits the owner. Contractors that have applied several poor roofs cost the manufacturer money from warranty claims. If a contractor racks up several warranty claims, it will get dropped from the list. This doesn’t mean that mediocre roofers are not on the list, especially if they install very large amounts of the manufacturer’s products. But it does help keep the ratio of good roofers to poor roofers in the facility executive’s favor.
If the facility executive adheres to the terms of the warranty, it can provide repairs for leaks at no cost. The terms of the warranty dictate the manufacturer’s obligation. This ranges from simply fixing the leak, to providing new materials, to removing and replacing the entire roof. The manufacturer may pay for the entire cost of the roof replacement or a pro-rated amount depending on how long the roof has been on.
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 therefore not likely to need replacing in the near future.
Although a warranty can offer benefits, the best option is simply to have a properly designed and installed roof to begin with and then maintain it like any other asset in the building. If that is done, the roof will outlast any warranty.
The Other Warranty
The written warranty isn’t a facility executive’s only legal protection from problems with a roof. A roofing membrane, like other products, comes with an implied warranty. An implied warranty is something that is generally understood without being directly spelled out. Implied warranties cover the performance that can reasonably be expected from a material marketed for a specific purpose. This is also known as “merchantability and fitness for a particular purpose.”
For instance, if a material is marketed as a roof membrane, there is an implied warranty that the material, if properly installed, will prevent water from passing through it. This is an implied warranty because that is what roof membranes are supposed to do. There is also an implied warranty that the material will continue to perform if properly maintained unless acted upon by an outside force — fire, bombings, winds higher than design values, for example — because it is generally understood that roof membranes are not intended to perform when subjected to these influences. Implied warranties can also be negated by information supplied by materials manufacturers properly warning the consumer ahead of time of defects that may occur.
For instance, roofing manufacturers warn that traffic over the roof can damage the membrane. If a facility executive is told this fact ahead of time, there can be no reasonable expectation that the problem will not occur. For example, there is no implied warranty that the membrane will not prematurely wear out at the roof access door where there is constant traffic.
One important implied warranty 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, i.e., that a roof membrane material, if properly installed, will prevent liquid water from passing through it. All products are covered under the UCC, unless this implied warranty is contractually waived elsewhere, such as by clause in a written warranty.
If the written warranty includes language that excludes or is in lieu of implied warranties, it means that the UCC no longer applies. If this exclusion exists in a materials-only warranty, check with an attorney as it may be best to decline the warranty entirely.
— Karen Warseck
Karen Warseck, AIA, is president of Building Diagnostics Associates, a Hollywood, Fla., architecture firm. She is a contributing editor for Building Operating Management.