What you should know about roof warranties

Warranties – Especially commercial roof warranties—are not the iron-clad protection many owners assume them to be. All Roofing Manufacturers build in loopholes that can detract from the presumed value of a warranty ultimately disappointing an owner with a leaky roof, covered by a leakier warranty.  Regardless of the actual merits of a roofing membrane, a long-term warranty makes it easier for manufacturers to sell new and untested roofing systems.  In this competitive time, roof warranties have become a slick marketing tool for manufacturers, and are more likely to be talked about than shown.

Most building owners or property managers would not think of purchasing a roof without a warranty and are enticed by the false confidence proffered by roofing manufacturer’s long term system warranties. Owners are encouraged to think that a warranty is an insurance policy with which they can ensure that any and all leaks will be repaired in a timely manner with little disruption to the operation of their facility. The Merriam-Webster dictionary even defines warranty as “a written guarantee of the integrity of a product and of the maker’s responsibility for the repair or replacement of defective parts.”  Simply put, an owner wants a roof that does not leak, and the warranty is supposed to ensure that the owner gets what they paid for.

In most cases, however, long term manufacturer warranties excuse the roofing contractor from responsibility after only two years and severely limit the manufacturers’ liability and the owner’s recourse. As such, many warranties are littered with exclusionary and exculpatory language that has the end effect of greatly reducing the value of the warranty.

WARRANTY FORMS

Today, commercial roofing warranties typically come in one of three different forms:

  • Manufacturer’s material warranty (material defects covered, labor defects excluded),
  • Manufacturer’s system warranty (material and labor defects covered), and
  • Contractor’s workmanship guarantee (material and labor defects covered)

Manufacturer’s material warranties typically range in length from 10 to 30 years. As the name implies, these warranties are issued by the manufacturer and cover only defects or failure of the roofing materials due to manufacturing defects or premature aging.  The major problem with these warranties is that they are extremely narrow in scope, covering only the materials themselves. Given that most leaks occur at roof-to-wall intersections, flashings and other roof penetrations, this warranty will have no usefulness unless it can be determined that the leak was caused by a defect in the manufacture of the roofing material and not the application thereof.  The cure for these warranties is almost always limited to the prorated value of the material only, and offers no compensation for the labor necessary to repair the defective materials.  Beware of unscrupulous contractors that submit this warranty term as a manufacturer’s guarantee of system longevity; at the end of what is sure to be a short contractor workmanship guarantee, there will be no further owner recourse for repair of a leaky roof.

Manufacturer’s system warranties are also issued by the manufacturer of the roofing materials, but these warranties are broader in scope to cover certain instances of defective workmanship. Typical terms of manufacturer system warranties are 10 to 30 years, but excuse the contractor from liability after only two years.  Most system warranties exclude leaks from non-manufacturer produced roof components like flashings, pitch pans, coping metal, edge metal and other roof penetrations that commonly leak.  Too often, the only thing about a warranty that is considered is the length, which is the least important part.  Building owners and their managers should be aware that roofing system warranties are written by the issuer’s attorneys, for the sole and exclusive benefit of the issuer.  Roof System Warranties, like any other legal contract, should be carefully analyzed prior to executing a roofing contract to determine what is included and what the issuer is excluding.  More often than not there are more exclusions than inclusions.

Contractor’s workmanship guarantees are issued by the contractor installing the roof. Typically contractors keep these warranties short in length, one to five years, but they cover both instances of defective workmanship as well as defective materials and are the most valuable warranty to the building owner for direct legal recourse, if necessary.  Special care should be taken to review the contractor’s workmanship guarantee for inclusions and exclusions.  Also the contractor’s General Liability insurance coverage should be reviewed.  Certificate of additional insured should be required and a clause for “completed operations” should be insisted upon to guarantee building owner protection should an impasse with the contractor ever develop.

KEY WARRANTY PROVISIONS

There are five key provisions to be aware of when evaluating the merits of a manufacturer’s material warranty, a manufacturer’s system warranty, or a contractor’s workmanship guarantee: scope of coverage, monetary limits, determination of applicability, exclusions and nullification clauses.

Scope of Coverage: Scope of coverage simply refers to whether the warranty is limited to defects in materials or whether it also includes defective workmanship. As most roof leaks can be attributed to defective workmanship, it is important to ensure that your warranty includes coverage for workmanship.

Monetary Limits: Most commercial roofing warranties do not include specific monetary limits. These are referred to as No Dollar Limit (or NDL) warranties. Some warranties, however, cap repairs at the original cost of the roof or per square foot amounts that are based on the size of the roof (Penal Sum Warranty). These monetary caps typically would not cover the cost of replacing the roof and do not increase as the cost of materials and labor increase due to inflation. NDL warranties are preferable for this reason, but beware of copious exclusions and nullification clauses included in the small print.

Determination of Applicability: Some warranties contain provisions that allow the manufacturer to reserve to itself the exclusive right to determine whether a needed repair is covered under the warranty or not. (Often when the manufacturer reserves this right, the manufacturer also will reserve the right to charge for service calls when it determines that the problem is outside the warranty’s scope.) This could lead to denial of coverage even though a repair is clearly covered under the warranty, so long as the manufacturer’s determination was made in “good faith”.

Exclusions: Exclusions serve as heavy armament for manufacturers, protecting them from liability. They can be subdivided into two sub-categories: legal exclusions and technical exclusions. Legal exclusions seek to bar claimants from recovery under other theories of law such as breach of contract, breach of express warranty or breach of implied warranties. Technical limitations on the other hand, will bar the repair of leaks resulting from certain enumerated causes (e.g., natural disasters, abuse, owner’s lack of proper roof maintenance, etc.).

Nullification: If exclusions are the manufacturers’ heavy armament, nullification is their nuclear arsenal. Nullification provisions of a warranty set out a list of events that will void the warranty in total. Here is a list of some typical events that may nullify the warranty:

  • Ponding water on the roof area in excess of manufacturer’s tolerance, even if roof warranty was signed off;
  • Repairs, alterations or additions without manufacturer’s prior written approval;
  • Failure to pay bills for materials, installation, and or manufacturer’s warranty fee;
  • Lack of inspection or final signoff at time of application;
  • Failure of installing contractor to pay warranty fees in full to manufacturer
  • Failure to notify manufacturer of building ownership transfer within a certain time period;
  • Failure to have a bi-annual roof maintenance contract with approved contractor in place, in accordance with the maintenance requirements set forth by the
    manufacturer to properly maintain the roofing system;
  • Failure to maintain an accurate log of personnel and contractors that have had access to the roof after installation.
  • Change of building use or occupancy; and
  • Failure to repair damaged roofing system within certain time limit, using an approved applicator.

PROTECTION UNDER THE CONTRACT

In many circumstances, it may not be necessary to obtain a manufacturer’s warranty at all. Instead, the warranty included as part of a contractor’s contract for services may afford the best owner protection, if worded correctly. For most owners the Contractor Warranty is the most important provision in the contract documents, providing broad and long-term protection with direct insurance and legal remedies, if ever necessary. Contract language should clearly spell out the contractor’s obligation without exclusion.  For example:

Contractor warrants that for a period of X-years from the project completion date, any roof membrane leaks occurring from defective material and/or defective installation will be repaired by Contractor at no additional cost to Customer.

This is a broad-based contractual warranty provision that covers both defective materials and defective workmanship without exclusionary language that limits the scope of coverage or applicability of the warranty as discussed above. More important, the term of the warranty is incorporated into the written contractual agreement between the owner and the contractor, thus (depending on the number of years specified in the warranty) subjecting the contractor to product liability far beyond the standard 2 year statute that would be available without such language.  Contracted guarantees allow an owner to enforce the warranty provision of the roofing contract for at least the number of years specified as warranted in the contract and provide the added benefit of owner’s recourse to the contractor’s general liability insurer for the same term.  Contract guarantee language provides an owner a powerful broad-based system warranty with insurance and legal recourse, all without limitation, additional cost, or added owner responsibility.

SUMMARY

The terms of a roofing warranty should be closely evaluated to ensure that the value discussed is the value received. Be leery of contractors that speak in vague terms about warranties.  Don’t settle for substandard material-only warranties; always seek a “no dollar limit” manufacturer’s warranties to protect against a continuously depreciating warranty. Become familiar with the limitations of a warranty to ensure that you are not walking down a path that leads to the nullification of the warranty.  Ask the threshold question of whether you need a manufacturer’s warranty. Your Contractor Warranty will likely provide better protection and recourse than a manufacturer’s warranty, especially if your contractor has the proper contract language and “completed operations” endorsement to his general liability insurance coverage.  Finally, be sure to ask for and carefully review a copy of the roof warranty and general liability insurance certificate before signing a contract with any contractor.  The best defense against future disappointment is to make a decision that is as educated and informed as possible.