Is Your Roof Warranty
Worth the Paper It’s Written On?
How To Avoid Hidden Pitfalls
By: Scott W. Davis
Reprinted from November 2005 ohioconstructionlaw.com
Highlights. Warranties—especially roof
warranties—are not the iron-clad protection
many owners assume them to be. Manufacturers
build in many loopholes that can
detract from the presumed value of the warranty
and disappoint the owner who has a
leaky roof covered by a leakier warranty.
What can an owner do to get what it paid
for? This article explains what to look for in a
warranty and offers suggestions about other
sources of warranties when the roofing warranty
proves less than satisfactory.
The Common View of Warranties
Most construction owners demand and in fact, would
not think of purchasing a roof without a warranty.
This is due to the simple fact that most roofs leak.
Owners think that a warranty is a simple tool through
which they can ensure that 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 it paid for.
What we find in most cases, however, are warranties
being used as tools to limit the manufacturers’ and
contractors’ liability. As such, many warranties are
littered with exclusionary and exculpatory language
that has the end effect of greatly reducing the
warranty’s value. What can an owner do to fight
back? Owners are not helpless and can find defenses
against unfair warranties in the law, the contract, and
the terms of the warranty itself.
Types of Warranties
It used to be that the manufacturer and contractor
were one and the same. Under this system, roofing
companies would insure their material and workmanship
for a period of time, typically 10 years. With the
boom in construction, this model became commercially
impractical, and manufacturers found it
necessary to establish a network of independently
owned, approved roofing companies throughout the
country to install their roofing products. This move
impacted roofing warranties by increasing the types
and sources of the roof warranty.
Today, warranties typically come in one of three different
forms:
manufacturer’s material warranty,
manufacturer’s roof system warranty, and
roofer’s guarantee (other than the general warranty
under Section 3.5.1 of the AIA General
Conditions).
Manufacturer’s material warranties typically range
in length from 5 to 20 years. As the name implies,
these warranties are backed by the manufacturer and
cover only defects and failure of the roofing material
itself (e.g. cracks in asphalt shingles, tears in built-up
roofing plies). These warranties are only as good as
the company that stands behind them. Therefore,
owners can have more confidence that their warranty
claim will be honored if the company issuing the warranty
has vast financial resources and has
been in business for a long time, as opposed
to smaller, fly-by-night roof manufacturing
companies. 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, the usefulness of
the warranty in most leak situations will be
severely limited.
Manufacturer’s roof system warranties
are also backed 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 five
to ten years. As with the manufacturer’s
material warranties, these warranties are only
as strong as the companies that issue them.
Therefore, if the manufacturer one day decides
to close up shop (and this happens),
your warranty will be worthless.
Roofer’s guarantees are issued by the contractor
installing the roof. They are typically
very short in length, one to five years. They
also cover instances of defective workmanship as
well as defective materials, but since they are generally
issued by smaller companies, their overall value
may be suspect.
Five 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
roofer’s guarantee: scope of coverage, monetary limits,
determination of applicability, exclusions, and nullification.
Scope of Coverag:: 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. These monetary caps typically would
not cover the cost of replacing the roof and do not increase
as the cost of materials increases due to inflation.
NDL warranties are preferable for this reason.
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.” It would thus be prudent to allow a
third-party neutral to make such determinations.
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,
lack of proper 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:
Repairs, alterations or additions without
manufacturer’s prior approval;
Failure to pay bills for materials and installation;
Lack of inspection at time of application;
Failure to notify manufacturer of building ownership
transfer within a certain time period;
Failure to maintain the roof in accordance with the
manufacturer’s instructions;
Change in building use; and
Failure to repair damaged roof within certain time
limit, using an approved applicator.
Protection Under the Law
Even with all of the exclusionary language included in
most warranties, courts will step in when manufacturers
fail to honor the basic terms of their warranty. The legal
theory is that the warranty “fails of its essential purpose.”
An example can be seen in the case of Wilson v.
Kelly Energy Systems, 1992 Ohio App. LEXIS 5144.
Wilson, a decision from the Court of Appeals for Hamilton
County, involved the re-roof of an apartment building.
The manufacturer provided the building owner with a
warranty that gave protection against “cracking due to
expansion or contraction of the rubber.” The building
owner brought suit when the manufacturer refused to
make warranty repairs. When the manufacturer “was
unwilling to make the repairs necessary to effect a water-
tight condition of the roof within a reasonable time,”
the court held that the warranty failed of its essential
purpose and that the remedy limitation and exclusion
operated to deprive the owner of the “substantial value
of his bargain.” So the appellate court upheld the jury
verdict in favor of the apartment building’s owner.
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 the General Conditions
may afford all the protection that is needed. For most
owners this warranty in the General Conditions is the
most important provision in the Contract Documents,
providing broad and long-term protection. For example,
Section 3.5.1 of the American Institute of Architects
Standard Form General Conditions says this:
The Contractor warrants to the Owner and Architect
that materials and equipment furnished
under the Contract will be of good quality and
new unless otherwise required or permitted by
the Contract Documents, that the Work will be
free from defects not inherent in the quality
required or permitted, and that the Work will
conform to the requirements of the Contract
Documents. Work not conforming to these
requirements, including substitutions not
properly approved and authorized, may be
considered defective.
This is a broad-based warranty provision that applies
to both defective materials and defective workmanship.
There is no exclusionary language that limits the scope
of coverage or applicability of the warranty as discussed
above. More important, this term is incorporated into
the contract agreement between the owner and the contractor,
thus subjecting it to the statute of limitations
for written agreements, which, in Ohio, is 15 years. This
means that given defective workmanship or materials
and the contractor’s refusal to make repairs, an owner
can enforce the contract for at least 15 years after the
date of the contract. In effect, this provides as owner
with a broad-based, 15-year warranty.
Moreover, for public owners and some private owners,
the surety bond provides financial backing to the general
warranty contained in the General Conditions. Surety
bonds are financial obligations that are triggered upon
the default of the contractor. Such default would include
the failure of the contractor to make warranty
repairs. The statutory form of surety bond that is required
for public works projects in Ohio remains in place
for the life of the contract, which would include the 15-
year statute of limitations period. So, if the contractor
goes under during the 15-year statute of limitations period,
the surety bond stands in the shoes of the
contractor and would be responsible for the terms of the
general warranty provisions. The net result is a 15-year
warranty that is backed by the financial resources of the
surety bond company.
Final Thoughts
The terms of the roofing warranty should be closely
evaluated to ensure that you are receiving value. Be
leery of material-only warranties, and always seek a “no
dollar limit” on the warranty to protect against a continuously
depreciating warranty. Become familiar with
the limitations of the warranty to ensure that you are
not walking down a path that leads to the nullification
of the warranty. Finally, ask the threshold question of
whether you need a manufacturer’s warranty. Your General
Conditions warranty may provide all the protection
that you need. It goes without saying that neither the
owner nor the owner’s agent, the Architect, should
modify the terms of the General Conditions warranty
without the advice of legal counsel.
Note: Much of the information for this article came from
the following books, which you might find useful:
C.W. Griffin & Richard Fricklas, THE MANUAL OF
LOW-SLOPE ROOF SYSTEMS, 521-31 (1996).
National Roofing Contractors Association, LOWSLOPE
ROOFING MATERIALS GUIDE 2004-05,
659-65 (2004).
Robert Scharff, ROOFING HANDBOOK, 57-59
(1996).
