BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
ROOF WARRANTIES
Q: I represent a buyer on a home which closed escrow last summer. The property was represented to have a roof warranty since the roof was recently replaced. Now with the rainy season, the roof is leaking. My buyer has called the roofing company and there is no warranty in effect because the property was sold to a new owner. How can that be? They think somebody owes them some money for their repairs.
A: Roof contracts that contain warranties must be in writing according to California law. Subsequent purchasers of the property, such as your buyer, can enforce the roof warranty unless the written roof contract contains a “clear and conspicuous provision limiting transferability of the warranty.”
This provision limiting transferability must be stated at the top of the first page of the warranty in 14- point boldface type and enclosed in a rectangular box.
If the roof warranty uses a term such as “Lifetime Warranty” or “Life Warranty,” then this, too, must be in the rectangular box at the top of the warranty in 14-point boldface type disclosing with clarity the “life” to which the representation refers, along with any other limitation on transferability. Civil Code Sections 1797.91-.94
Many roofing companies place these limits on transferability knowing that about 1 out of every 5 homes sell every 5 years. Thus, their exposure on their warranty for a faulty roof is limited.
PRACTICE TIPS:
1. LISTING AGENTS: If your seller states that there is a roof warranty, do not advertise the roof warranty until you have reviewed the warranty document itself and determined that there is no limitation on transferability.
2. SELLING AGENT: If you see a property advertised as having a roof warranty, ask to see the warranty itself and review for limits on transferability.
This Weekly Practice Tip is an attorney-client privileged document for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.