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Residential Warranties vs Architects Certificate
The Commercial Warranty Group are often asked why I should buy a Residential Warranty instead of opting for an Architects Certificate. It is not uncommon for a developer to opt for an Architects Certificate (Professional Consultants Certificate) instead of a Residential Warranty but think carefully before making your final decision.
What is an Architects Certificate?
To put it very simply an Architects Certificate is a document signed by the Architect consultant to confirm that they have monitored the construction of the property and that they (and their Professional Indemnity Insurance) are liable to the owner and any lender for a period of 6 years should structural problems occur due to their defective design.
What are the POSITIVES of an Architects Certificate?
- An Architects Certificate is often cheaper than a structural warranty
What are the NEGATIVES of an Architects Certificate?
- Whilst cheaper the period of cover is for only for 6 years as opposed to 10-12 years
- It is not an insurance policy that benefits the home owner
- The limit of indemnity may be substantially less than a Warranty policy
- The home owner would have to prove negligence in order to succeed
- Legal fees will be incurred – it could be a very expensive and lengthy process
- No cover is provided for the insolvency of the builder
- It may be unacceptable to lenders funding the build
- You may not be able to sell your property within the first 10 years of completion unless a retrospective warranty policy is subsequently purchased
So; a Residential Warranty is the better but more expensive option. How can I save money?
Purchase at the earliest stage possible. Before work commences allowing time for inspectors to carry out audits of the drawings etc. The more involvement the Commercial Warranty Group, the Insurer and their appointed Technical Auditing team have at the earliest opportunity the more cost effective it will be for you.
The longer you leave it the more expensive it will be. A Retrospective Warranty premium can increase by as much as 25% if you are at the stage of pouring concrete to 100% if the structure is complete. And not all insurers can provide retrospective warranty cover.
The Commercial Warranty Group however can assist you with market comparisons for both Residential Warranties and Retrospective cover. All with ‘A’ Rated Insurers (please click the link to learn about the importance of an a rated insurer) and are lender approved / transferrable to potential new owners within the period of cover.
And finally what if I decide to develop with no Architects Certificate or Residential Warranty?
Then the risks, costs involved etc if Latent Defects occur could be considerably more expensive, time consuming and disruptive than had you purchased a policy.
And then lets not forget the increased cost of retrospective cover if you decide to sell the property within 10 years of completion or need to raise funds against the property.
For all of your Warranty needs please complete the Enquiry Form above or contact us during normal business hours on 02476 437638.
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