What is the Minnesota New Construction 1-2-10 Warranty?
According to Minnesota Statutes, when selling a new construction home, the building contractor must provide something called a 1-2-10 Warranty to the buyer.
1-2-10 refers to the fact that the warranty is broken down by one, two and ten year periods. Each time period covers a different part of the construction of the home.
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What does the 1-2-10 Warranty actually cover?
The exact language from the Minnesota Office of the Revisor is the following:
"(a) during the one-year period from and after the warranty date the dwelling shall be free from defects caused by faulty workmanship and defective materials due to noncompliance with building standards;
(b) during the two-year period from and after the warranty date, the dwelling shall be free from defects caused by faulty installation of plumbing, electrical, heating, and cooling systems due to noncompliance with building standards; and
(c) during the ten-year period from and after the warranty date, the dwelling shall be free from major construction defects due to noncompliance with building standards."
A simple way to understand it is:
One year for pretty much everything, two years for mechanical systems, and ten years for the structural parts of the building.
This warranty stays with the home, even if it is sold to another owner within the period when the warranty is still active on the home.
What is NOT covered under a 1-2-10 Warranty?
Typically, items that are not covered are components of the home that are covered under a manufacturers warranty such as household appliances.
In addition, settling and other small cracks that form in drywall or cement would not be covered.
Can the 1-2-10 Warranty be voided?
There are actions you may take that could make it more difficult for you to prove a builder is responsible for an issue that arose and have them pay to make a repair.
Some of those things could be:
Materials that were not provided by the builder (plumbing fixtures, flooring, electrical fixtures, etc.).
Installation of materials was not completed by the builder or the builder's subcontractors (installing your own flooring, drywall, etc.).
Modifications to the home such as remodeling that would change what was originally done by the builder while still in the warranty period.
Improper maintenance of the home.
How do I file a claim with my Builder?
Generally when you purchase a home, the builder will provide information regarding their warranty.
Make sure to read through that paperwork prior to making a claim to verify it is within the allowed limits.
There are specific rules as to how and when you must make a claim.
As a rule of thumb, submitting the request in writing is best.
It will allow you to keep proper documentation of your request and their reply.
What if the builder goes out of business?
It is important to note that ALL builders licensed in Minnesota have to provide this warranty.
If you purchased your home with an FHA or VA loan, the Federal Building Authority (FHA) required your builder to purchase a third-party warranty to cover your home in the event that they go out of business during your warranty period.
Even if the builder goes out of business The Contractor Recovery Fund is there to offer compensation to homeowners that need to file a claim against an out-of-business contractor.
There are also companies that offer third party warranties directly to homeowners who may want to purchase additional coverage to supplement the warranty received from their builder:
Buying a new construction home is an exciting and overwhelming time for families.
Understanding the warranties provided by your builder in the State of Minnesota should help you know your rights and how to be prepared if an issue were to arise.
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